Russia Threatens to Nationalize Western Companies if EU Seizes Its Assets

Kremlin chief Vladimir Putin has signed a decree enabling the rapid nationalization of foreign-owned companies in Russia. Many perceive this move as a prelude to retaliation in the event that the European Union proceeds to use frozen Russian assets to support Ukraine.

According to Bloomberg, the new decree allows the Kremlin to accelerate the sale or transfer of state and private assets under a “special procedure,” officially justified as a response to Western sanctions.

Under the document, the valuation period for targeted companies is limited to ten days, and the registration of new ownership is expedited, enabling swift expropriation of assets. The state-controlled Promsvyazbank—a financial institution that services Russia’s Defense Ministry—has been tasked with managing such transactions.

A Russian government source told Bloomberg that the measure applies to both Russian and foreign companies operating in Russia.

“Should the European Union begin seizing Russian assets, Moscow may respond with symmetrical measures,” the source said, indicating that the Kremlin is preparing a counter-strategy to the EU’s “reparations loan” mechanism for Ukraine.

From Temporary Seizures to Permanent Control

Until now, the Kremlin had largely avoided full-scale nationalization of Western assets, opting instead to place them under “temporary management”—a euphemism for forced transfers to oligarchs loyal to the regime at heavily discounted prices.

Dozens of Western firms, including Carlsberg, Danone, Fortum, and Uniper, have seen their Russian subsidiaries seized under this model since 2023. In several cases, senior managers appointed by Moscow were drawn directly from Russia’s security apparatus.

However, the new decree formally lowers legal barriers to outright expropriation, signaling that the Kremlin is prepared to escalate its economic confrontation with Europe in response to the EU’s latest sanctions initiatives.

EU Considers Using Frozen Russian Assets

The timing of the decree coincides with EU discussions on a plan to provide Ukraine with up to €140 billion in long-term loans guaranteed by frozen Russian central bank assets.

The proposal—advanced by German Chancellor Friedrich Merz and supported by Ursula von der Leyen, Kaia Kallas, and several EU finance ministers—aims to convert the immobilized reserves of the Russian Central Bank into a “reparations loan” for Ukraine.

Unlike confiscation, the plan would retain Russian ownership on paper but redirect proceeds and interest income from those assets to Kyiv until Moscow pays compensation for war damages.

According to the European Commission, the idea “does not contradict international law” because it treats the assets as collateral for future reparations, rather than as seized property.

Still, not all EU member states support the move. Hungary and Slovakia, known for past Russia-friendly statements, have expressed opposition, warning it could provoke retaliatory action from Moscow—a threat that Putin’s new decree now seems designed to make credible.

European Response: Proof That Sanctions Work

The European Commission reacted to Putin’s decree by saying that the Kremlin’s threats only confirm the effectiveness of EU sanctions.

“When Russia talks about nationalizing Western companies, it only shows that sanctions are hitting their intended target,” an EU spokesperson said.

Brussels stressed that the bloc will continue working on legally sound mechanisms to ensure Russia pays for the destruction it caused in Ukraine.

Meanwhile, European leaders are expected to discuss both the reparations loan plan and the broader sanctions framework at the upcoming European Council meeting in Copenhagen.

Analysts note that Putin’s decree is another step in the Kremlin’s long-term strategy to militarize Russia’s economy and insulate it from Western financial leverage—even at the cost of deterring future foreign investment.