Can A Russian Citizen Buy A Property In Italy?

russian can buy homes in italy

Impact of EU Sanctions on the Business Activities of Russian Nationals and Individuals Resident in Russia

What acts can notaries receive from Russian citizens?

Amidst the EU sanctions against Russia, there are concerns about how these impact Russian citizens seeking to purchase real estate or company shares in Italy.

First, we must distinguish between two types of Russian citizens:

  1. Those on the sanctions list: They are prohibited from conducting any transactions.
  2. All others: There is no general prohibition on the buying or selling real estate or company shares.

Sanctions include:

  • Limits on bank deposits: Russian citizens cannot deposit more than a certain amount.
  • Ban on buying euro-denominated securities: No investments in European securities after April 12, 2022.
  • Ban on investments in certain sectors: No business in strategic sectors.

What does this mean for notaries? They must be cautious when receiving acts from Russian citizens and:

  • Check if the citizen is on the sanctions list.
  • Verify that the transaction does not violate the sanctions.

In some cases, sanctions may make it difficult for Russian citizens to purchase real estate or company shares.

Let’s dig and explore the various aspects:

1) Freezing of Funds for Russian Citizens: Implications for Notaries

Sanctions against Russia for the war in Ukraine include freezing funds for certain Russian citizens.

What does this mean?

For Russian citizens on the sanctions list:

  • Prohibition on any business activity.
  • Ban on buying or selling stocks and bonds.

What should notaries do?

  • Check if the Russian citizen is on the list.
  • Reject the act if the citizen is on the list.
  • Report suspicious transactions to the Authorities.

What if the Russian citizen is not on the list?

  • Assess if the transaction violates other sanctions.
  • Pay attention to transactions that could indirectly benefit sanctioned individuals.
  • Report suspicious transactions to the authorities.

Gifts:

  • Gifts are not prohibited unless they involve the use of frozen funds.
  • Gifts received by sanctioned individuals will be frozen.

Verification:

Before accepting an act from a Russian citizen, notaries must:

2) Sanctions on Russian Citizens: What Notaries Need to Know

There’s no blanket ban on Russians buying or selling property or company shares.

However, certain limitations apply:

  • Bank deposits: Restrictions on depositing money at banks.
  • Securities: Ban on buying securities in EU member state currencies issued after April 12, 2022.
  • Cryptocurrency: Prohibition on providing crypto wallet, account, or custody services to Russian citizens and residents.
  • Legal advice: Ban on advising the Russian government and entities established in Russia (with exceptions).

Before notarizing acts involving Russian citizens:

  • Check if they’re on the sanctions list.
  • Assess if the act violates any existing restrictions.

Seek legal advice if unsure.

Potential issues:

  • Real estate purchase by a sanctioned Russian citizen.
  • Company formation by a Russian to bypass sanctions.

In these cases, notarization might be impossible.

Remember, the situation is evolving, and new sanctions may arise.

3) Restrictions on Russians Buying Real Estate in Italy

Can Russian citizens buy real estate in Italy?

Except for those on the sanctions list, there is no general prohibition on Russian citizens buying or selling real estate in Italy.

What about the ban on deposits over €100,000?

This does not apply to Russians buying real estate. The ban prevents Russian citizens from depositing more than €100,000 in EU banks, not from making payments for property purchases.

What about the reciprocity requirement?

Notaries must still verify the reciprocity condition before accepting an act involving a Russian buyer. The Ministry of Foreign Affairs is responsible for determining the criteria for reciprocity.

What about the EU sanctions on Russia?

The EU sanctions do not explicitly prohibit Russian citizens from buying real estate in Italy. However, the European Commission has stated that the “most favored nation” clause of the World Trade Organization (WTO) no longer applies to Russia. This could affect the validity of the bilateral agreement between Italy and Russia, which allows for reciprocity.

What should notaries do?

Notaries should consult the Ministry of Foreign Affairs to determine if the bilateral agreement is still in force. They should also check the sanctions list and verify the reciprocity condition before accepting an act involving a Russian buyer.

4) Restrictions for Selling Property by Russian Citizens

1. Deposit Ban for Amounts over €100,000:

  • This applies to deposits in EU bank accounts.
  • Excludes dedicated notary accounts.
  • Excludes deposits in non-EU banks, like Russia.
  • Excludes Russian citizens with EU, EEA, or Swiss citizenship.
  • Excludes Russian citizens with temporary or permanent residence permits in the EU, EEA, or Switzerland.

2. No Sales Price Limit:

  • The deposit ban doesn’t cap the property’s selling price.
  • The selling price can exceed €100,000.

3. Purchase Price Deposit:

  • Payment cannot violate the deposit ban through regular bank accounts.
  • Depositing the purchase price into a dedicated notary account is allowed.
  • Notaries must monitor usage to prevent ban circumvention.

4. Notary Responsibilities:

  • Verify reciprocity exists.
  • Check if the Russian citizen is on the sanctions list.
  • Ensure compliance with the €100,000 deposit ban.
  • Report suspicious transactions to authorities.

5) Restrictions on buying and selling shares by Russian citizens

Can Russian citizens buy or sell shares in EU companies?

  • Russian citizens not on the EU sanctions list can generally buy and sell shares in EU companies.
  • There is no limit on the value of shares that can be bought or sold.
  • However, there are some restrictions on the sale of shares in companies operating in the energy sector in Russia.
  • Russian citizens cannot sell shares in companies operating in the energy sector in Russia to other Russian citizens or residents of Russia.
  • They can only sell shares to EU citizens or residents of EU countries.
  • This restriction is designed to prevent Russian citizens from circumventing EU sanctions on the energy sector.

Can Russian citizens buy or sell shares in Russian companies?

  • Russian citizens can generally buy and sell shares in Russian companies.
  • However, there are some restrictions on the sale of shares in companies operating in the energy sector in Russia.
  • Russian citizens cannot sell shares in companies operating in the energy sector in Russia to other Russian citizens or residents of Russia.
  • They can only sell shares to EU citizens or residents of EU countries.
  • This restriction is designed to prevent Russian citizens from circumventing EU sanctions on the energy sector.

What are the penalties for violating these restrictions?

  • The penalties for violating these restrictions can be severe.
  • Individuals who violate the restrictions can be fined up to €50,000.
  • Companies that violate the restrictions can be fined up to €100,000.
  • In addition, individuals and companies that violate the restrictions may be denied access to EU markets and financial services.

What are the exceptions to these restrictions?

  • There are a few exceptions to these restrictions.
  • For example, the restrictions do not apply to the sale of shares in companies operating in the energy sector in Russia if the sale is necessary to ensure the critical energy supply within the EU.
  • The restrictions also do not apply to the sale of shares in companies operating in the energy sector in Russia if the sale is made to a person or entity that is not subject to EU sanctions.

What should I do if I am unsure whether a particular transaction is prohibited?

  • If you are unsure whether a particular transaction is prohibited, you should consult with a lawyer or other qualified professional.
  • They can advise you on the specific restrictions that apply to your situation and help you ensure that you comply with EU law.

Conclusion

The ongoing conflict between Russia and Ukraine continues to evolve, while the European Union persists in issuing sanctions against Russia over time. Currently, there is no general prohibition on real estate and corporate transactions by Russian nationals, except for those affected by asset freeze sanctions and the trading of euro-denominated securities issued after April 12, 2022. However, some sanctions impose limitations affecting the normal course of notarial activities.

The information provided here is no legal advice, but only for informational purposes. You should always consult with qualified professionals before making any decisions.