2nd Oct 2023

EU: Russian assets to be returned in case of peace treaty

  • Some member states have called on the EU to hand over the Russian Central Bank reserves to Ukraine (Photo: Alde)
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The EU on Wednesday (30 November) proposed a plan to confiscate frozen Russian assets — but has to navigate through difficult legal waters to make it work.

Legally it is only possible to seize frozen assets if the holder of those assets has been criminally convicted. It's also tricky to seize the funds because blacklisted Russians have often registered it to a family member or other person.

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EU Commission president Ursula von der Leyen said the EU has "frozen €19bn of Russian oligarch's money and blocked €300bn of Russian Central Bank reserves."

"Russia and its oligarchs have to compensate Ukraine for the damage and cover the costs for rebuilding the country," von der Leyen also said. "We have the means to make Russia pay."

To make it easier to seize assets belonging to individuals, the EU on Friday will present a law determining that helping Russia evade sanctions would be considered a crime under EU law.

But bar a clear "link to a crime," it would not be possible to confiscate money belonging to an individual, an EU official said, speaking on condition of anonymity.

The law will also not be applicable retroactively. "As a result, for the time being, it is very difficult to estimate the proceeds from such confiscation," the official said.

Concerning frozen assets, the EU commission, in a discussion paper, proposed to shift the €300bn in frozen assets into a fund.

The EU would manage the fund, and the proceeds would be used to help reconstruct Ukraine.

EU leaders in October tasked the commission to look into legal options to seize Russian assets outright. Josep Borrell, the EU's high representative for foreign policy, has in the past said he would be "very much in favour" of seizing the money and handed over to Ukraine for reconstruction — a call supported by Ukraine as well as Poland.

But under the current plan, the Russian reserves would not permanently be confiscated and would be returned if a peace agreement were to be signed.

EU aims to seize Russian assets amid legal unclarity

EU Commission president Ursula von der Leyen said "no stone should be left unturned" in helping Ukraine rebuild post-war, including possibly seizing and repurposing Russian central bank assets — a move which would likely be challenged under international law.


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