Putin Strikes Back: Russia Seizes Control of Foreign Energy Firms' Assets in Response to Threats from the US and EU

The official unveiling ceremony of the Russian poet Alexander Pushkin statue, November 13, 2013, Seoul
By Ministry of Culture, Sports and Tourism, Korean Culture and Information Service, www.korea.net, JEON HAN

President of Russia, Vladimir Putin, has signed a decree that takes temporary control of the Russian assets of two foreign energy companies, Uniper SE and Fortum Oyj, according to a statement from the Kremlin on Tuesday. The decree said the move was a response to "unfriendly and contrary to international law" actions by the United States and other countries that threatened to seize Russian assets abroad over the war in Ukraine.

The decree placed the shares of Uniper's Russian division and Fortum's Russian subsidiary under the external management of Rosimushchestvo, the federal government property agency. The agency said the measure did not affect the ownership rights of the foreign firms, but only suspended their decision-making power. The agency also warned that more foreign companies could face similar actions if Russia's interests abroad were harmed.

The decree came after U.S. Treasury Secretary Janet Yellen said in February that Russia should bear the costs of the damage caused by its invasion of Ukraine, and suggested that frozen Russian assets could be used for that purpose. The European Union also said in October that it was considering using seized Russian assets to help rebuild Ukraine. Russia has denied any responsibility for the war in Ukraine, which has killed more than 13,000 people since 2014.

Uniper and Fortum are both major players in the Russian energy market, with stakes in several power plants and gas projects. Uniper had already written down the value of its Russian business to one euro, anticipating difficulties in selling it to a local buyer. Fortum had also warned its shareholders of the risk of expropriation of its Russian assets.