Asset recovery, dividend collection, securities transfer, counter-sanctions
MAGENTA Legal advises private foreign and Russian investors and foreign companies on regaining control of their assets, recovering accrued dividends and converting depositary receipts — using existing legal mechanisms and building new ones where no practice yet exists.
Why you can't deal with your assets
In 2022, the European Union, the United Kingdom, the United States and other countries imposed sanctions on Russia (the so-called “Western” sanctions, which are not recognised as legally valid in Russia), and Russia imposed sanctions on those countries (the so-called “counter-sanctions”).
The countries that imposed sanctions on Russia are designated in Russia as “unfriendly” (check the status of your country), and separate restrictions apply to their citizens and companies, including on dealing with assets. For more on Western sanctions and Russian counter-sanctions, see the separate overview below.
Meanwhile, many investors have been hit by the freezing of securities issued by Russian issuers or their group companies: Western sanctions have been imposed on the NSD (the Russian central securities depository and clearing centre), and foreign brokers refuse to carry out any operations with Russian securities (Euroclear / Clearstream blocks).
Before February 2022
After February 2022
EU blocking sanctions against the NSD have been in place since June 2022, followed by US and UK sanctions. As a result, securities and the income accrued on them remain frozen in the Western custody infrastructure, and Russia cannot influence this. Holders of depositary receipts and shares held with foreign brokers find that no actions with such securities are available, and in some cases such securities have been moved to separate “sanctions” accounts.
Check whether your country is “unfriendly”
Enter the name of your country — we will show its status under the official list.
Service lines
The right route back depends on where your securities are held and exactly what is frozen — the assets themselves, the income on them, or the ability to convert them.
Dividend recovery
Even where securities have been frozen, converted, or are now held with a foreign broker, the right to declared but unpaid dividends is often preserved. We review the issuer's corporate history, identify the applicable claim procedure and prepare the document set for the specific issue.
Our practice covers LUKOIL, Rosneft, Tatneft, Nornickel, ALROSA, Sberbank, Rostelecom, Gazprom and other issuers. The limitation period for most issues is three years from the date of the dividend resolution; for many companies it started running in 2022, so the window for claims is already narrowing.
Recovery of dividends, coupons and other payments accrued during the years of the freeze.
Recovering shares through the courts
Shares in Russian companies remain in an account with a foreign broker, and transferring them to an account with a Russian financial institution proves impossible: the broker refuses or does not respond, citing sanctions.
Russian courts have developed a new line of practice: a foreign broker's refusal to execute its client's transfer instruction, caused by sanctions restrictions, is held to be unlawful and contrary to Russian public policy. We bring a claim in a Russian commercial (arbitrazh) court under Article 248.1 of the Russian Commercial Procedure Code.
The shares are transferred to an account within the Russian infrastructure — control and the ability to deal with them are restored.
Court-ordered conversion of depositary receipts
Standard and forced conversion under most programmes has already closed, leaving receipts unconverted — either returned to the account with a foreign broker or frozen with the depositary bank. This is not the end of the road: conversion can still be achieved through a Russian commercial (arbitrazh) court, but success depends on whether the investor submitted a document package within the conversion window.
The investor receives Russian shares in place of the unconverted receipts and regains control over them.
Sanctions regulator licence
Where securities are held through a chain running from NSD into Euroclear or Clearstream, the only way to regain the ability to deal with them is to obtain a regulator's licence (the Belgian Treasury, OFAC, OFSI or others, depending on the custody chain) authorising the transfer of the securities and accrued income to a European financial institution.
We handle this work on an individual basis, for holders with frozen assets of €1m or more: whether an application is viable, the likely set of required approvals, and the strategy for appealing a possible refusal are assessed separately for each case.
Regulatory clearance to transfer the securities and accrued income to an account with a European institution.
Forced conversion
The main wave of forced depositary-receipt conversion has closed, but for a few issuers the procedure remains open and allows investors to obtain unfrozen assets in Russia — in particular Rusagro and Etalon Group. EVRAZ and Ozon investors recently completed receiving their shares, which shows how quickly these windows close, with no possibility of extension.
If you want to secure your assets under a procedure that is still open, it is important not to delay gathering and legalising your documents. Talk to us about the document set and timing for your programme.
Depositary receipts are converted into Russian shares under the issuer's open procedure.
Sanctions and counter-sanctions: what was introduced and when
After 22 February 2022, Western countries and Russia successively introduced their own restrictive regimes. Below is a brief overview of the main measures; it is for reference only and does not replace individual legal advice.
