The EU could invest frozen Russian assets according to proposals being discussed by European officials in Brussels.
The assets, which were frozen as part of the Western sanctions package against Russia, would primarily be used for reconstruction purposes in Ukraine. Proposals to use the assets were first made three months ago. On Thursday, EU officials again met to discuss the feasibility of doing so.
The proposition has received strong support from Poland and the Baltics but could face complicated legal challenges. Finding the exact location of the assets would not be a straightforward task, nor would be using them in a clear-cut legal manner.
Calls to use frozen Russian assets
On Thursday, EU officials met in Brussels for an extraordinary summit, where the possibility of using frozen Russian assets was discussed. Approximately $300 billion worth of Russian reserves held in international banks has been frozen by Western allies since sanctions were brought to bear against Moscow.
At the conclusion of the summit, EU leaders agreed to work “towards the use of Russia’s frozen and immobilized assets to support Ukraine’s reconstruction and for the purpose of reparation, in accordance with international law.”
Just prior to the summit, Poland, Lithuania, Latvia, and Estonia sent a joint letter addressed to European Council President Charles Michel, European Commission President Ursula von der Leyen, and Sweden’s Prime Minister Ulf Kristersson, calling on the EU to accelerate action towards using the frozen Russian assets.
“Those frozen assets must be used as soon as possible; we cannot wait until the war is over and a peace agreement is signed,” the letter urged, according to EURACTIV.
The Estonian Prime Minister Kaja Kallas who was in attendance in Brussels, called for “a European solution to proceed with the use of frozen assets”. She said that the measure was necessary “because Ukraine has a claim towards Russia to repair what they have caused all the damages in Ukraine.”
The EU’s plan would be to invest the frozen assets and use only the profits for reconstruction purposes in war-torn Ukraine.
The EU faces several legal and practical challenges which could make use of the frozen Russian assets for reconstruction and operations difficult.
“Legally in a sanction regime, you must be able to give that money back when the sanction regime is suspended so you cannot spend it and then find yourself without the money. You can’t do that so you need to cover (the frozen amount),” one EU official told Euronews.
According to Evan Criddle, a Professor of Law at the William & Mary Law School in the US who also spoke to Euronews, the use of frozen assets would be “deeply problematic under international law.”
Another issue would be locating the assets which are spread across a multitude of different European and international banks and exchanges. According to a report by Bloomberg, about 86 percent of the assets remain unfound.