Russian President Vladimir Putin signed Decree No. 422 on Thursday allowing Russia to seize US assets to compensate for damages resulting from Russian assets seized in the US. This decree comes as a response to the US enactment of the Rebuilding Economic Prosperity and Opportunity for Ukrainians Act which came into force on April 24, 2024, and vests the US president with the power to “seize, confiscate, transfer [] or vest” any Russian state sovereign asset in the US.

According to the decree, the Russian government or central bank can ask a Russian court to determine whether they can seek compensation on the basis that their assets were unjustifiably seized in the US. The Russian court can then order compensation to be transferred in the form of US assets or property in Russia.

The decree identified US securities, stakes in Russian companies, real estate, moveable property and property rights as being potentially liable for seizure. It also noted that individuals’ assets controlled by the US could be seized, although it did not specify how US control would be evaluated. Notably, assets of foreign investors, including both US individuals and major investment funds are currently being held in special “type-C” accounts which Russia introduced in February 2022 after being subjected to numerous Western sanctions for their invasion of Ukraine.

Deputy Chairman of Russia’s Security Council Dmitry Medvedev said on his official Telegram channel last month that Russia held an insignificant amount of US state property and that Russia may respond to the US seizing frozen Russian reserves by foreclosing private property, such as real estate and movable property, in Russia.

Notably, this decree also comes as G7 finance chiefs meet in Stresa, Italy on Friday and Saturday to negotiate how to exploit the $300 billion worth of frozen Russian assets after Russia invaded Ukraine in February 2022, with the US pushing to bring forward future income from those assets to boost funding for Ukraine’s war effort.