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On 22/12/2023, a private investor who retained L&P to prepare an application and oversee the procedure of unblocking securities deposited in a blocked account with the National Settlement Depository (NSD) was officially notified by the Belgian Treasury on granting of permission to transfer bonds to an account opened with an alternative broker. L&P has accumulated numerous successful experiences of obtaining permissions of the financial authorities of EU member states to unblock assets of Russian investors “frozen” by Euroclear. However, the latest case has several particular characteristics that are worth mentioning.


The case began as a completely regular situation. Shortly before the imposition of sanctions against NSD, the client of L&P acquired a significant amount of foreign securities through one of the largest Russian banks. In March 2022, due to the imposition of sanctions against both NSD and the bank, the Russian investor lost the opportunity to dispose of his bonds and receive coupon income. Since the securities were accounted for in a common NSD account opened in the central European depository Euroclear Bank SA/NV (Belgium), the only way to restore the violated investor’s rights was to apply for unblocking to the competent Belgian financial supervisory authority – the Treasury. During the preparation of the application, L&P specialists thoroughly investigated and explained to the Belgian Treasury the chain of custody of the client’s securities, and also indicated the preferred “route” for their subsequent movement to a brokerage account opened in one of the EU member states, in case of obtaining an unblocking permit. In addition, a large Russian audit organization, which previously belonged to one of the “big four” companies, issued a conclusion to the client confirming his absence from the sanctions lists of the EU, the United States, Great Britain and other states, which was attached to the application sent to the Belgian Treasury.


The specifics of the case appeared already at the stage of consideration by the Treasury of the investor’s application.


First, a few months after sending the application, the investor received an interim response from the Treasury with a request for an additional document – the so—called “A priori reporting”. This document is a “guarantee” issued by a legal, auditing or financial organization registered in the EU, which would be able to vouch for the client and ensure that during the unblocking process the securities will not end up in the hands of persons subject to sanctions. Shortly after, the Treasury decided to limit itself to the documents already provided, and made a decision in favor of unblocking securities of the client. It is important to emphasize that actions of the Treasury fully confirm the position of L&P attorneys on irrelevance and in applicability of the so-called “general license” of the Belgian Ministry of Finance of 22 December 2022 to the cases of Russian investors. So, contrary to the popular opinion, the Ministry of Finance departed from the rule on the “sale” of assets, and also made a decision without demanding “A priori reporting” (guarantee) from a reputable company registered in the EU.


Second, in this case, the position and arguments of the Treasury are of interest, which in its decision specifically indicates the following:


∙ The applicant is a citizen of one of the southeastern EU member states;
∙ The ability to transfer securities belonging to the applicant from an account in NSD to an account opened by the client in a non-sanctioned broker;
∙ Precise determination of the type and quantity of securities of a specific issuer and a specific issue owned by the applicant and subject to transfer;
∙ The possibility of applying the permission of the Belgian Treasury in other EU member States in order to avoid additional checks while performing the transfer.


We welcome the latest authorization to unblock assets of our client. Despite the long waiting time, in the end, the Treasury recognized the accuracy of information and the validity of the arguments set out by us in the application, and made a positive decision. However, ahead lies the difficult process of enforcement of the authorization, because we will have to contact and connect all parties involved in the transfer, simultaneously clarifying the issue of bond repayment,” — comments attorney Anton Minakov.
Finally, it must be said that during the consideration of the application, the bonds were repaid, so now we are not talking about transferring securities themselves, but about receiving coupon income and the value of the repaid bonds in the form of cash, which, according to L&P professionals, was credited to the Euroclear account.
However, along the way, the dog could grow up, one must say,” — ironizes Alexander Linnikov with the words of the famous Russian children’s poem by Samuel Marshak and continues: “It turned out that over the period of consideration of our client’s application by the Treasury, the bonds in question were repaid, that is, turned into cash. Meanwhile, the essential characteristic of any license of the Belgian Treasury is that each document is a permit for a specifically defined operation, which is described in deep detail. Now we have to deal with two new tasks: first, to figure out the “fate” of the client’s securities, i.e. obtain reliable information about whether they were repaid and in what amount exactly, and, secondly, accomplish recovery of the client’s funds under the existing license.”
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