Russian govt drafts bill allowing reciprocal seizure of foreign nations’ property

State Duma plenary session. © Vladimir Fedorenko
A bill has been submitted to parliament to limit the legal immunity of foreign states and impound their property on Russian territory if a court rules that the actions of these states violate the sovereignty of the Russian Federation.

According to the explanatory note attached to the government-submitted bill, which was published on the State Duma’s website on Thursday, the limitations must be imposed by a Russian Court using the principle of mutuality of jurisdiction immunity once it’s established that the Russian Federation’s jurisdiction immunity abroad has been restricted.

Under current regulations any restrictions on jurisdiction immunity of a foreign nation is possible only with consent of that nation’s government.

The note also reads that the changes to federal laws provided with the bill do not contradict various international treaties with Russia’s participation, including the pact on the Eurasian Economic Union.

READ MORE: Govt commission green lights reciprocal impounding of foreign nations’ property in Russia

The bill was prepared by the Justice Ministry in July this year, soon after several European countries, such as Belgium and France, had frozen Russian state companies’ assets. This was in connection with a June 2014 ruling by the International Court in The Hague ordering Russia to pay compensation of $39.9 billion, $1.85 billion and $8.2 billion to three companies connected with Yukos. The oil giant was dissolved in 2007 after its senior managers and key owners were jailed for tax evasion.

The Russian Foreign Ministry described these steps as blatant violation of international law and promised to contest the decisions. President Vladimir Putin said in an interview with the heads of international news agencies 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.

READ MORE: Russia will ‘protect its interests’ in European assets freeze – Putin

In addition to the bill allowing the reciprocal impounding of foreign nations’ property, in early July this year 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. The judge who announced the ruling explained that Russia can now refuse to fulfill the obligations imposed by the ECHR rulings, when such a refusal is the only way to prevent the violation of the basic law.