Over the first year of its all-out war against Ukraine, Russia accumulated nearly a third of its profits from commodity exports abroad, creating a new potential target for Western sanctions, Bloomberg reported on March 14.
According to a Bloomberg Economics estimate, about $80 billion of Russia's funds are dispersed across cash deposits, real estate, and investments in affiliated companies.
As a byproduct of a record current-account surplus, these shadow reserves have helped the Kremlin maintain its finances in the face of international sanctions introduced last year, the publication wrote.
"Due to Europe's delay with targeting Russia's energy sector, the Kremlin was able to accumulate one of the largest current-account surpluses in its history," said Maria Shagina, an economist at the UK-based International Institute for Strategic Studies, as quoted by Bloomberg. "This has de facto negated the effect of freezing the central bank assets in March 2022, as Russia could recoup what it lost."
By amassing assets abroad in 2022, Russia reportedly received a replenishment of about 5% of its gross domestic product.
These foreign assets could potentially become the next target of sanctions by Ukraine's allies, especially if the state directly manages the money, according to Bloomberg. Though Russia's government is a shareholder in many large exporters that contributed to last year's windfall, it is reportedly unclear who controls the funds.
Bloomberg added that even if the Western countries identified the owners of these funds and proved their links to Russia's state to impose sanctions, the proportion of discovered assets would likely be smaller than the official estimates.
The European Council issued a press release on March 13 extending sanctions against 1,473 individuals and 205 entities who support Russia's war against Ukraine for an additional six months.
According to the European Council, they hope the sanctions will deprive Russia of the ability to sustain the war by weakening its economy and denying it access to essential technologies and markets, diminishing its capacity to wage war.