Risks of inaction: Why seizing Russian frozen assets is urgent

On May 19, 2023, the G7 agreed in a statement that “Russia’s sovereign assets in our juris­dic­tions will remain immobi­lized until Russia pays for the damage it has caused to Ukraine.”  Whilst it is unclear whether the US intends to honor that commitment, Russia’s destruction of Ukraine grows daily. The total damage—conservatively estimated in February 2025 by the World Bank at $524 billion—already far exceeds the immobi­lized reserves, and will continue to rise.

Throughout the past several months, more and more voices called for European nations to transfer the immobi­lized assets to a fund for Ukraine. This would help meet Ukraine’s urgent human­i­tarian and recon­struction needs, strengthen its capacity to resist Russian aggression, ease some of the burden on Western taxpayers and help to make Europe more secure and bring at least partial justice to Ukraine. This is vital also for any peace negoti­a­tions as any sustainable peace must have justice and account­ability at its core.

Will Russia’s assets make a difference for Ukraine?

Most of Russia’s $300 billion sits in accounts with Belgium’s securities depos­itory Euroclear and corre­spondent banks. However, different countries have claims to this money. Seven percent of this sum is denom­i­nated in U.S. dollars and, hence, falls under U.S. juris­diction. Eight percent of the total is in Canadian dollars, 16 percent in British pounds, and 2 percent in Australian dollars. Europe’s share is the remaining 65 percent denom­i­nated in Euros.

To put this sum in perspective, total global aid packages for Ukraine in the first two years of the full-scale war amounted to about $380 billion. The American share amounts to about $110 billion. European Union insti­tu­tions have provided about $91 billion in direct assis­tance, with Germany footing about $24 billion of its own as the second-largest individual contributor to Ukraine overall.

In short, $300 billion in frozen Russian assets has signif­icant game-changing potential for Ukraine. This comes at a time when the U.S. has cut off its support to Ukraine, leaving the respon­si­bility on Europe to protect Ukraine, and itself.

Why haven’t western leaders just seized these assets?

The political and strategic case for seizing Russian state assets is clear. Doing so would throw Ukraine an invaluable lifeline and increase the likelihood of its victory. It would also shield Ukraine from any decisions of the U.S. that undercut its ability to defend itself from Russian aggression.

Most impor­tantly, it would set up a new strategic deterrent. Other countries thinking of invading their neighbors would have to reckon with their assets being seized if they did so. The world’s author­i­tarians would get a loud message: “If you attack your neighbor, you will pay.” Making aggression more expensive ultimately makes it less likely.

The EU’s Foreign Affairs Chief Kaja Kallas, Estonian Foreign Minister Margus Tsakha, Polish Prime Minister Donald Tusk, and other current and former officials have publicly voiced their support. Meanwhile, France, Germany and other eurozone countries, including Belgium where Euroclear is based, remain opposed to seizing all $300 billion in Russian state assets. The reasons for their opposition are largely political, yet they employ both legal and economic arguments to justify their opposition.

Is seizing Russian assets legal?

Yes. Leading inter­na­tional lawyers have confirmed that trans­ferring Russian assets to a fund for Ukraine would be lawful, including in an EU-commis­sioned study by Professor Philippa Webb and a memorandum co-signed by 11 of the world’s top inter­na­tional lawyers, such as a member of the UN’s Inter­na­tional Law Commission.

The basic principle is that a country only benefits from non-inter­ference with its property rights when it abides by inter­na­tional law. Practi­cally every inter­na­tional body acknowl­edges that Russia has violated the funda­mental corner­stone of inter­na­tional law by waging an unpro­voked war of aggression against Ukraine. An aggressive and genocidal repeat offender cannot and should not enjoy the same non-inter­ference benefits as other law-abiding countries. It’s also not disputed that under inter­na­tional law, Russia owes repara­tions for the damages it caused.

When a country’s misconduct is so egregious that it violates the very core norms of inter­na­tional law, it’s considered to affect the entire global community. Effec­tively, any country has now the right, arguably even the duty, to take counter­mea­sures to bring the recal­ci­trant country back into compliance with the inter­na­tional norms it is violating. By trans­ferring assets to an inter­na­tional compen­sation fund, partic­i­pating countries would cause Russia to comply with its oblig­ation to make repara­tions to Ukraine.

What about Russia’s sovereign immunity that allegedly supposed to protect the country’s assets? Sovereign immunity is a concept that prevents the national courts of one country from sitting in judgment of the govern­mental acts of another country, or from executing upon the other country’s assets. Without court action, state immunity does not come into play. The counter­mea­sures would be adopted and imple­mented strictly by the executive branch of government, by legis­lation, or by cabinet decisions in parlia­mentary systems. They would be acts of state which are not ordinarily regarded as justiciable.

Despite this, some govern­ments – for instance, that of Germany – have pleaded legal uncer­tainty as an excuse for inaction. In reality, such a transfer would not only strengthen inter­na­tional law by enforcing Russia’s oblig­ation to pay repara­tions, but also alleviate the financial burdens of Ukraine’s reconstruction.

What must happen now?

Any need for analysis has largely been met. Any claim that further answers must be sought should be seen for what it is: stalling, and simple political cowardice. At the very least, Europe must forestall the return “by default” of the assets to Russia in case politi­cians fail to decide anything. In the EU, that means these countries must act to maintain their national sanctions over the Russian state’s cash held via Euroclear, independent of the EU sanctions regime, in the event that it lapses.

The best way forward is to work with urgency on the transfer of Russian state assets to a compen­sation fund for Ukraine – the only foolproof way to secure them against a return to Russia. This will ensure repara­tions to Ukraine and contribute to the costs of recon­struction that otherwise the EU will likely have to bear. The time has come to make political choices — before it is too late.