Andrius Kubilius. Countermeasures: An Effective Way Towards Using Frozen Russian Assets For Ukraine’s Reconstruction

2023-11-19 | Political initiatives, Asset confiscation

Seizing and allocating all the frozen Russian assets for the reconstruction of Ukraine faces various challenges.

From the fiscal point of view many fear that such a move would pose a risk for the stability of main reserve currencies: US Dollar and Euro.

From the legal point of view, there are diverging views regarding the applicable rules and procedures, and their legal consequences, based on the presumption that seizing assets will violate international legal immunity of the state property.

However, experts have presented many counterarguments and solutions to above-mentioned challenges.

Nevertheless, for time being the main track chosen by the European Union to follow is through the windfall revenues, a procedure described below, which will allow to use for reconstruction of Ukraine annually  only a small amount of financial resources, generated by windfall taxes on frozen assets.

Another option, considered  by the US Congress and experts as well as by some other countries, is to use countermeasures, a political rather than legal instrument, which would create conditions to use all the frozen assets for the reconstruction.

Main arguments of both sides are taken from several analyses recently published by prominent lawyers, economists, as well as from official documents are presented in a non-paper “Countermeasures: An Effective Way Towards Using Frozen Russian Assets For Ukraine’s Reconstruction”.

Based on the non-paper a draft European Parliament resolution on compensating Ukraine for damages caused by the Russian military aggression was also submitted.