Animated discussions are continuing across Europe about how to best use frozen Russian central bank assets to help Ukraine in a way that minimizes legal risks for the countries where they are held, primarily Belgium. However, this $280–300 billion in sovereign reserves is just part of the money frozen due to Western sanctions imposed in response to Russia’s full-scale invasion of Ukraine.
Besides state assets, private assets have also been frozen, including planes, yachts, and villas belonging to individual Russians who are on sanctions lists. They are collectively worth around $58 billion. But another $70 billion, according to estimates by the Boris Nemtsov Foundation for Freedom, belongs to Russian legal entities and individuals against whom Western financial authorities have no formal claims. They are not subject to sanctions or other restrictions, but have nevertheless lost access to their investments because they were made through third-party organizations that have since been blacklisted by the West.
Russia deliberately cultivated its private investors. The state opened individual investment accounts and encouraged their use through tax incentives. Russian brokers actively advised their clients to diversify their portfolios as a safety measure by investing in foreign stocks such as Apple, Tesla, Intel, Meta, and Alibaba, and other securities such as Eurobonds.
Russia’s invasion of Ukraine in February of 2022 brought these experiments to an abrupt end. The waves of Western sanctions that followed shook the entire Russian stock market.
The first wave hit brokers at Russia’s largest banks (Sberbank, VTB, and Alfa Bank). The second hit Russia’s main securities custodian, the National Settlement Depository. In 2023, sanctions were imposed on the St. Petersburg Stock Exchange (SPB Exchange), the main platform for trading foreign shares in Russia, and in 2024, on the SPB Bank depository.
As a result, the stocks and bonds of foreign issuers (not just American and European ones, but Chinese and others too) were automatically blocked in European depositories: Euroclear and Clearstream. These institutions do not see the ultimate beneficiaries, since their clients cannot be private individuals. They see only that the securities are on the balance sheets of Russian organizations that have been sanctioned, which means they are subject to freezing.
The volume of frozen private assets (around $14 billion) might seem insignificant compared with Russia’s massive sovereign reserves and sanctioned individuals’ property. However, it represents the savings of millions of Russians who believed that foreign securities were a safe investment and in the institution of private property.
In 2022, the Russian central bank said that the asset freeze had impacted more than 5 million private investors. A frozen asset exchange program launched last year has allowed 1.5 million investors to recover some of their assets, according to regulatory data.
This mutual unblocking program allows Russian investors to exchange assets, including foreign shares, depositary receipts, and investment fund units blocked in the National Settlement Depository—but only worth up to 100,000 rubles, or just over $1,000. Foreigners, in turn, are allowed to pay for them using funds from special accounts and withdraw them from Russia. Still, despite this partial restoration of access to assets, around 3.5 million investors remain out in the cold.
Research conducted by the central bank back in 2021—before the war—sheds light on who exactly these investors are. Its results confirm the popularity of foreign securities among Russian brokers’ clients: 40 percent of the assets of male retail investors and 36 percent of the assets of female investors were made up of foreign stocks and bonds.
It also gives us a sense of the size of their portfolios: of all clients with portfolios of more than 10,000 rubles, the overwhelming majority (80 percent) had accounts worth less than 1 million rubles, of whom 37.5 percent had less than 100,000 rubles (or less than $1,200). Another 15 percent were investors with accounts ranging from 1 to 6 million rubles. Less than 5 percent owned large portfolios of over 6 million rubles (about $75,000).
The Nemtsov Foundation cites anonymized data from a major Russian brokerage which includes more than 230,000 clients whose assets were frozen due to sanctions. Collectively, their frozen assets are worth 80.9 billion rubles (or just under $1 billion). Other figures corroborate the central bank’s prewar conclusions: the overwhelming majority of impacted investors (81.6 percent) lost access to relatively small sums—up to 100,000 rubles ($1,200). Just 1 percent of clients owned assets worth more than 3 million rubles (around $40,000).
The Nemtsov Foundation also conducted an online survey among private investors with frozen securities. Judging by the results, they are largely economically engaged middle-class people with a higher education. They invested in Western tools to protect their savings from inflation, save money for retirement, generate additional income, save up for their education, achieve financial independence, and the like. Notably, one in three respondents had left Russia after the full-scale invasion of Ukraine.
Lastly, sanctions on the Russian stock market impacted millions of retail investors, many of whom were not even Russian citizens. Russia’s financial infrastructure was used for investment purposes by citizens of Ukraine, Kazakhstan, and other former Soviet countries.
A formal process for unblocking private assets has existed from the very beginning, but it is long, arduous, and expensive. Interested investors must obtain a special license from the Belgian and Luxembourgian finance ministries, and also a guarantee from the EU confirming that the investor is not subject to sanctions and that they purchased their assets using their own money.
For many Russian investors, the cost of hiring a European lawyer—up to 100,000 euros—exceeds their total frozen capital many times over. Furthermore, successful recovery is far from certain. Accordingly, just over fifty individual unblocking licenses have been issued over the past three and a half years, according to Nemtsov Foundation data.
Current discussions around using frozen Russian assets to help Ukraine concern only those belonging to the central bank. There is no talk of using private investors’ assets in a similar fashion. However, nor is there talk of doing anything else with them, including returning them to their owners. For Russian private investors frozen out of the West, there is no sign of a thaw coming anytime soon.
