Temporary management of assets of “unfriendly” persons

From 25 April 2023, Decree No. 302 of the President of the Russian Federation provides for the possibility of establishing temporary asset management. Temporary management may be imposed by the President in relation to a person associated with a foreign state that has frozen or restricted the rights to the property of the Russian Federation or Russian legal entities / individuals located on its territory or threatens to commit similar actions.

Temporary management applies to:

• movable and immovable property located in the territory of the Russian Federation,
• securities, shares in the authorized capital of Russian legal entities,
• property rights.

The temporary manager (appointed by the Federal Agency for State Property Management, unless another person is appointed by the President) exercises the powers of the owner, conducts an inventory taking and ensures the safety of the property. The costs related to the temporary management of property are covered by the income from its use.

It is important to note that the original owner does not lose ownership of the assets, but is deprived of the right to make management decisions. The temporary manager exercises powers of possession and use (e.g., lease, encumbrance with pledge, etc.), but not disposal of property.

As of 26 April 2023, the list of assets under temporary management includes shares of two major Russian energy supply companies –PJSC Unipro and PJSC Fortum. On 26 April 2023, Vyacheslav Kozhevnikov at PJSC Fortum and Vasily Nikonov in PJSC Unipro were registered in the United State Register of Legal Entities as interim CEOs. Prior to their appointment, they worked in the group of NK Rosneft PJSC.