Sinead Cruise, Matt Scuffham

LONDON/NEW YORK – Russia issued stricter rules to foreigners who want to sell or buy Russian assets. These include securities and real estate. A client memo from Citigroup (NYSE: ) was among a flurry of international companies fleeing West Sanctions.

Russia has temporarily stopped the sale of Russian assets to foreigners this month. The country stated it wants to see that exit plans are considered, not driven by political pressures, after Moscow invaded Ukraine.

Now, it has revealed details about the process to be followed by the Finance Ministry before assets may be traded. These include disclosures of beneficiaries and investments in defense.

Investors in Russia with billions of dollars have been waiting to learn more about the restrictions that they face when they try to get rid of assets. The backdrop is increasing economic isolation and President Vladimir Putin.

“I don’t think anybody in Russia dares telling Putin the financial problems which lie ahead,” stated Alastair Snow, a global strategist for Argyll Europe. Winter predicted that there would be “mass write offs” for many foreigners.

Moscow describes the invading force as a special military operation to demilitarize Ukraine. This has led to a large exodus from international companies and has severely isolated Russia’s economy.

Decree 81 was issued by Russian authorities in this month. It stipulates that foreign counterparties must have permission to transact with Russians.

This means that investors from abroad who bought Russian stock and bonds in the past without any restrictions were stuck with them while Russia’s economy struggles to transition from an oil-rich investment destination into a financial mess.

Russian authorities announced that they have issued the orders for permits to be granted in order to perform operations as per Decree 881. According to the Citigroup memo, an authorised body has been created that can decide on permits.

This involves a Russian financial ministry application in Russian. It contains “information about the purpose, subject and content of the transaction”.

According to the memo, applicants are required to disclose information about all beneficiaries and beneficial owner, along with details of any investments made in companies that operate in “strategic sectors” like aviation, space or production of natural resource or work with weapons, military equipment, among others.

One banking source said that the new rules are merely a way to limit the number of entities allowed to transact foreign currency. It won’t include companies from hostile nations exiting the country.

Citigroup did not comment on the authenticity or content of the memo.

Another source from a bank said that they advised clients not to trade under these terms. This was due to concerns about sensitive data sharing and lack of transparency regarding rejections and approvals of applications.