The EU announced last week that it would be voting to implement new sanctions against Russia, the sixth round it has imposed since the country invaded Ukraine. This sanction package is unique as part of its approach includes banning Russian citizens, residents, and entities from purchasing real estate within EU territory, Bloomberg reported.
Concerning EU real estate, the sanction proposal will prohibit the sale or transfer — directly or indirectly — of “ownership rights in an immovable property located within the territory of the Union.”
The sanction would also be applied to investment properties such as apartment buildings and rental properties. At this time, it is not clear whether the EU will push for the sanction to affect existing properties or only ban new prospects.
The ban applies to Russians who are not EU citizens and do not have proper residency permits to live in EU member states.
Sanctions from the EU and other nations are meant to pressure Russian President Vladimir Putin in retaliation for his “special military operation” in Ukraine. In addition to the EU’s efforts to directly target Russia’s most lucrative export, the oil industry, these sanctions will be hard-hitting because they target the ability of Russians to purchase EU real estate.
Wealthy Russian oligarchs began taking advantage of EU property in the 90s, distributing their wealth throughout Europe after the fall of the Soviet Union.
According to Bloomberg, Roman Abramovich, owner of Chelsea Football Club and investment company Millhouse, owns a 26,000 square-foot chateau in France. Suleyman Kerimov, who has close ties with Putin and the Kremlin, also has a “high-end” property within the EU that features a tennis court and a large outdoor pool.
The Russian elite, who are thought to be part of Putin’s inner circle, has been a target of sanctions since the invasion. The U.S., UK, and EU all imposed separate but severe sanctions upon these Russian oligarchs, including freezing their bank accounts and seizing their assets, such as luxury yachts.