Foreign investors cannot withdraw billions from Russia

In Russia, there are billions of dollars in the accounts of foreign investors, which companies cannot take out of the country due to sanctions, according to Bloomberg.

In particular, we are talking about dividends on shares and interest on bonds, which foreign companies did not have time to sell before the beginning of the Russian invasion of Ukraine. Money is kept in special ruble bank accounts for non-residents, known as type “C”. It is impossible to withdraw funds from these accounts, you can only direct them to a limited range of purposes, for example, paying taxes.

Earlier, the head of the Central Bank of Russia, Elvyra Nabiullina, refused to reveal how much money is stored in type “C” accounts, however, she noted that the amount of funds continues to grow. In November last year, “Interfax” reported that the total amount of funds in these accounts exceeded 280 billion rubles.

As noted by Bloomberg, the money legally belongs to several large companies, such as JPMorgan Asset Management and Schroders Plc, however, most representatives of the companies admit that there is no hope of returning the funds.

“The market still exists, but when someone talks about the repatriation of dividends or access to underlying securities, it all boils down to the issue of sanctions,” said Tim Love, director of investments at GAM Investment Management.

The asset management company East Capital said that as of February, the organization had 13 million euros in special accounts. JPMorgan Asset Management Emerging EMEA informed clients that about 7.6 million dollars were frozen in “C” accounts as of January 4.

According to the Moscow Stock Exchange and the Central Bank, before the start of the war in Ukraine, the total volume of foreign investments in Russia amounted to about 150 billion, invested in shares and government bonds.

Special ruble accounts of the “C” type were introduced by presidential decree in March 2022 in response to sanctions against Russia imposed after its invasion of Ukraine. Income from securities belonging to non-residents from “unfriendly countries” is blocked on these accounts. It is possible to convert them into currency only with the permission of the Russian authorities.