European Union
- Regulation (EU) No 269/2014 (as amended 2022–2026) — individual blocking sanctions: freezing of assets of listed persons and entities (including the NSD) and a prohibition on making funds available to them
- Regulation (EU) No 833/2014 — sectoral sanctions: restrictions in the financial and energy sectors (oil, gas, refining), export controls, and a ban on transactions in certain Russian securities
- Disconnection of a number of Russian banks from SWIFT, bans on exports of certain goods and technologies, and a price cap on Russian oil
United States
- Executive Order 14024 — blocking sanctions and designation of persons on the OFAC SDN (Specially Designated Nationals) list, with a full freeze of their assets within US jurisdiction
- Sectoral sanctions (SSI directives) on the financial, energy and defence sectors
- Export controls of the Bureau of Industry and Security (BIS), designation of companies on the Entity List, and secondary sanctions for facilitating circumvention of the regime
United Kingdom
- The Russia (Sanctions) (EU Exit) Regulations 2019 (as amended 2022–2026) — OFSI financial sanctions: asset freezes and a ban on dealings with designated persons and entities
- Trade sanctions: bans on the export and import of a broad range of goods and services
- Restrictions in the financial sector, including settlement and clearing infrastructure
Russia’s counter-measures
- Presidential Decree No. 79 of 28.02.2022 — temporary procedure for foreign-currency transactions
- Presidential Decree No. 81 of 01.03.2022 — permit regime (via the Government Commission) for transactions involving a transfer of rights to securities and real estate with persons from unfriendly states
- Presidential Decree No. 95 of 05.03.2022 — temporary procedure for performing obligations to foreign creditors from unfriendly jurisdictions, including payments through special Type “C” accounts
- Presidential Decree No. 254 of 04.05.2022 — temporary procedure for performing financial obligations in corporate relations to foreign creditors
- Government Order No. 430-r of 05.03.2022 — list of “unfriendly” states and territories
- Restrictions on issuing and repaying loans in favour of persons from unfriendly states, on transactions with participation interests and shares in Russian companies, and on operations with depositary receipts of Russian issuers abroad
Extraordinary measures to protect investors
Alongside the restrictions, Russia introduced a number of special mechanisms aimed at protecting the rights of foreign investors affected by the blocks:
Forced, voluntary and application-based conversion of depositary receipts — the legal basis for the procedures is formed by Federal Laws No. 114-FZ, No. 319-FZ, No. 452-FZ and No. 470-FZ: holders of receipts obtain the right to exchange blocked ADRs/GDRs of Russian issuers for live shares held in Russian infrastructure.
Transfer of blocked shares into Russian infrastructure — a mechanism that allows rights to shares stuck on accounts with foreign brokers to be restored through the courts or under a special procedure.
Exchange of blocked assets — a special mechanism (launched under Presidential Decree of 08.11.2023 No. 844) under which Russian investors holding blocked foreign securities could exchange them for non-residents’ rouble funds, and vice versa.
Check the status of the double tax treaty (DTT)
Enter the name of your country — we will show the status of the DTT with Russia and whether it currently applies in practice.
Data is as of 1 April 2026 and is for reference only; it is not legal advice. Whether a DTT applies depends on tax residency, ownership structure, applicable counter-sanctions restrictions and current clarifications of the Russian Federal Tax Service.
MAGENTA Legal calculators
Court fee calculator
Calculate the state fee for filing a claim with a Russian commercial (arbitrazh) court based on the amount of the claim — under the current version of Art. 333.21 of the Tax Code of the Russian Federation.
Open the calculator →Dividend checker
Check whether you can receive dividends on blocked securities through the application-based procedure in Russia — six programmes in one tool.
Open the checker →Frequently asked questions
1. How do I know whether a jurisdiction is "friendly" or "unfriendly"?
Under Russian counter-sanctions law, unfriendly jurisdictions include, among others, the EU member states, the United States and the United Kingdom. Friendly jurisdictions include, for example, India, China (including Hong Kong), Argentina and Uruguay. See the full list of countries and the grounds for their inclusion on our website — list of unfriendly countries.
2. Where are recovered dividends paid if I am in an "unfriendly" jurisdiction?
As a rule, payments to holders from "unfriendly" jurisdictions are credited to a special Type C account opened with a Russian bank. Funds in that account are subject to statutory restrictions on use — for example, paying Russian taxes and purchasing certain government bonds.
3. My receipts have already been returned to my account with a foreign broker — is there still anything to be done?
Yes. If you could not take part in standard or forced conversion, converting receipts into Russian shares can still be achieved through a Russian commercial court under Article 248.1 — established case law favours the investor, including holders from "unfriendly" countries.
4. What volume of frozen assets do you work with?
For dividend recovery and the litigation service lines (share recovery, DR conversion), the threshold for taking on a matter is determined individually and discussed at the initial consultation. For the sanctions regulator licence service, we work with holders of €1m or more in frozen assets, on an individual basis.
5. How many licences do I need to unfreeze securities in Euroclear?
In most cases, a licence from the regulator of the country where Euroclear is incorporated (the Belgian Treasury) is enough. An OFAC licence is not always required — if the transfer does not directly involve US persons, it can often be avoided. An OFSI (UK) licence is needed less often, only where there is a UK element in the custody chain.
6. Is there a limitation period for dividend recovery?
The general limitation period is three years from the date of the general meeting at which the dividend was resolved. For many companies, including LUKOIL, Rosneft and Tatneft, that period started running in 2022 — so it is worth assessing your prospects without delay.
7. Can a law firm guarantee the outcome?
No — for a licence, a court case, or a dividend claim, the outcome can never be guaranteed: the decision rests with the regulator, the court, or the issuer. Our job is the legal position, the completeness of the documents, and the consistent conduct of the matter, including appealing refusals where appropriate.
8. What is a Type “C” account?
A Type “C” account is a special account for foreign persons from “unfriendly” states that is opened in Russia: a cash account with a Russian bank or a securities (depo) account with a Russian depositary or broker. Rouble payments (dividends, coupons, redemption proceeds) are credited to it, and it records securities that the foreign investor cannot freely dispose of. The regime was established by the counter-sanctions Presidential Decrees No. 95 of 05.03.2022 and No. 254 of 04.05.2022 (as amended) and by acts of the Bank of Russia.
What is usually permitted: receiving and accumulating payments on securities, transferring funds between your own Type “C” accounts, and spending them on payments within Russia (including taxes and mandatory payments). What is restricted: transferring funds abroad, buying and selling securities, and transferring securities to a foreign depositary — as a rule, only with the permission of the Government Commission for Control over Foreign Investment.
Such accounts exist only in Russia: they are opened by Russian banks, depositaries and brokers, and a foreign broker or bank cannot open a Type “C” account.
Practice team
The practice brings together expertise in securities, international law, sanctions regulation and litigation.
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