Illegally acquired property of foreign citizens will be subject to confiscation in Russia

The Government Commission on drafting laws approved the draft law, which allows Russian courts if requested by foreign courts to confiscate illegally acquired property. A representative of the Ministry of Economic Development told RBC about the support to the draft law. The Ministry of Justice prepared the draft law “On amendments to the Penal Procedural Code and Article 104 of the Execution Procedure Law” (RBC has copies of the draft law and of the explanatory note). The authors are hopeful: “[Its] implementation will improve the efficiency of international cooperation of fighting organized crime”.

How this will operate.

A new Chapter 55.1 «Procedure of consideration and resolution of the matters concerning acknowledgement and enforcement of sentences, judgments of a foreign court in the part of confiscation of proceeds from crime» may appear in the PPC. The Chapter will govern the procedure of execution of sentences and judgments passed by foreign courts on confiscation of proceeds from crime acquired abroad and transferred to Russia. According to the explanatory note, the draft of the Chapter was prepared for the purpose of realization of international agreements ratified by Russia, including the Convention on Laundering, Search, Seizure and Confiscation of the Proceeds from Crime dated November 8 of 1990. There are currently no norms on confiscation of property upon a judgment passed by a foreign court in Russia.​

Anton Gusev, senior associate of the dispute settlement practice of Goltsblat BLP surmises that it is unlikely that much property received from crimes committed in foreign countries is located in Russia, unlike the opposite – the Russians’ property abroad. He believes: “One may suppose that much more property obtained from crimes in Russia is located in foreign states. [Therefore,] special attention must be given to the reciprocity principle in the passing of judgments to confiscate property upon judgments of foreign courts”. Rustam Vakhitov, Partner of International Tax Associates BV, agrees that the foreign assets of Russians may be subject to confiscation under the reciprocity principle. Alexander Bolomatov, Partner of the Law Firm "YUST", says this will enable similar procedures in other countries and give access to the foreign property of Russian prison inmates.

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