How can Russians preserve their real estate abroad under sanctions?

The author of this text, Elena Kozina, is the managing partner of the law firm "Elko Profi." Recently, there has been increasing attention to the issue of unfriendly countries towards Russia. The actions of several states against the Russian Federation, its citizens, and enterprises are becoming more and more evident. In this context, the list of countries that fall into this category is regularly updated.

The latest information can be found in the decree of the Government of the Russian Federation dated March 5, 2022, number 430-r, which presents a list of foreign states and territories that are engaging in hostile actions against Russia and its legal and physical entities. It is important to note that this list includes not only European Union countries.

The situation with real estate

Despite the current situation, Russians and their companies continue to own real estate abroad, raising numerous questions about the future of this often very valuable property. In May 2022, when the European Commission was discussing the possibility of introducing a sixth package of sanctions against Russia, officials considered a ban on real estate transactions in European Union countries for Russian citizens and organizations (without European citizenship or long-term residence permits).

Although this package of sanctions was ultimately not adopted (Cyprus voted against it), the discussions on this topic and the significant noise surrounding it caused panic and concerns among owners of foreignreal estate regarding the fate of their assets.

Prospects of private ownership

I can confidently say that, considering the high regard European countries have for private property, it is highly unlikely that decisive measures will be taken to expropriate real estate from Russian citizens at this time.

It is clear that such actions could significantly reduce the investment attractiveness of the European economy, which would negatively impact the interests of investors from around the world.

Practical challenges for owners

However, there are still practical challenges that foreign property owners face. Russian citizens mainly encounter a variety of technical issues under the current conditions. Owners are required to maintain their properties in good condition.

Due to visa restrictions for Russians, increased visa fees, and certain entry bans for Russian tourists in a number of countries, it has become significantly more difficult for them to reach their overseas properties and fulfill their obligations to pay property taxes and utility bills.

This challenging situation requires owners to put in special efforts, creativity, and a strategic approach to solve the emerging problems.

Challenges faced by property owners in paying off debts

Property owners in need of debt repayment without the necessity of personal presence may encounter various difficulties. Under the conditions of financial sanctions, making payments directly from Russia becomes extremely challenging.

Problems faced by Russians in Latvia

Any Russian citizen who owns property in Latvia should be aware of the potential issues and opportunities related to selling or renting their property. It is important to consider all risks in advance, including those that may arise from sanctions for non-payment of taxes and utility bills.

Rules for debt collection in Europe

In most European countries, when a payer fails to meet their obligations for utility payments, energy and service providers have the right to suspend their services, as stipulated by law. However, the rules may vary depending on the country. Typically, debt collection measures begin with an automatic withdrawal of funds from the owner's bank account, if one exists. Additionally, if the debt exceeds 2000 euros, as is the case in Lithuania, there is a risk that the property will be put up for sale at auction.

Obstacles to selling real estate

As can be seen, debt for utility services often becomes just a temporary obstacle to selling an apartment.

Conclusion

In concluding the discussion on the current situation regarding the real estate of Russian citizens abroad, I want to emphasize that despite the challenges and uncertainties that have arisen, there are still opportunities for protecting and managing property.

We live in an era of global changes, and Russian citizens are facing new challenges that require not only vigilance but also flexibility in their approaches.

It is important to note that the respect of European states for property rights remains a significant indicator. Despite concerns related to sanctions, the adoption of radical measures for the confiscation of real estate seems unlikely. However, any outstanding debts for utilities or taxes can affect the future of your property, so it is crucial to respond to any debts in a timely manner.

Ways to protect your property

An equally important question is finding effective ways to solve the problems that arise. Let's consider possible steps:

• Opening a bank account in Europe:Citizens with a passport or residence permit from an EU country will find it easier to open an account. If traveling is not possible, you can open an account in a friendly country.
• Conclusion of a trust management agreement:This will allow managing real estate and making mandatory payments without leaving Russia.

Thus, despite the current situation with foreignreal estate, owners can take advantage of the available opportunities for its protection. I urge all my fellow countrymen to be proactive and use the tools at their disposal to manage their property abroad. Effectively addressing the issues that arise will not only help preserve investments but also provide confidence in the future.