russia allegedly found a scheme to unlock assets frozen in Europe

Russian investors, who have faced the problem of blocked assets in Europe due to sanctions, have allegedly developed a new strategy to regain access to their funds. And this innovative scheme apparently allows them to sell their assets to European brokers without the need to open an account, which greatly simplifies the process and circumvents many of the restrictions associated with sanctions.

The method is being discussed among russian investors and financiers, the main feature of which is that it does not require them to have a European passport, residence permit or even a bank account in Europe. This opens up opportunities for a much wider range of investors who previously could not use traditional methods of unlocking their assets.

A key element of the new asset unblocking scheme is the interaction with brokers that have a special status of a controlled foreign company (CFC). This status means that the brokerage company is partially owned by russian tax residents, which creates a unique legal situation that allows for the circumvention of certain sanctions restrictions.

The use of brokers with CFC status opens up new opportunities for russian investors. Such brokers can redeem blocked assets and even cash from russian owners by entering into special agreements with them. This scheme works because brokers with CFC status are in a kind of "gray zone" between russian and European jurisdictions, which allows them to act more flexibly under the sanctions regime.

The process of implementing the scheme includes two key stages. First, the investor enters into an agreement with a broker that has the status of a CFC. This is followed by a critical step - obtaining a license from the Belgian Treasury. This license is an official permit to conduct a transaction and a key element in the legalization of the entire process.

It is important to note that the investor does not need to apply to the russian government commission for control over foreign investments, which further simplifies and speeds up the procedure.

After obtaining the necessary license from the Belgian Treasury, the process of transferring assets enters an active phase. The broker independently initiates the procedure for transferring securities from the National Settlement Depository (NSD) to the European depository Euroclear. This is a key stage that effectively removes assets from russian jurisdiction and sanctions restrictions. The broker sends a payment order to Euroclear along with the license obtained, which allows the transfer of blocked funds or securities.

However, the process may be complicated by an additional requirement. Due to the fact that the Moscow Exchange group, which includes NSD, has been subject to US sanctions, Euroclear may require an additional license from the US Office of Foreign Assets Control (OFAC). This adds another layer of complexity and potentially increases the time required to complete the asset unblocking process. 

However, even with this additional step, the new scheme remains more accessible and efficient for many russian investors than traditional methods. In particular, services for unfreezing NSD's sanctioned assets and withdrawing them from EuroClear are offered online (e.g., the Razmorozka service).

This new scheme to unblock the assets of russian investors in Europe demonstrates how russians are taking advantage of the nuances of the legal systems of European countries to find loopholes to evade sanctions in the heart of the EU.

By using brokers with CFC status and bypassing the need for European citizenship or accounts, investors from the terrorist country have found a way to regain access to their funds that should be blocked and work for Ukraine.

Source: UNIAN