EU Proposes Options To Seize Frozen Russian Assets, But Legal Concerns Remain – Eurasia Review

By Alexandra Brzozowski

(EurActiv) — The European Commission on Wednesday (30 November) outlined legal options for confiscating Russian state and private assets to be used to finance Ukraine’s reconstruction.

“We have blocked €300 billion of Russian Central Bank reserves, and we have frozen €19 billion of Russian oligarchs’ money,” Ursula von der Leyen, president of the European Commission, said in a statement.

The ultimate goal is to use those Russian assets confiscated by the member states to support the reconstruction of Ukraine and compensate the country for the damage caused by the Russian invasion.

“We will work on an international agreement with our partners to make this possible. And together we can find legal ways to get there,” von der Leyen added.

According to the options document, the EU executive now wants to “clarify the international context, identify ways to strengthen the detection and identification of assets as preliminary steps for potential confiscation and to explore avenues that could lead to the confiscation of frozen Russian assets”.

According to EU estimates, by 25 November 2022, the total amount of private assets frozen in the EU within the bloc’s sanctions framework amounted to almost €18.9 billion.

As for Russian public assets, the exact total amount ‘immobilized’ in the EU due to transaction bans is currently unknown.

However, the problem is currently that in most EU member states seizure of frozen assets is only legally possible where there is a criminal conviction.

Furthermore, it is difficult to freeze or seize assets of blacklisted Russian citizens, as they are registered as belonging to family members or front people.

Evasion of sanctions

When it comes to private individuals and entities, the fact that their assets are frozen because they are on an EU sanctions list does not directly mean that it is possible to confiscate them.

In May, the European Commission unveiled plans to make it easier to seize frozen assets linked to serious illegal activity and suspected criminals, including those evading EU sanctions against Russia.

On Monday (November 28), the EU gave itself the legal authority to act against anyone who helps Russia avoid its sanctions, as member states unanimously agreed to make breaching restrictive measures against Russia an ‘EU crime’ will be considered across the block.

This is expected to make it easier to add individuals and entities from countries outside the EU to sanctions lists drawn up to punish existing actions such as Russia’s invasion of Ukraine.

It also aims to standardize the interpretation and application of EU sanctions law across the 27 member states, which often lack specific legal frameworks.

However, this will only be the case if there is a criminal offence, with the EU expected to argue each case in court, which could take years.

Since March, the European Commission has also had an EU sanctions whistleblower tool that can be used to report on “past, ongoing or planned” EU sanctions violations, as well as attempts to circumvent them.

Brussels has also set up a ‘Freeze and Seizure’ task force for EU-wide coordination in the enforcement of sanctions and in the area of ​​asset freezing.

Russian central bank

The other option concerns assets of the Russian Central Bank, which form the larger pot of money but are more difficult to access as they are usually covered by state immunity.

The document points to a UN convention on jurisdictional immunities of foreign states and their property, which, however, is not yet in force.

Nevertheless, the European Commission is considering the possibility of looking at both short-term and long-term seizures, according to the options document.

“We know that within the EU and the G7 partners, around €300 billion of Russian Central Bank assets are immobilized, which means that Russia cannot draw on them,” an EU official said.

“We think that we can create a structure that will allow us to actually actively manage these assets and use the proceeds from the management of those assets, with the proceeds to be able to support Ukraine,” the official added.

Russia says the freezing of its central bank’s reserves and the assets of its citizens is illegal.

Legal experts point out that from an international law perspective, the use of Russian central bank assets would be legally difficult without Russia’s consent.

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