Russian MPs back bill to compensate Ukraine sanction targets

8th October 2014, Comments 0 comments

Russian lawmakers on Wednesday gave their preliminary backing to a controversial bill that could see the state compensate those hit by Western sanctions over Ukraine.

Parliament passed the proposed legislation on a first reading by 233 votes to 202 despite criticism from Russia's economy minister that it could accelerate already high levels of capital flight.

The bill -- which was rejected by Russia's usually tame parliamentary opposition -- must undergo two more readings before President Vladimir Putin could sign it into law.

The legislation would allow compensation from the state budget for an individual whose assets were seized by foreign courts and give judges in Russia the right to order the property of foreign states confiscated.

The US and EU have slapped the toughest sanctions on Moscow since the end of the Cold War for its role in the Ukraine crisis, including targeting a range of high-ranking officials and businessmen close to Putin.

The legislation has been dubbed the "Rotenberg bill" after Putin-allied businessman Arkady Rotenberg, who last month had property worth some $40 million (32 million euros) seized in Italy.

The proposal though has laid bare divisions within Russia's ruling elite with Economy Minister Alexei Ulyukayev urging deputies to reject the bill ahead of Wednesday's vote.

Ulyukayev warned that the legislation would "encourage" capital flight from the country by essentially providing "budgetary insurance" for assets held abroad.

Russia's economy has already been hit hard by the fallout from the Ukraine crisis, with the IMF estimating that capital flight could reach some $100 billion this year.

© 2014 AFP

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