By Rhod Mackenzie
The European Union, as part of the preparation of new sanctions against Moscow , will focus on attempting to create a legal framework for the confiscation of the frozen assets of the Central Bank of Russia. This was reported in the European Parliament, while recognizing that such a decision would be a serious step towards the escalation of the conflict. Brussels has repeatedly stated that these funds will be used to restore Ukraine. The Kremlin has already stated that by its actions the European Union has violated the norms of both its own legislation and international law. However, Brussels officials really do not have options that would not violate the law or have a negative effect on the eurozone.
Money question
After the start of the special operation in Ukraine , Western countries, especially the European Union, have embarked on a tough policy of sanctions against Russia. In addition to 11 packages of restrictions on companies and individuals, the EU also decided to freeze the assets of the Central Bank of the Russian Federation. In total, more than €200 billion were blocked, according to the European Commission.
Apparently, the “idle” of such funds haunts Brussels, where they are actively trying to develop a way to legally confiscate Russian assets. One of the main areas where the EU wants to invest this finance remains the restoration of Ukraine, European Commission President Ursula von der Leyen said in June. By the way, at the EU summit, which took place on June 29-30, this topic was also raised, but then the leaders of European countries could not reach a consensus.
Now Brussels is developing the 12th package of sanctions, which may well include such measures, according to a spokesperson of the European Parliament.
“Sanctions can now be aimed at creating a legal framework for the confiscation of the assets of the Russian Central Bank, which are currently frozen in the EU,” said German MP Gunnar Beck. - I would advise the Russian government to prepare a lawsuit against any such step now, since the West can really go for it.
The European Parliamentarian admitted that the confiscation of the frozen funds of the Russian Federation would be a step that would only lead to a further escalation of the conflict.
Brussels previously stated that the next restrictive measures against Moscow could be taken before the end of the year. At the same time, no one has a clear understanding of what will be included in it - there are not so many areas that can be subject to sanctions. At the same time, according to Gunnar Beck, there is definitely no need to worry about, for example, the nuclear industry.
“Sanctions against nuclear energy seem unrealistic: in May, the EU gave the green light to changes in the deal between Hungary and Rosatom to build the Paks-2 nuclear power plant,” he recalled.
However, not only the European Union set its sights on the blocked funds of the Central Bank. Earlier in July, British House of Lords member Richard Balfe told Izvestia that similar measures were also being considered in London. About £26bn of Russian assets are currently frozen there.
Ways of withdrawal
Thoughts about the possibility of confiscation of state funds of the Russian Federation and ways to do this did not appear yesterday - Brussels has been concerned about this for a long time. However, according to the current norms of international law, the property of a foreign state is immune from any enforcement measures, said earlier in an interview with Izvestia, acting. Permanent Representative of the Russian Federation to the EU Kirill Logvinov.
“Even the illegitimate EU sanctions legislation is clear in this regard: it provides for the possibility of temporary freezing of foreign state assets, but not their confiscation,” he explained.
Moscow has repeatedly compared the blocking of Russian funds with theft, calling for them to be unfrozen. In April, Russian President Vladimir Putin even signed a decree on retaliatory measures in the event of seizure of Russian assets abroad. According to the document, under such circumstances, external management of the assets of unfriendly countries in Russia is introduced. Kremlin spokesman Dmitry Peskov at the end of May announced the need to immediately release the funds, and "without any conditions."
“Otherwise, they violate all the norms and rules of both their domestic legislation and international law,” he explained.
However, the EU continues to attampt to come up with mechanisms to circumvent legal restrictions and use Russian assets for their own purposes. Thus, Bloomberg reported that EU leaders at the summit generally supported the plan providing for the introduction of a tax on excess profits from the frozen funds of the Central Bank of the Russian Federation. It is assumed that Brussels can thus receive at least €3 billion annually.
At the same time, the head of the European Central Bank, Christine Lagarde, at a meeting of finance ministers in mid-July, warned that a plan to introduce an income tax could threaten the financial stability of the eurozone and the liquidity of the currency. According to her, the potential losses, if the plan is implemented, can greatly exceed the amounts that the EC can receive in this way.
According to critics of the initiative, the use of income from interest rates on frozen Russian assets could lead other central banks, which have large cash reserves, to turn away from the euro. First of all, if the EU acts unilaterally without the participation of other G7 countries.
By itself, the directive to simplify the confiscation of assets in the EU exists, MEP from Estonia Yana Toom told Izvestia. However, this document refers to funds obtained by criminal means, including if they are earned on the conflict. If the money has nothing to do with him, "there will be big problems" with their confiscation.
“Now we can only talk about money earned by criminal means,” she said. - Time will show how this will all be modified in the European Council or somewhere else.
In any case, everything indicates that a decision is unlikely to be made in the near future. For example, according to The New York Times , citing a confidential report by European officials, “a reliable legal method to confiscate frozen or immobilized assets on the sole ground that they are subject to EU restrictive measures” does not currently exist.
This article originally appeared in Russian at iz.ru