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| Has the EU found a way to deal with frozen Russian assets, creating an unprecedented precedent, a 'turning point' in international law? (Source: Getty Images) |
What seemed like a far-fetched idea two years ago – that frozen Russian assets could be used to pay for the reconstruction of conflict-torn Ukraine – is becoming a reality, and could set a landmark precedent in international law.
The Political Committee of the Parliamentary Assembly of the Council of Europe (PACE) has officially adopted a draft resolution on the seizure of frozen Russian assets and their use to support reconstruction in Ukraine.
This announcement was made in a statement recently published on the PACE website.
In the draft resolution based on the report of Mr. Lulzim Basha (Albania, EPP/CD), the Committee stated, “Russia, as a party to the conflict with Ukraine, should fully compensate Kiev, including for the destruction of infrastructure, economic hardship and other negative impacts…”.
PACE's information stated that about 300 billion USD of Russian sovereign assets currently frozen "will be used to rebuild Ukraine".
The lawmakers pointed out that by June 2023, the recorded damage to Ukraine's infrastructure and economy due to Russia's military campaign is estimated at $416 billion.
The PACE Commission recommends the establishment of “an international redress mechanism” under the auspices of the Council of Europe, including an international trust fund for Russian assets held by member and non-member states of the Council of Europe and an “impartial and effective” international mechanism, a complaints committee, operating in accordance with recognized judicial standards, to adjudicate on the claims of Kiev and other entities affected by the special military operation that has lasted for nearly two years.
PACE called on EC member and non-member states holding Russian assets to “actively cooperate” in transferring these assets to such a mechanism – with the support of the EU, the US and the G7. The committee cited international law, which gives states the authority to take countermeasures against states deemed to have committed serious violations of international law.
“It is now time for EC member states to move from sanctions to countermeasures,” the Commission said, adding that the legality of such countermeasures remains “unacceptable” within the framework of sovereign immunity.
“It is now time for EC member states to move from sanctions to countermeasures,” PACE added, adding that the legality of such countermeasures “cannot be challenged” within the framework of sovereign immunity.
Thus, the EC has decided to “take the lead” in expressing solidarity with Ukraine and its people, by removing Russia from its membership and establishing a “Damage Register” to record Ukraine’s damage, loss or injury, as a first step towards holding Russia accountable for the military campaign.
The PACE Commission concluded that such steps would achieve the triple objective of strengthening Ukraine, ensuring Russia’s accountability and preventing future risks. The Pan-European Assembly – a gathering of parliamentarians from 46 member states – will debate the report at an appropriate time.
Recently (January 24), the US Senate Committee also passed a bill to help Washington confiscate Russian assets and hand them over to Ukraine for reconstruction after the military campaign launched by Moscow in Ukraine.
If the bill is passed by both the US Senate and House of Representatives and signed into law by President Joe Biden, it would pave the way for Washington to seize central bank assets from a country with which it is not at war for the first time.
In the early days of the Russia-Ukraine conflict (February 2022), US Treasury Secretary Janet Yellen vehemently rejected the idea of seizing Russian assets, arguing that it was not “legally permissible.” But the idea has recently gained new momentum—fueled in part by Russia’s continued assertiveness in the conflict, and in part by growing concerns about the “near-term future” of US and Western aid to Kiev.
On the Ukrainian side, on January 27, in his nightly video address to the nation, Ukrainian President Volodymyr Zelensky appeared quite impatient, asserting that - all Russian assets and assets of individuals with links to Russia must be used to compensate for what Moscow has created. Mr. Zelensky also urged the EU on a new package of sanctions against Russia.
“I would like to note the results of contacts with our partners on Russian assets. This month we have come closer to the decision we need, which will be a fair decision,” Zelensky said.
Accordingly, all Russian assets, including those of the individuals involved, located in different jurisdictions and frozen, must be confiscated. And we are doing everything to ensure that this decision will be implemented in the near future,” the President of Ukraine stressed.
If Russian assets frozen in the wake of the Russia-Ukraine conflict were seized by Europe or the United States, this would be an unprecedented move in international law.
Similar seizures of state assets have occurred before, most notably when the US seized billions of dollars in Iraqi funds earmarked to compensate Kuwait after the 1990 conflict, Foreignpolicy commented. But the possibility of seizing hundreds of billions of dollars—nearly half of the total assets of the Russian Central Bank—would be a significant change in how countries respond to another country, with the potential to reshape international law in relation to future conflicts.
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