As well as the billions stashed away by Russian oligarchs, the savings of millions of the country's small-scale private investors were frozen by European banks following the invasion of Ukraine and the imposition of sanctions. These aren’t corrupt government officials or people who appear on the Forbes list, but members of the country’s once burgeoning middle class, many of whom oppose the war and despise Putin.
These are the most wide-reaching sanctions to have affected ordinary Russian citizens, including many who haven’t even lived in Russia for years, or who left after February 2022. Investors from other countries who bought securities through Russian brokers and banks are likewise affected.
The Boris Nemtsov Foundation for Freedom’s Ideas for Russia project and the Social Foresight Group research centre have carried out a detailed study of the problem, highlighting those affected by the sanctions. The head of the project, Zhanna Nemtsova, told Novaya Europe’s economic expert Denis Morokhin why she believes it’s wrong to punish people solely for their citizenship.
A protester holds a banner saying ‘Putin is a killer’ at a rally outside the Russian Embassy in Riga, Latvia, 17 March 2024. Photo: Toms Kalnins / EPA
DM: I want to ask you first of all to identify the problem. Which assets are we talking about being frozen here?
ZN: It’s important to understand that we are not talking about sanctioned oligarchs or billionaires who are great at defending their interests and fighting sanctions in courts.
There are three groups of assets that have been blocked since the start of the war. First and foremost, these are Russian sovereign assets frozen after Europe, the US and others imposed sanctions. Various estimates put their value at $280 billion to $330 billion.
The second group are the accounts, real estate and investments of sanctioned Russian individuals: oligarchs, officials, managers of state-owned companies.
“The Central Bank of Russia only provides ballpark estimates of how many people are affected by the freeze.”
And the third, and largest group, are the private assets frozen due to sanctions on Russian financial bodies, such as the St. Petersburg Stock Exchange or brokers and banks through which Russian citizens bought foreign securities. There is a lot we don’t know about these assets. Some probably belong to sanctioned persons, possibly through companies.
But there are others owned by those who have not been sanctioned, who most likely form the vast majority of individuals who own the frozen assets. The Central Bank of Russia only provides ballpark estimates of how many people are affected by the freeze. It’s important to understand which private investors are not under sanctions. As things stand, we are a long way from understanding the scale and structure of the problem. But, based on our analysis, we can say that small- to medium-sized assets owned by those without large incomes are the ones that have been frozen most often.
‘A huge blow to the Russian middle class’
DM: What motivated you to take on this topic in the first place?
ZN: I stumbled across the topic quite by chance. I met people from the Russian-speaking business community in Europe. A wide range of people got together to discuss different ideas, when one participant said that huge funds belonging to individuals were frozen in the European Union. I hadn’t heard anything about that before so I asked for a little more detail. This businessman and I spoke on the phone.
DM: Did you decide to tackle frozen assets because of the scale of the problem?
ZN: I decided to because it’s such a huge blow to the Russian middle class, and a serious blow to the anti-war community, since our online survey of victims showed that about 40% of them no longer live in Russia, having left at the beginning of the war, mainly for the EU.
Different restrictions, such as visa difficulties, get discussed much more often, but frozen assets are no less widespread as a problem. In fact, they’re the most massive sanction Russians face, and affect the most progressive section of Russian society, and citizens of other countries — clients of the Russian financial system.
It doesn’t help Ukraine and doesn’t undermine the foundations of the Putin regime. Moreover, it goes against the principle that private property is inviolable and cannot be seized without a good reason and or a court order.
An anti-war march by Russians in Berlin, Germany, 1 March 2025. Photo: Vasily Krestyaninov / Novaya Gazeta Europe
Everyone’s a winner
DM: So tell me what you propose to do.
ZN: First we need to conduct an inventory of assets and gather the most detailed information possible on all their end beneficiaries. I would then also create a very simple online system where you can register as an unsanctioned private investor whose assets have been frozen. This wouldn’t be difficult, but it would require the approval of the European financial authorities and regulators. This would help us calculate how many unsanctioned Russians had lost access to their savings.
DM: What’s the next step?
ZN: If the European financial authorities conduct an inventory and identify Russians who aren’t under sanctions, then, according to existing EU legislation, their assets can be unfrozen. Remember, we are talking about Russians resident in the European Union who have bank accounts there. The unfreezing process itself should be simple, and the EU could take a commission for reviewing the application and going through the documents, which it could then direct towards goals it deemed necessary and important, such as supporting Ukraine.
DM: Will this require changes to national legislation in various European countries, or can everything be done at EU level?
ZN: I think this can be solved via European Commission directives.
DM: So that covers Russians who have left Russia. But what about those who have stayed behind?
ZN: For them, sadly, it’s impossible to unfreeze assets as long as sanctions remain in place. We can act only within the framework of the sanctions regime, which has led to all ties between European and Russian financial institutions being cut. They would have to leave Russia to unfreeze their investments.
A man protests at the Russian Embassy in Riga, Latvia, 17 March 2024. Photo: EPA / TOMS KALNINS
For Europe, not Putin
DM: You’ll definitely hear people say that given Russia attacked Ukraine, it would be inappropriate to lift financial sanctions on Russians. Do you have a counter-argument?
ZN: I believe protecting private property is key. Putinism was originally built on the belief that only those loyal to the president should be able to own large assets. This is very dangerous.
I see nothing as more important for democracy and the protection of free speech and other freedoms than the protection of private property. It’s very important to say it out loud, because it has been forgotten.
DM: Does this campaign mark your entry into politics?
ZN: No. I have a very narrow definition of politics. Politics means fighting for power, contesting elections. Whereas I head the Nemtsov Foundation. This is a public advocacy campaign, a public interest campaign with a political dimension.
“I’m a pragmatist. The Russians who have left the country are talented and smart. They can either be a useless burden or of great benefit to the European Union.”
DM: Does it feel to you right now that even more Russians in the EU are currently having their bank accounts closed, struggling to gain residence permits, and so on?
ZN: Yes, unfortunately, until the war stops, it looks like people with Russian roots will periodically face knockbacks on all sides. The trouble is, these sanctions on Russians don’t solve a single problem. Massive sanctions on people with Russian passports won’t stop the war.
But there are other sanctions worse than closing people’s accounts. There is an EU regulation that says that if you are a Russian citizen, even if you have an EU citizenship or residence permit, you cannot bid for state contracts being put out to tender. The same applies to companies with over 50% Russian ownership, even if said owners also have European citizenship or a residence permit. That’s to say, you can only bid for state projects if you renounce your Russian citizenship.
If you have a company in Europe and you own technology that the European Union needs, European government customers cannot use it. It’s absurd. I’m a pragmatist. The Russians who have left the country are talented and smart. They can either be a useless burden or of great benefit to the European Union.
