Arkady Rotenberg
Russian businessmen Boris Rotenberg (L, front,) and Arkady Rotenberg (R, front,) during an awarding ceremony of a judo competition in St. Petersburg.Reuters

Russia's national parliament has moved to pass a law that could see foreign assets being seized as a response to Western sanctions, but which also seems to provide cover for its most wealthy.

The draft law would also pave the way for the state to compensate Russians who lose property due to an "unlawful act" in a foreign jurisdiction.

While the bill has been promoted as a way to protect the interests of ordinary Russians, critics have accused its proponents of seeking to protect Russia's billionaires and officials from the impact of the sanctions.

Sanctions imposed by the European Union and the United States have targeted a number of state-linked companies, while the allies imposed asset freezes and travel bans number of individuals with close ties to the Kremlin, in the wake of Russia's annexation of Crimea in March.

The bill has been dubbed the "Rotenberg law" after Russian President Vladimir Putin's close ally, whose four Italian villas were seized in September under the EU's sanctions.

However, the bill's passage is far from certain. Russia's Economy Minister Alexei Ulyukayev spoke against the draft law before its reading in the Duma, warning it would exacerbate capital flight from Russia. Western sanctions have already provoked a wave of foreign capital outflow from Russia, surpassing $75bn (£46bn, €59bn) so far.

"Basically, we encourage the outflow of capital form the country in different forms, that is not the objective of our economic policy," Ulyukayev told the Russian parliament. "From my point of view it would be counterproductive."

Russia's lower house of parliament, the Duma, passed the first reading of the bill but it would require a further two readings before it could be considered being passed as law.