Moscow imposes additional restrictions on foreigners who trade Russian assets.

According to a client note from multinational banking giant Citigroup obtained by the Reuters news agency, Russia has established tight requirements for foreigners seeking licences to buy and sell Russian equities and real estate.

Russia briefly halted foreigners from selling Russian assets earlier this month, claiming that it wanted to guarantee that choices were made based on facts rather than political pressure, as sanctions have risen in response to Moscow’s full-scale invasion of Ukraine.

Funds with tens of billions of dollars in Russia exposure have been waiting for specifics on the additional constraints they will face when selling assets.

The invasion, which Moscow refers to as a “special military operation,” prompted a mass evacuation of international companies and effectively cut Russia’s economy off from the rest of the world.

This month, the Russian government issued Decree 81, which states that every transaction involving Russians and foreign counterparties must be approved by Russia’s Government Commission for Control of Foreign Investment.

Foreign investors who had bought Russian stocks and bonds without limitations were effectively stuck with them as the economy shifted from an appealing oil-rich investment destination to a financial pariah.

According to the Citigroup document, Russia has now spelled out the terms of the application process for foreigners intending to trade assets, which will limit trading to those who have been granted licences.

Foreign investors who wish to acquire and sell Russian assets must first supply thorough information in order to receive a trading permit.

The new rules are as follows:

“The order for acquiring permissions to carry out operations stipulated by Decree 81 has been announced by Russian authorities. “An authorized body with the authority to make decisions on permit issuing has been constituted,” according to the memo.

According to the agreement, “information on the goal, subject, content, and fundamental circumstances of the transaction” must be presented to the Russian finance ministry in the Russian language.

The document further states that applicants must provide complete information on beneficiaries and beneficial owners.

“It’s a control mechanism,” one financial insider said of the guidelines. “This is simply a method to control which corporations are allowed to trade foreign cash, and companies from hostile countries will not be leaving the country.”

Citigroup declined to comment other than to confirm the memo’s authenticity.