CBR promises to “close loopholes” that allow to reduce the amount of blocked assets of “unfriendly” foreigners

MOSCOW, May 16 (Reuters) – The Russian Central Bank considers it inappropriate to allow market practices to reduce the volume of locked assets of non-residents of “unfriendly” countries and will close the “loopholes” used for this purpose, Bank of Russia Deputy Governor Filip Gabunia said.

Non-residents from Russia’s “unfriendly” countries continued to shed Russian government securities in early 2023, selling OFZ at a discount of up to 75%, Reuters sources told Reuters. Thanks to such transactions, non-residents reduced their investments in OFZ by hundreds of billions of rubles.

Non-residents were forbidden to sell OFZ on the Russian market, so they got rid of the securities abroad, and the new owners then transferred them to the Russian accounting infrastructure.

In November 2022, securities worth 1.36 trillion rubles were “located” in this way, 94.4% of which were in OFZ, the CBR reported.

The Central Bank has limited the ability to dispose of the vast majority of “localized” securities purchased after March 1, 2022 and transferred to accounts in a Russian escrow. Transactions in such securities are subject to a “semi-annual quarantine”.

Gabunia recalled that in early 2022 Russia was forced to close its current account in a very short time and limit the flow of capital.

“If this had not been done, we would be discussing something else now. So I sympathize with everyone, but unfortunately this is the reality at the moment. The barriers that were built very quickly by decrees of the President of the Russian Federation, somewhere something has not been taken into account, they are corrected and this situation will be protected,” Gabunia said, speaking at the NAUFOR conference.

“Furthermore, our position is very firm – we believe that it is wrong to allow or encourage, encourage – in any way – to allow practices that reduce the amount of assets that non-residents from hostile countries hold today by buying and manufacturing them here, and yes Next. And if we find any new loopholes that were not foreseen (by decrees), we will continue to close them,” Gabunia said.

“We do not accept these practices, they are important, especially for investors who have blocked assets, in order to improve the prospects of unblocking, exchange, etc. Therefore, we treat all works in this part as acting to the detriment of those who have suffered from due to sanctions, who got into the blocked shipments through various channels of foreign asset ownership,” he added.

The Central Bank is talking to the Ministry of Finance about a new stage of “localization” of securities settled in Western infrastructure, said the first deputy governor of the Central Bank of Russia Vladimir Chistiukhin the day before. (Elena’s Factory)


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