In search of legalization: will the EU succeed in using frozen Russian assets to help Ukraine

The European Council is considering using Russia's frozen assets to rebuild Ukraine with these funds and pay "reparations" to it, according to a statement issued following the meeting in Brussels.

“The European Council invites the Commission, the High Representative and the Council (of the European Union. -

) to continue to work in this regard in accordance with EU legislation and international law, and to emphasize that the issue of holding accountable ... occupies the entire international community, ”- says in the document.

Sanctions without confiscation

Recall that after the start of a special military operation in Ukraine, Western countries and their allies increased sanctions pressure on Moscow and froze about half of Russia's gold and foreign exchange reserves (about €300 billion).

After that, the Kyiv regime declared that the assets alienated from the Russian Federation should go to Ukraine.

In particular, Denis Kudin, First Deputy Minister of Economy of Ukraine, said this back in March.

“Western governments have already arrested the gold and foreign exchange reserves of the Central Bank of the Russian Federation.

We expect that in the near future, together with the governments of other countries, we will find a legal mechanism for how this money can go to Ukraine for restoration and compensation, ”the official said.

However, since then, the EU authorities have not found a way to transfer funds from frozen Russian foreign assets to Ukraine.

At the end of November, The Wall Street Journal, citing sources in the EC, reported that the European authorities could not send these funds to Kyiv, since the confiscation of assets would violate the principle of international state immunity.

Nevertheless, the head of the European Commission, Ursula von der Leyen, came up with a proposal to create a special structure for managing frozen assets.

In her opinion, Moscow and the "Russian oligarchs" should "compensate damage to Ukraine", which is estimated at €600 million, and cover the costs of restoring the country.

“We blocked €300 billion from the reserves of the Bank of Russia and froze €19 billion from the funds of Russian oligarchs.

In the short term, we could, together with our partners, create a structure to manage and invest these funds.

The profit will be directed to meet the needs of Ukraine.

After the sanctions are lifted, these funds should be used to fully cover the damage caused by Russia to Ukraine, ”the head of the EC said.

Von der Leyen added that the EU, together with its partners, will work on "an international agreement that will make the above possible."

• Council of Europe

• Gettyimages.ru

• © Mustafa Yalcin/Anadolu Agency

The search for an effective way to transfer funds from frozen and blocked Russian assets to Ukraine was also announced a little later by the head of European diplomacy, Josep Borrell.

“Although “frozen” and “blocked” does not mean “confiscated,” we will explore legal ways to ensure that Russia pays for the restoration of Ukraine,” Borrell said in a statement.

Illegitimate actions

In Moscow, the actions of the countries of the collective West are regarded as illegal.

So, the press secretary of the President of the Russian Federation, Dmitry Peskov, stated at the end of October that these states had actually stolen Russian funds.

“These are absolutely illegal actions, they are contrary to international law, and this is nothing more than an encroachment on property, in this case state property and private property,” the Kremlin spokesman said.

Peskov added that the idea of ​​transferring the frozen funds to the Ukrainian side would be another step in violating all the rules and norms of international law.

“Of course, we will look for ways to fight this,” the presidential spokesman said.

The Russian Foreign Ministry, commenting on the proposals of the EC on further actions in relation to the assets of the Russian Federation, said that Brussels is trying to legitimize the imposed sanctions and appropriate Russian funds.   

“All this hectic activity of the EC is aimed at finding ways to “legitimize” the illegal sanctions imposed on our country and theft of assets belonging to Russian individuals and legal entities, not by washing, but by rolling,” said Deputy Foreign Minister Alexander Grushko.

In turn, the official representative of the Russian Foreign Ministry, Maria Zakharova, emphasized: “We once again warn that if it comes to real confiscation of the property of the Russian Federation and Russian citizens, enterprises, state reserves of our country, then adequate measures will inevitably follow from the Russian side.”

According to her, Russia will not limit itself to statements alone, and the responsibility for possible consequences for European business will lie with Brussels.

• Russian Foreign Ministry Spokesperson Maria Zakharova

• RIA News

• © Press Service of the Ministry of Foreign Affairs of the Russian Federation

Stalemate situation 

The EU is trying to find a legal justification for the appropriation of Russian assets, but so far it cannot do this without creating a dangerous precedent, Vladimir Bruter, an expert at the International Institute for Humanitarian and Political Studies, said in a comment to RT.

“The assets of the Russian Federation cannot be legally appropriated by the West, since at the time of their freezing there were no laws allowing this.

They can be used in various ways, like all the financial resources that are on a correspondent account in a bank, but they will still belong to Russia.

Therefore, the EU is now in a hopeless situation,” the political scientist explained.

According to him, setting a precedent for the withdrawal of frozen funds will lead to the fact that other countries can also take similar steps to gain political leverage.

“Such a precedent will be a signal that if someone really wants to, he can simply take other people's money,” the expert noted.

For this reason, the EU is afraid to cross the line with the confiscation of Russian assets and is trying to come up with indirect forms of their use, such as investments with the subsequent transfer of profits to Ukraine, the analyst said.

“They will continue to keep them frozen without making a final decision.

It all depends on how long the special operation will last and how it will end, ”Bruter emphasized.

A similar opinion is shared by Oleg Matveychev, Deputy Chairman of the RF State Duma Committee on Information Policy, Information Technologies and Communications.

In a RT commentary, he expressed the opinion that there was nothing behind the talk of "continuing work" towards the confiscation of Russian assets. 

“Continuing work, as the EU statement says, means doing nothing.

You either have to make a decision or you don't.

They cannot make a decision, because it would be contrary to all international laws.

In addition, they will lose much larger amounts of non-resident assets blocked in Russia.

Together with these assets, we still have a huge amount of property of non-residents in our country.

Therefore, they cannot take something from us just like that, without prejudice to themselves, ”the politician explained.

Theoretically, the EU may, under pressure from the United States, go for the confiscation of assets, but the situation has not yet reached this point, Matveychev added.

“There is no decision in Washington on this issue, so the EU authorities pretend that they are thinking something, studying and so on.

After all, they are well aware that such a step will lead to a retaliatory nationalization of their assets here in Russia, which will mean big losses for Europe, ”concluded the interlocutor of RT.