The Russian oligarchs and the Russian state itself are exposed to losing ownership of assets that have been frozen in the European Union and in the US as a result of international sanctions for the invasion of Ukraine. Brussels has launched an offensive at the highest level so that the national authorities proceed to confiscate the blocked assets with a view to obtaining funds to finance the reconstruction of the invaded country. The measure targets mansions, land or yachts but, above all, the more than 300,000 million euros in Bank of Russia accounts in Western financial institutions. That swag of peace it would be used, according to the European proposal, to compensate for the enormous economic losses caused by the Russian army on Ukrainian territory.
The initiative has been launched by MEPs from the main groups in the European Parliament (popular, socialists, liberals, greens and ultra-conservatives), who have called on the European Commission to urgently approve “a legislative project to have a clear framework that allows reuse the Putin Treasury in the protection and reconstruction of Ukraine”. And this Monday, the High Representative for Foreign Policy of the EU, Josep Borrell, has picked up the gauntlet thrown by the MEPs. “We have the money in our pockets and someone will have to explain to me why it can be done with Afghan money and not with Russian money,” said the head of community diplomacy in an interview published by Financial Times. Borrell notes: “One of the most important questions on the table is who is going to pay for the reconstruction of Ukraine.”
The EU sanctions list already includes more than 1,100 Russian personalities, including senior Kremlin officials, parliamentarians, military officers and oligarchs linked to Russian President Vladimir Putin. All of them are subject to a freeze of the movable and immovable property they own in any country of the Union.
The EU and the US have also agreed to freeze the reserves that the Bank of Russia surprisingly kept on deposit in European and US banks despite repeated warnings from the West about massive sanctions in the event of an invasion of Ukraine. . It is estimated that Moscow has lost control over some 300,000 million euros, half of its reserves.
The sanctions, in principle, only prevent the owners from disposing of their assets on community land, but they continue to belong to them and could well recover them when the punishment is withdrawn or if they manage to get the European court of justice, to which those sanctioned usually resort, annul their inclusion in the list. An expropriation would definitively deprive them of their property, which would pass, according to the European proposal, into the hands of the State where the assets are located. And once those assets are liquidated, the proceeds would go to help Ukraine repair the damages suffered.
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The signatories of the plan, led by the Spanish MEP, Domènec Ruiz-Devesa, from the socialist group, point out that, according to kyiv’s calculations, the invasion has caused damage worth more than 550,000 million dollars (521,000 million euros) since on February 24. “The unjustified Russian invasion has devastated Ukraine’s physical infrastructure as well as its production capacity,” the MEPs point out in a letter sent to the High Representative, Josep Borrell, in which they request the legal framework for the confiscation of assets. “Schools, hospitals, museums and cultural heritage have disappeared and with it the basis of Ukraine’s social infrastructure,” the letter lists.
The European Union, according to the letter, also faces its own bill. Assistance to the more than five million Ukrainians who have taken refuge in the EU to save themselves from Putin’s bombings will require some 40,000 million euros, according to calculations by the Bruegel study center cited by the Ruiz-Devesas and the rest. of signers.
European Council President Charles Michel already floated the idea of the confiscation last Thursday, the same day an international donor conference organized in Warsaw raised more than 6 billion euros for Ukraine. Another similar conference held in April added 9.1 billion euros. These figures are much lower than Ukraine’s vital needs, both during the war period (it needs about 5,000 million euros per month for current state spending such as salaries and pensions) and in a post-war period, whose bill is estimated at hundreds of thousands of millions of euros.
“I am absolutely convinced that it is extremely important not only to freeze assets [rusos] but also to make confiscation possible so that they are available to rebuild the country,” Michel said in an interview with the Ukrainian news agency Interfax. Borrell supported the proposal and recalled that the US has already expropriated assets from Afghanistan to finance humanitarian aid to that country and compensation for the victims of the 9/11 terrorist attacks.