MOSCOW — The Russian Parliament on Wednesday took the first major step to authorize the Kremlin to seize foreign assets and use them to compensate individuals and businesses being hurt by Western sanctions over the Ukraine crisis.
Legislation that passed its first round stands to arm the government of President Vladimir Putin with a remarkable weapon of retribution, effectively allowing the government to compensate the same insider businessmen and other elite who Western leaders had hoped would persuade the Russian leader to reverse course in Ukraine.
Although its full parameters were still unclear and it faces several hurdles, the legislation has the potential to ensnare large multinational corporations that have invested heavily in Russia. Global companies like McDonald’s, Pepsi and ExxonMobil hold tens of billions of dollars of assets in the energy-rich country.
The sanctions imposed by the United States, the European Union and others in varying phases since March had been intended to bring Russia to heel. But Putin pushed back. In August, Russia announced that it would ban many imports of food and agricultural products from Europe and the United States.
Russian news media have taken to calling the latest proposal the Rotenberg Law, after Arkady Rotenberg, a former judo-sparring partner of Putin, turned wealthy industrialist.
Last month, the Italian authorities seized a reported $40 million in real estate, connected in part to Rotenberg, who has been sanctioned.
After that, United Russia, a political party loyal to Putin, reintroduced the bill. It had first been rejected by the government last spring.
The legislation must be approved two more times by the lower chamber of Parliament, or Duma, and the Russian senate, then signed by the president to become law. The initial passage could well be saber-rattling but is still an alarming sign that Russia will not take the sanctions lightly. Even early discussions of the rule in Parliament precipitated a stock sell-off late last month, given the stakes for international corporations.
In the past, the Russian government has made no bones about taking apart private assets, dismantling the once-largest domestic oil company, Yukos, and jailing its former owner, Mikhail B. Khodorkovsky, for a decade. Last month, a court ordered another Russian billionaire, Vladimir P. Yevtushenkov, placed under house arrest.
U.S. companies with large investments in Russia have been apprehensive about possible retribution or losing business to Asian competitors, Alexis Rodzianko, the director of the American Chamber of Commerce in Russia, said in an interview. Russia, he said, now has a “hierarchy of procurement” putting Asian businesses first.