Moscow sets out new controls on foreigners trading Russian assets

International banking giant Citigroup’s client memo shows strict rules Russia has set out for foreigners seeking to buy and sell Russian securities and real estate.

Russia has set out strict rules for foreigners seeking permits to buy and sell Russian securities and real estate, according to a client memo by international banking giant Citigroup cited by the Reuters news agency.

Russia temporarily stopped foreigners from dumping Russian assets this month, saying it wanted to ensure decisions were considered and not driven by political pressure, as sanctions have intensified after Moscow’s full-scale invasion of Ukraine.

Funds with tens of billions of dollars in exposure to Russia have been awaiting details on new restrictions they will face as they seek to offload assets.

The invasion, which Moscow calls a “special military operation”, triggered an exodus of international firms and has largely cut off Russia’s economy from the rest of the world.

The Russian authorities published Decree 81 this month which stipulates that any transaction between Russians and foreign counterparties requires permission from Russia’s Government Commission for Control of Foreign Investment.

Effectively this meant foreign investors, who had acquired Russian stocks and bonds without restrictions, were left stuck with those holdings while the economy lurches from an enticing oil-rich investment destination to a financial pariah.

Russia has now laid out details of the application process for foreigners seeking to trade assets and which will restrict trading to those granted permits, according to the Citigroup memo.

The process requires foreign investors wanting to buy and sell Russian assets to provide detailed information upfront in order to obtain a permit to trade.

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