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While Russia has said seizing its assets would amount to ‘theft’, the question of whether such a move is legal under international law is a thorny one.
Europe is divided over whether an estimated €210bn in frozen Russian assets held in member states can be seized to support Ukraine’s military and help rebuild the country. While Russia has condemned these prospective plans as “theft”, European governments supporting the Ukrainian war effort have been examining whether such a move would in fact be permitted under international law. The total figure for assets frozen by the EU, US and other allies since Russia launched its full scale invasion of Ukraine is estimated at €274bn.The assets in question belong to the Russian central bank and were originally held as short-term government bonds, which acted as state reserves in international currency. The bonds have now matured and are piling up in cash form. The biggest chunk of assets, €183bn, is held at Euroclear, a Belgian clearinghouse for financial transactions. What complicates the situation is that central bank assets held in foreign countries are immune from jurisdiction under international law. “A court order which commands the government to seize the assets of Russia would be illegal under international law and under domestic law, which imports international law,” Federico Luco Pasini, Professor of Financial Law at the University of Durham, told Euronews.But there are still ways to overhaul this provision. “If there is an executive decision by the government to seize the assets, this could bypass potentially this issue”, Pasini said. This means that while a national court cannot issue a ruling to seize assets, a government decree or a European Commission regulation could do so.The only legal option: ‘A countermeasure’Additionally, Russian assets can only be seized legally under international law if the move is considered a “countermeasure”.Countermeasures are mechanisms enacted by states in response to a breach of international law by another state. They must be temporary and reversible, and legal scholars are divided on whether seizing Russian assets would fit these conditions. “A countermeasure is adopted to induce compliance, it’s not a retribution”, Pasini told Euronews. “This means Russia should have the opportunity to say ‘I’m sorry, I’m going to, you know, rectify whatever. I’m going to pay damages and then you leave my assets, you don’t touch them’.” What is legal: seizing interestAlthough they did not fully seize Russian assets but merely froze them, EU member states began seizing the interest from frozen assets in May 2024 to finance Ukraine’s military effort.”This is legal as jurisprudence affirms that the disposal of interest complies with the requirements for a countermeasure,” Pasini told Euronews. According to legal scholars, seizing interest is viable, as the loss of interests and profits is usually reversible. How have opinions across Europe differed?Among the EU countries who support seizing frozen Russian assets are the Czech Republic, Estonia and Poland. Just last month, Polish Prime Minister Donald Tusk suggested it outright, posting on X: “Let’s finance our aid for Ukraine from the Russian frozen assets.”But France, Germany and Belgium have all opposed a full seizure. Europe Minister Benjamin Haddad told the French Parliament last month that “the pure and simple confiscation of these assets would represent too great a financial risk for the Eurozone, for the European Central Bank”. Opponents of seizure worry that countries and investors could be deterred from using European financial institutions in future out of fear their own assets could be seized. They argue that this would undermine the Euro’s strength as an international currency for state reserves. There are also fears that countries like China and Saudi Arabia could sell their European bonds.Ultimately, Pasini said, one of the key obstacles for those in favour of seizure is the fact that “governments don’t want to set a precedent, especially the European Commission”.
