Using frozen Russian assets to rebuild Ukraine

2023-05-23 19:47:15, Kosova & Bota CNA

Using frozen Russian assets to rebuild Ukraine

Illustrative photo

When Russia launched its aggression on Ukraine more than a year ago, the European Union launched swift procedures to punish Moscow, freezing Russian assets abroad. As war-torn Ukraine continues its battle against the Russian occupier, the question is what can be done with the frozen sums of money.

According to European Union officials, at least $24 billion of the private wealth of Russian oligarchs in the EU has been frozen since the start of the war.

The EU is currently looking to find legal ways to use these funds to help finance the reconstruction of Ukraine.

"The numbers are increasing. In some cases small drops may be seen because assets are unlocked if mistakes are made, or for other reasons. But in general we are seeing a steady increase since last year, when this operation started", Christian Wigand, spokesperson for the European Commission, tells VOA.

Individual countries such as Estonia are seeking to use their own laws to transfer frozen Russian assets to Ukraine.

The European Union has laws that allow the seizure of frozen assets of individuals and entities if a court determines they were obtained illegally, which usually requires a criminal sentence, although the bloc is trying to update the laws.

"The European Commission has presented a proposal to make it a criminal offense to avoid sanctions. In the future, if someone tries to circumvent sanctions, or move sums of money, perhaps by passing them on to relatives, this would be considered a criminal offense in the EU and would therefore enable the confiscation of such assets," says Christian Wigand, spokesman for European Commission.

But changing laws is a slow process. The proposal must be submitted to the European Commission and approved by the European Parliament and the European Council, which means that the law will probably not be approved until at least the autumn.

Another question is what to do with frozen Russian state assets. According to the EU, around two-thirds of the Russian Central Bank's $300 billion in reserves frozen in G7 countries, the EU and Australia are currently being held in the European Union.

In February, the Swedish prime minister said that in principle, it would be right to use these funds to help finance the reconstruction of Ukraine. Sweden holds the presidency of the EU Council until June.

But there are concerns that using the funds to rebuild Ukraine could set a dangerous precedent. The Voice of America spoke with Mrs. Olena Pavlenko, president of the Ukrainian institute "DiXi Group"

"At the international level, every country is afraid that the same thing can happen to its money. But there is a solution, the creation of a special court in the EU. The decision of the court, not for every country, but for this war, would offer the possibility of arguments, for governments to block Russian money".

While there is still no special court, the EU is considering ways to invest frozen Russian state funds to help Ukraine. A possible proposal is to transfer the acquired interests to Ukraine./ VOA