Blue Ribbon for Sanction Craziness: Italy Seizes Hotel of Putin Ally; Russia Threatens Law Allowing Seizure of Foreign Assets

What's Russia to do? Stand back and let the US and Europe escalate sanction after sanction, or respond in kind?

Either way, Russia loses. I believe Europe has the worst of it, but both suffer.

Hope for Sanity Appears to Be Lost Cause

By responding in kind, Russia hopes to put some sanity in the heads of US and EU officials. But with brains as dense as Obama, McCain, and various EU officials, hope for sanity appears to be a lost cause.

Sanction Madness Escalates: Italy Seizes Hotel of Putin Ally

Two days ago sanction madness hit a new extreme: Italy seizes Putin ally Arkady Rotenberg’s property assets.

The Italian tax police have seized €30m in assets, including a luxury hotel in Rome and two villas in Sardinia, controlled by Arkady Rotenberg, a longtime ally of Russian president Vladimir Putin targeted by US and EU sanctions. 

The move comes amid continued tensions between Russia and the EU over Ukraine, and ahead of a possible visit by Mr Putin to Milan next month for a summit with European and Asian leaders that could offer a chance to rebuild some bridges.

Speaking to Russian newswire Interfax, Mr Rotenberg said: “I have been subject to sanctions for several months. Nothing surprises me anymore. But what puzzles me is that the current situation involves real estate to which the sanctions do not apply. Sanctions only apply to accounts and assets which I do not have in Italy.”

Russia Threatens Law Allowing Seizure of Foreign Assets

Response from Russia was swift. Moscow Times reports Draft Law Allows Russia to Seize Foreign Assets in Response to Sanctions.

Russian courts could get the green light to seize foreign assets on Russian territory under a draft law intended as a response to Western sanctions over the Ukraine crisis.

The draft, which was submitted to parliament on Wednesday by a pro-Kremlin deputy, would also allow state compensation for an individual whose property is seized in foreign jurisdictions.

Italian authorities this week seized property worth about 30 million euros ($40 million) belonging to companies controlled by Arkady Rotenberg, an ally of President Vladimir Putin targeted by the U.S. and European Union sanctions.

The draft law, published on a parliamentary database, would allow for compensation for Russian citizens who suffer because of an "unlawful court act" in a foreign jurisdiction and clear the way to foreign state assets in Russia being seized, even if they are subject to international immunity.

Russian laws require three readings in the lower house and the approval of the upper house before going to Putin to be signed into law.

Blue Ribbon for Sanction Craziness

What would happen if Russia were to act in kind, by seizing McDonald's Real Estate Empire in Russia, Starbucks, or Exxon?

Does Russia have more assets in the US (for the US to seize) or does the US have more assets in Russia (for Russia to seize)?

The question is moot.

Illegal seizure of assets under the guise of "sanctions" is not a good idea. Sanctions in general are crazy, but in the ever-escalating madness, Italy is now in the lead for the much-coveted blue ribbon for sanction craziness.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com