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Russia has assigned PSB, a military-linked bank under Western sanctions, to manage accelerated state property sales. A new decree mandates asset valuations within 10 days of signing a contract and speeds up property rights registration. The government aims to raise 100 billion INR this year and up to USD 12 billion by 2030, including part of the USD 50 billion in seized assets. These measures follow Western company exits, expropriations, and state seizures, with officials citing "unfriendly" actions by the U.S. and its allies as the reason.
Russian President Vladimir Putin has entrusted PSB, a bank linked to the military-industrial sector and under Western sanctions, with acting as the government's agent for state property sales. New measures have introduced an accelerated process, requiring every asset to be valued within 10 days of signing a valuation contract. In addition, property rights registration has been streamlined to allow faster transfer of ownership. Advertisement
These changes come alongside the release of Russia's draft budget for 2026, which will mark the fifth year of military action in Ukraine. The proposed budget includes a 2-percentage-point increase in value-added tax (VAT) to help fund government spending. Officials have set ambitious revenue targets from privatisations, aiming to raise 100 billion INR in the current year and up to one trillion roubles (around USD 12 billion) by 2030. These sales are expected to include portions of the approximately USD 50 billion worth of assets seized since 2022.
The changes reflect a larger trend that began after the conflict in Ukraine. Many Western companies exited the Russian market, while assets belonging to others were expropriated. Additionally, the Russian state seized several major business assets, consolidating control over significant portions of the economy. According to officials, the new measures are in response to what they described as "unfriendly" actions by the U.S. and its allies, although further details were not provided.
The use of PSB, which has close ties to the defense sector, indicates that the government wants a trusted and controlled entity to manage these transactions. The accelerated sale process is intended to ensure quicker monetisation of state-owned assets and to strengthen the government's fiscal position amidst ongoing economic pressures caused by sanctions and the conflict in Ukraine.
Source Reuters
5th Jun, 2025
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