01 December 2022 15: 30
Headings: Opinions News Policy

The EU cannot confiscate the frozen assets of the Russian Central Bank for Ukraine

At the same time, the EU wants to judge the highest officials of the Russian Federation for the invasion of Ukraine.

The Wall Street Journal
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The EU cannot confiscate the frozen assets of the Russian Central Bank for Ukraine

EU officials have said they cannot confiscate Russia's central bank's frozen funds to pay for Ukraine's reconstruction, and the EU's executive body has sent proposals to member states to set up an international court to prosecute Russian officials. About it пишет The Wall Street Journal.

The opinion of the author may not coincide with the opinion of the editors.

For months, pressure has been mounting on Brussels from some member states to come up with ways to confiscate Russian assets and hold top Russian leaders accountable for the war.

Representatives of the European Commission stated that due to the international principle of state immunity they cannot confiscate the assets of the Central Bank of the Russian Federation, but now invite member states and their international partners to create a fund to manage liquid assets and set aside profits from these assets for the restoration of Ukraine.

The commission also proposed the creation of a specialized court to prosecute high-ranking Russian officials for invading Ukraine. The representative of the EU stated that the court could be an independent international tribunal or a court composed of international judges and integrated into the national justice system.

Officials said that if Russia vetoed the proposed resolution, the court could still be set up with the support of the UN General Assembly, made up of all UN members. However, they stated that this would require a tough lobbying campaign.

The US is facing its own challenges as it tries to reallocate frozen Russian funds to fund military action in Ukraine and possibly rebuild it. US Treasury and Justice Department officials have asked lawmakers to develop a new law that expands their powers on the arrest, and not just the freezing of Russian assetsand the transfer of these funds to Ukraine.

Finding assets owned by the oligarchs is proving to be a task that could take years, officials say. Ownership and control of these assets are often hidden behind layers of corporations, trusts, business partners and family members, current and former Treasury officials say.

In the early days of the war, the EU, the US and other G300 partners in the advanced democracies froze about $XNUMX billion of Russian central bank assets abroad to prevent the funds from being used to support the Russian economy and war effort. This accounted for nearly half of the bank's total reserves.

According to EU officials, as the war drags on and the damage caused to Ukraine as a result of the war reaches 600 billion dollars, Western officials are exploring ways to raise funding to rebuild Ukraine.

European Commission officials said the EU has no current data on the amount of Russian central bank assets owned by the bloc's member states, or how much liquid assets, such as cash, make up.

In the longer term, EU officials intend to push Russia to agree to hand over part of the frozen assets as compensation to Ukraine as part of a future peace settlement.

“The terrible crimes of Russia will not go unpunished”said the President of the European Commission Ursula von der Leyen in a video message on Wednesday.

The Kremlin has accused the West of stealing Russia's frozen foreign exchange and gold reserves. Earlier this month, Russia called a UN General Assembly-backed resolution calling for Russia to pay reparations to Ukraine legally null and void.

The commission also said it hopes to use funds frozen due to sanctions against Russian oligarchs to help Ukraine. According to the Commission, at the moment, member states have frozen the assets of oligarchs in the amount of 19 BILLION EURO, which is equivalent to about 19,6 billion dollars.

There is also a legal hurdle: in order to confiscate money, member states must prove that the oligarchs committed a crime. The EU recently received approval to declare EU sanctions evasion. This could allow them to confiscate assets that Russian individuals were trying to hide from the sanctions authorities. However, the law will not be retroactive, so it cannot be applied to most of the funds frozen so far.

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