Russian aggression against Ukraine continues. The genocide of Ukrainians by Russia continues. The existence of a global threat presented by Russia continues. The high probability of Trump’s presidency exists. The threat of Ukraine being deprived of US aid exists. The necessity for Europe to become Ukraine’s strongest ally and manifest force to demonstrate to Russia that its crimes against humanity won’t go unpunished is obvious.
Ukraine needs the support of its European allies
In March 2022 the G7 froze around €260bn ($280bn) of the Central Bank of Russia’s reserves following the Russian invasion of Ukraine and the idea of using these assets to fund Ukraine’s reconstruction after the war began circulating. The cost of Ukrainian reconstruction varies from $500bn to $1tn.
The most significant argument that must be made in defence of such policy is evident: Europe must ensure that Russia is defeated in Ukraine and is held responsible for the genocide of Ukrainians, including providing reparations to cover all damages. The principle of international law is that Russia must make reparations for its aggression against Ukraine and other internationally wrongful acts.
Europe must demonstrate to the world that it will not tolerate violations of international law and that it is prepared to take strong measures to uphold the international rules-based order, which involves enforcing sanctions against aggressors and supporting the victims, even with the aggressors’ funds. Confiscating Russia’s assets in the conflict would possibly deter others from considering similar actions elsewhere.
Frozen Russian assets: depriving the elites
Compensation is one of the conditions outlined in the 10-point Peace Formula put forward by Volodymyr Zelensky in November 2022, and who has repeatedly argued that confiscating Russian assets from the Central Bank of Russia and those belonging to the political and business elites would be an effective tool to put pressure on the Kremlin. Russia has a hierarchical structure; there is a “tsar” at the top, whose legitimacy is based on support from elites and on the propagandist belief within the indoctrinated society that Russia is capable of winning the war in Ukraine. If the invasion loses support, then the “tsar” will lose his legitimacy.
Russia currently exists as a terrorist fascist totalitarian state, and to become a peaceful and democratic state and stop being a global threat, it must go through radical social upheaval, which will end in getting rid of Putin’s regime and Russia’s imperialist collapse. Piling pressure on the Russian elites by depriving them of their wealth can be one of the means to achieve this because it will stoke tensions between regime and elites. They must understand that they will not receive it back after Ukraine wins the war, but as these funds will be used as a form of reparations,
A safer Europe
However, it is not only the reconstruction of Ukraine that is at stake; European countries must prioritise Ukraine’s victory and Russia’s defeat. On 26 July 2024, the European Union transferred €1.5bn to Ukraine using the revenues obtained from the Russian Central Bank’s assets, 90% of which will be used to purchase weapons, ammunition and air defence systems. European Commission President Ursula von der Leyen said: “There is no better symbol or use for the Kremlin’s money than to make Ukraine and all of Europe a safer place to live.“
Ukrainian troops need weapons and everything necessary to defend Ukraine and all of Europe, and using Russian assets is one of the means to provide them, especially with the possibility of Trump’s presidency looming in the US, which threatens to cut off Ukraine’s aid. Europe must demonstrate that it is strong enough to fill in the gap.
The potential challenges
One of the challenges is another principle of international law which does not allow States to unilaterally seize and expropriate the assets of another State or its nationals for a breach of international law committed by that State because nationals and their assets, as entities that are distinct from the State, cannot be held liable for the acts of the State. However, the potential remedy is the enactment of domestic legislation by the States holding Russian frozen assets creating an exception to such jurisdictional immunity, or the conclusion of a multilateral treaty amongst the States.
Proponents have argued that countermeasures can be employed in response to clear violations of international law by a specific country, in this case Russia. Furthermore, as I recall from my studies of international economic law, national security can be invoked by the States as a valid exception to the prohibition of unilateral seizure of assets. Thus the fact that Russia presents a serious security threat to Europe means the EU has the right to implement all the measures for its protection. This justifies the sidestepping of this principle of international law. Furthermore, history will not judge the West well if it allows Ukraine’s defeat, even if it didn’t want to contravene international law.
Another challenge comes from Hungary, which is known to have a pro-Russian government, and which argues that it would risk undermining the possibility of diplomacy and negotiations with Russia. However, Russia’s main aim is to destroy Ukraine, erase Ukrainians as a nation and expand its imperialist ambitions to all of Europe. Any diplomacy and negotiations with Russia are not possible as long as it keeps attacking Ukraine, threatening Europe and remains a terrorist state run on hatred and lies. It will only serve as an appeasement to embolden Russia to continue with its crimes.
Stability
An argument against the confiscation of these deposits from the Russian Central bank is that it will destabilise the global economy and undermine confidence in the Eurozone as an investment destination. The uncertainty surrounding the durability of this revenue stream means EU members would have to provide state-backed guarantees to give investors certainty that European governments would fulfil the debt’s repayment if profits were to fall away.
However, these guarantees would impact the deficit and debt profile of member countries, which would then require the approval of national parliaments. Global economic shocks do happen, and history shows that the world can recover from them. If it occurs because of the confiscation of Russian assets, the economy will stabilise and it will be worth it to help Ukraine. Europe should not wish to be an attractive investment destination for ultra-nationalist authoritarian regimes.
Consequently, the transfer of Russian assets to Ukraine remains essential to ensure Ukraine’s victory, Europe’s security from Russian aggression and to hold Russia responsible for their crimes against Ukrainians.
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