The Russian Parliament Just Passed That Crazy Law Letting The Government Seize Foreign Assets

A bill to allow Russian oligarchs to claim compensation from the state for overseas assets seized under international sanctions has been passed by the country's parliament.

The "Rotenberg bill" as it has been called, after Russian businessman Arkady Rotenberg had €30 million of assets seized by the Italian government, passed its first reading in the Duma by 233 votes to 202 against. The bill would also allow the government to seize foreign assets in Russia - a move that will likely cause Western and Asian investors to pull their money and resources out of Russia.

Its passage was all but guaranteed after the government made a dramatic U-turn last week.

Initially the government had claimed that it would not support the proposal from United Russia deputy Vladimir Ponevezhsky as it "violated international law." However, at the start of this month Vedomosti, the Russian business daily newspaper, reported Putin's press secretary Natalya Timakova as saying that:

[Prime Minister] Dmitry Medvedev, supported this initiative from the beginning and knew about its introduction.

The bill is already provoking controversy within the country, particularly among those concerned by the flagging economy and plummeting ruble. The Moscow Times quotes Economic Development Minister Alexei Ulyukayev as saying that "there is no better way to create capital outflow than passing or even discussing such legislation."

Though it has passed its first reading this is by no means the final step. The Rotenberg bill will have to be submitted to the Duma for a further two readings before it is passed to President Vladimir Putin to sign it into law.

The fact that Medvedev supports strongly suggests that this too shall pass.