Grounds for restricting transactions
The situation faced by many Russian holders of foreign securities since 2022 goes beyond ordinary market risk. It concerns restrictions on transactions in assets under sanctions regimes.
Two major international settlement institutions have been central to these restrictions: Belgium's Euroclear Bank and Luxembourg's Clearstream Banking S.A. Restrictions within the international custody chain, including those involving the National Settlement Depository (NSD), have affected Russian investors' portfolios.
The reasons for a particular suspension must be established from the documents. The applicable sanctions, restrictions within the custody chain and the position of the servicing institutions all matter. Ownership is not formally disputed, but the ability to dispose of assets — to sell or transfer them, or receive income from them — has been suspended. This has created a distinctive problem requiring more than financial analysis: it calls for detailed legal work at the intersection of private international law, sanctions regulation and custody arrangements.
The custody chain and the portfolio
The first step towards identifying a solution is to reconstruct the chain through which rights are recorded. It may include a Russian broker and custodian, NSD, Euroclear or Clearstream, and other foreign intermediaries. This is a framework for investigation, not a universal sequence for every instrument. It is necessary to establish the account on which transactions have been suspended, the grounds for doing so, and how the information held by the institutions in the chain fits together.
The next layer of information concerns the frozen portfolio itself. Details are critical to the legal and procedural work. We need to know precisely which companies' shares or issuers' bonds make up your portfolio, their International Securities Identification Numbers (ISINs), and the currencies in which they are denominated. An official securities account statement as at the date of the freeze is an important starting point. It is a cornerstone of subsequent discussions with counterparties or regulators because it records the assets held on the relevant date.
The holder's circumstances and previous enquiries
The holder's citizenship, place of residence and accounts are among the circumstances that need to be examined. A second citizenship or residence permit does not, by itself, lift the freeze or ensure that assets can be transferred. What matters is the particular prohibition, the conditions for an exemption and the willingness of the institutions in the custody chain to execute an authorised transaction.
The history of previous enquiries is equally important. Have you or your broker already tried to clarify the status of the assets or initiate their release? Any correspondence received — replies from a custodian, broker or other counterparty — is a significant record. It sets out the parties' official positions and the arguments already advanced, and helps avoid inconsistent steps later. Finally, a fundamental question concerns the origin of the assets: when, and on what basis, was each holding acquired? There is no single acquisition cut-off date that gives a right to the release of all securities. The relevant date depends on the particular prohibition or exemption.
Authorisation and execution
The documents collected provide the basis for examining the grounds for the freeze and any available authorisation procedure. Contacting a custodian to establish the status of assets and arrange a transaction does not replace any necessary permission from the competent public authority. The applicability, conditions and time limits of an authorisation must be assessed for the particular circumstances; a change in the holder's residence does not, on its own, determine the competent authority.
Restoring the ability to dispose of assets is a sequential process in which haste and uncoordinated action are counterproductive. It begins with a thorough review that organises the available information. The next stage is to develop and implement a course of action: direct engagement with financial institutions, preparation of substantiated requests and support throughout the procedures. If the necessary authorisation is obtained, its practical execution must be agreed separately with the institutions in the custody chain.
The outcome of the initial assessment
The documents collected make it possible to assess whether there is an applicable route to authorisation and execution. Submitting a request does not guarantee the release of assets. The initial assessment should produce a specific list of available actions, conditions and obstacles for the portfolio concerned.