The issue of confiscating russian assets frozen in the West and using them to compensate Ukraine for losses is still relevant. According to the European Commission, since the beginning of hostilities in Ukraine, EU countries have frozen assets of the russian Central Bank worth more than \u20ac217 billion. In addition, \u20ac24.1 billion of assets belonging to russians and companies under sanctions have been blocked.<\/p>\n\n\n\n
However, European officials have not yet found a reliable legal means to confiscate the frozen russian assets.<\/p>\n\n\n\n
What prevents the utilization of russian assets in Europe for the benefit of Ukraine?<\/p>\n\n\n\n
Experts insist: The “direct” seizure of russian state assets only on the grounds that they are subject to EU restrictive measures would be a violation of international law and could set a “dangerous precedent” with significant legal and financial risks. Indeed, according to international law, a state’s assets abroad may be confiscated as a result of a decision of the UN Security Council, the International Court of Justice, or a post-war agreement. Currently, each of these options is considered unlikely. Russia, as a permanent member of the Security Council, will definitely use its veto power over the results of any vote against it. In addition, experts warn that the confiscation of the assets of the Central Bank of russia will be assessed by the kremlin as a violation of its state sovereignty, which could provoke a nuclear conflict. The EU authorities also stated that one of the main obstacles they faced in applying financial sanctions against moscow was that russian assets abroad were often registered in the names of EU citizens or transferred ownership to them before the imposition of sanctions.<\/p>\n\n\n\n
It is worth noting that the confiscation of russian assets abroad does not mean their automatic return to Ukraine. According to Article 25 of the 2005 Council of Europe Convention, a state shall dispose of any confiscated property in accordance with its domestic law, unless the parties agree otherwise. At the same time, even after reaching an agreement on the return of such funds, the requested party may retain a part of the property and determine how it can be used by the other party.<\/p>\n\n\n\n
How can these assets be used legally for the benefit of Ukraine?<\/p>\n\n\n\n
To avoid risks during the confiscation of russian assets, Western countries should take a well-thought-out, coordinated and organized step.<\/p>\n\n\n\n
Experts and politicians believe that the Council of Europe’s recognition of russia as a terrorist state will open up new opportunities for the confiscation of frozen russian assets. As you know, it was the Council of Europe that, after russia’s withdrawal from its membership, repeatedly supported Ukraine’s international legal initiatives, and in May 2023, within the framework of this organization, an agreement was signed on the creation of a register of losses for Ukraine. Recognition of the russian federation as a terrorist state at this level will allow qualifying the actions of persons supporting the russian regime as terrorist financing. In this case, the Council of Europe Convention on the Prevention of Terrorism of 2005 could become a practical tool for seizing and confiscating the assets of persons financing the russian regime. Of course, the application of such a mechanism of asset confiscation will be possible provided that other legal entities also qualify the actions of the russian federation as terrorist acts. Currently, declarations recognizing russia as a terrorist state or state sponsor of terrorism have been approved by the Parliamentary Assembly of the Council of Europe, the European Parliament, the parliaments of Lithuania, Latvia, Estonia and Poland, and the NATO Parliamentary Assembly. However, some of the largest administrators of frozen russian assets – Belgium, the United Kingdom, and Switzerland – have not yet ratified the 2005 Convention, and thus this confiscation mechanism cannot be applied to them.<\/p>\n\n\n\n
An alternative option for the “creative” use of russia’s frozen assets without directly transferring them to Ukraine was proposed by the President of the European Council, C. Michel. At the end of last year, the European Commission put forward the idea of transferring the frozen assets of the russian state to a fund where they could be actively managed to generate profits to finance Ukraine’s recovery. This scenario assumes that the underlying assets will not be permanently confiscated, but will be returned to the russian state if a peace agreement is signed.<\/p>\n\n\n\n
In the meantime, the European Commission has focused on the “safest solution” – to direct the profits earned by European financial companies that own russian assets to the needs of Ukraine. According to the EC, this option could provide Ukraine with approximately \u20ac3 billion ($3.3 billion) a year.<\/p>\n\n\n\n
Determining the best option for using russia’s foreign assets to rebuild Ukraine should be the result of negotiations between the Ukrainian authorities and diplomacy with partner countries.<\/p>\n","protected":false},"excerpt":{"rendered":"
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