Russian President Vladimir Putin has signed a decree granting foreign investors the ability to use their frozen funds in Russia to purchase blocked assets belonging to Russian individuals abroad. This move comes in response to the sanctions imposed by Western countries over Russia's actions in Ukraine, which have resulted in over 3.5 million Russians having approximately 1.5 trillion roubles ($16.3 billion) of assets frozen abroad.

The decree stipulates that citizens of "unfriendly" countries, as deemed by Russia, will be allowed to acquire frozen securities held by Russians overseas using funds from special "type-C" accounts in Russia. These accounts are presently blocked, but this new provision will enable their use for this purpose. In the first phase, Russia plans to unblock accounts worth around 100 billion roubles.

The decree explicitly states that it is a response to the actions carried out by the United States and other nations and organizations, which Russia considers "unfriendly and contradictory to international law." The move is seen as a strategic decision to counterbalance the impact of the ongoing sanctions on Russian individuals who have had their assets frozen abroad.

This decree enables a mechanism for foreign investors to convert their frozen funds in Russia into tangible assets held by Russian individuals overseas. By utilizing their funds in type-C accounts, foreign investors can now tap into the blocked assets market and potentially gain value from their frozen funds. This will not only help alleviate the financial burden on millions of Russians affected by the sanctions, but it will also provide an opportunity for foreign investors to capitalize on the blocked assets.

The implementation of this decree indicates Russia's aim to mitigate the economic consequences of sanctions while protecting its national interests. It marks a significant step towards opening up blocked assets for circulation and potentially stimulating both domestic and international investments.

In the coming months, it is anticipated that this new provision will attract various foreign investors who seek to capitalize on the opportunity to acquire Russian assets abroad. The ultimate impact of this decree on Russia's economy and the effectiveness of the Western sanctions remains to be seen. Nonetheless, it underlines Russia's continued efforts to navigate the complex international financial landscape and safeguard its interests in the face of mounting economic pressures.