Europe and the difficult decision to confiscate Russian assets
If the idea of resorting to frozen Russian assets to finance Ukraine is confirmed, following US President Donald Trump's decision to withdraw economic and military support for the Zelensky government, Europe's plans could violate the principle of international legal immunity of assets.
The debate has arisen as a result of the growing increase in European bureaucracy and the statements made by the President of the European Central Bank (ECB), Christine Lagarde, who insisted that the decision to use the frozen funds does not correspond to the ECB, but to the leaders of the countries that make up the European Union.
Currently the assets frozen by the European Union exceed 300,000 million dollars, which would mean 50,000 million more than the 250,000 million that the Ukrainian president has requested from the European bloc in order to be able to continue financing the war with Russia.
Lagarde insisted that such a risky decision could weaken the European financial system and affect the euro as a reserve currency since, according to the bank's own data, global reserves in euros have decreased by 5.8% since 2010 as a result of the rise of other currencies and the dollar, which stands at 58.4%.
However, this decision, which has been used more than once throughout history, particularly in the last century, is fraught with legal and diplomatic risks.
Historical cases: Iraq, Cuba and the Soviet Union
The confiscation of goods and assets is a practice that has been repeated over the years as a repressive measure in various conflicts, ever since the Soviet Union confiscated the gold of the Central Bank of Romania in 1918.
One of the best known examples was the confiscation of Iraqi assets after the US invasion in 2003, when George W. Bush, the US president at the time, confiscated more than 1.7 billion dollars, under the umbrella that Saddam Hussein's regime did not legally represent the Iraqi people, despite the fact that it generated controversy regarding the violation of international law and Iraq's financial sovereignty.
On the other hand, in the Soviet case, the assets could be recovered after negotiations. However, this act set a precedent that the confiscation of assets can lead to a worsening of relations between different countries, generating instability and confrontations that can last for long periods of time.
In the current context, the possible confiscation of Russian assets by Europe faces similar challenges, as Moscow could resort to protracted disputes that could become deadlocked and generate problems in the global financial system.
Finally, the other significant case occurred in 1996 with the US confiscation of Cuban funds, which were used to compensate the relatives of three citizens who were killed by the Cuban army after shooting down the planes they were travelling in.
This measure was taken on the basis of the Helms-Burton Act, which toughened economic sanctions against the Cuban regime. It was this law that allowed Washington to freeze Cuban assets. A highly controversial decision, it raised doubts and uncertainties in US banks and reinforced the idea that confiscations could be used as a means of repression.
Principle of legal immunity of assets
The use of assets confiscated from other countries throughout history and mainly in the last century has always been a difficult challenge. According to the principle of jurisdictional immunity of states and their assets, the violation of this principle implies the violation of one of the most important principles of the 2004 Charter of the United Nations, considered one of the basic principles of the international legal order
A study published by Roscongress in 2023 establishes that, in the absence of clear jurisdiction regarding the use of frozen assets to other countries, it could be established that the legal consequences fall under the national jurisdiction of each country that has imposed such sanctions. As a result, Russia could appeal decisions regarding its frozen reserves with potentially unclear outcomes, according to Roscongress.
Not only could Russia make a claim, but Europe would also have serious problems, as financial institutions and private investors, who manage part of these funds, could file lawsuits to avoid confiscation, arguing that their role is to protect the interests of their clients while respecting the international rule of law.
And even if the countries of the European Union manage to pass a joint law that serves to justify the measure of confiscation of Russian assets, these could be challenged and delayed if any kind of banking movement to Ukraine were to take place.
All these drawbacks are raising doubts about the viability of the legality of the process and uncertainty about making a firm decision that could end up with a stalemate in the conflict.