Putin signs bill allowing reciprocal impounding of foreign nations’ property

President Vladimir Putin has signed amendments to a bill that restricts foreign states’ right not to observe certain Russian legal procedures if these states themselves introduce measures restricting Russia’s legal immunity.

The amendments would change Russian civil and arbitration codes by introducing the principle of limited legal immunity for a foreign state. They detail the procedure of initiating a lawsuit against a foreign nation and serving court warrants to its representatives. The document also prescribes the role of various Russian state agencies in court cases against foreign states.

READ MORE: Russian Constitutional Court gets priority over international courts in new bill

The amendments are a part of a law that was signed in early November and will come into force on January 1. It allows Russia to impound the property of foreign states, so long as Russian courts rule that these nations have damaged the economic or other interests of the Russian Federation. Before this act was introduced, such steps were only allowed on condition the government of the country in question agreed to them.

The new bill was drafted by the government as a reciprocal measure after several countries this year executed the rulings of international courts and impounded the assets belonging to the Russian state.

For example, in early July, the media reported that Belgium and France had frozen Russian state companies’ assets and curtailed their agencies in these countries. The move was in connection with the June 2014 ruling by the International Criminal Court in The Hague that ordered Russia to pay compensation of $39.9 billion, $1.85 billion and $8.2 billion, respectively, to three companies connected to the once-powerful oil giant Yukos, which was dissolved in 2007.

The Russian Foreign Ministry described these steps as blatant violation of international law and promised to contest these decisions. Vladimir Putin said that Russia would challenge the decision to seize its assets. The president added that the country didn’t recognize the ruling of the Hague court, as it doesn’t participate in the European Energy Charter.

In comments to the newly introduced law on reciprocal impounding of foreign states’ assets, the Justice Ministry wrote that the main idea behind it was to ensure a “jurisdiction balance” between Russia and foreign states. “The number of lawsuits against the Russian Federation is constantly growing and this happens without asking for our agreement for participation in these cases,” a government source told Kommersant daily. Therefore, recognizing rulings by foreign courts is equivalent al to conceding national sovereignty, the source added.

READ MORE: Putin gives Russian Constitution priority over international court rulings

Also in July, the Russian Constitutional Court decided that no international treaty or convention has precedence over national sovereignty, and decisions by the European Court of Human Rights (ECHR) should be upheld only when they don’t contradict basic Russian law. In mid-December, President Putin signed into law a bill allowing the Constitutional Court to overrule the decisions of international courts if such decisions contradict the principle of supremacy of the Russian Constitution.