The Institute of Legislative Ideas in an article for Ekonomichna Pravda highlighted the challenges and possible solutions to confiscation of assets of Russian oligarchs

Ukraine is taking important steps to combat the assets of sanctioned persons associated with Russia's armed aggression by improving the mechanisms for confiscating their property. The Law of Ukraine on Enhancing the Effectiveness of Sanctions, adopted in 2022, creates legal opportunities for the recovery of assets of Russian oligarchs who support the war. However, due to the complex ownership schemes they use to hide their assets, this process is becoming extremely difficult. Moreover, there is a risk that sanctions will affect bona fide investors who may find themselves ‘hostage’ to restrictive measures.

Experts of the Institute of Legislative Ideas (ILI) believe that the case of the assets of Russian oligarch Eduard Khudainatov has shown the real challenges of this problem. In this case, the Appeals Chamber of the High Anti-Corruption Court (HACC) decided to confiscate only a part of the assets belonging to the oligarch, leaving corporate rights, in particular, to SHELL Corporation, which owns 51% of petrol stations.

At the moment, the issue of confiscation remains unresolved and requires further resolution. The ILI experts emphasise that this case has revealed the need to protect the rights of bona fide owners. In response, a new draft law is being developed that will give businesses the opportunity to buy out the shares of sanctioned persons while maintaining control over the assets without the involvement of the state. This approach will protect the interests of investors and avoid negative consequences for the development of enterprises.

The proposed draft law will help to balance the interests of the state, which seeks to effectively confiscate the aggressor's assets, and the interests of bona fide investors whose businesses risk suffering losses due to restrictive measures. Experts hope that the new legislation will help to preserve the investment climate and contribute to maintaining economic stability even under sanctions pressure.

Read more in the full article by the link.