Germany set to confiscate over $790 million from Russian financial conglomerate

21 Dec, 2023

Germany set to confiscate over $790 million from Russian financial conglomerate

German prosecutors have announced a groundbreaking move to confiscate over 720 million euros ($790 million) from a financial institution in Russia, a significant step in the aftermath of the country's first attempt of this nature. Amid previous actions to freeze Russian assets due to Moscow's extensive invasion of Ukraine in 2022, Germany had not previously pursued confiscation measures.

Reports suggest that the institution in question is the National Settlement Depository (NSD), a crucial payments agent within Russia's financial network, owned by the Moscow Exchange (MOEX.MM). This entity holds a pivotal role as an intermediary in connecting Russia's financial system with international markets. Despite attempts to gather comments from both the NSD and the Moscow Exchange, there has been no immediate response to queries from Reuters.

In September, the NSD had formally urged the European Union to acknowledge sanctions against it as unlawful and cover associated legal costs. German prosecutors, while not explicitly naming the NSD, declared that the action stemmed from suspected attempts to breach EU sanctions on June 3, 2022. Allegedly, unidentified officials from the institution sought to withdraw 720 million euros from their Frankfurt bank account, a transaction that was ultimately declined.

As a consequence, German prosecutors filed a motion before a Frankfurt court on July 7, seeking "independent confiscation proceedings." This move echoes the sentiment expressed by German Justice Minister Marco Buschmann, who emphasized on social media the country's commitment to preventing unchecked flow of Russian funds used to support the unlawful attack on Ukraine.

However, authorities have not disclosed their plans regarding the use of the confiscated funds or whether they might be allocated to assist Ukraine in its reconstruction efforts. This bold move underscores Germany's determination to take decisive action in response to breaches of international sanctions and address financial implications associated with the conflict in Ukraine.