A Blog by Jonathan Low


May 28, 2023

The Case For Giving Ukraine $300 Billion In Frozen Russian Assets

There is no legal objection under international law to confiscating the frozen assets. Doing so would help pay for most of Ukraine's reconstruction - and would send a clear message to Russia or other totalitarian regimes thinking they could try something similar. JL

Casey Michel reports in The Atlantic:

In the eyes of international law, Russian assets aren’t inviolate. The only obstacles to seizing them are debates surrounding domestic laws. “Political circumspection, rather than legal constraints, are the last defense against [the assets’] confiscation.” Russia’s war has inflicted $400 billion in rebuilding costs. A solution that would cover most of Ukraine’s costs and help deter future aggression from Russia: Western governments froze $300 billion in assets from Russia’s central bank. They could seize the funds and give them to Ukraine. Confiscating the Russian funds would serve a crucial role in ending the fighting,  and ensuring an economic future for Ukraine, sending a clear threat to regimes willing to breach international law for their own gain.

For months, the West has fretted over the prospect of paying for Ukraine’s reconstruction. Russia’s war has inflicted an estimated $400 billion in rebuilding costs, a tally that rises every day. Western leaders, already alarmed by inflation and the threat of recession, have understandably blanched over the bill.

But many of them are disregarding a solution that would cover most of Ukraine’s costs and help deter future aggression not only from Russia but from dictatorships around the world. A year ago, Western governments froze some $300 billion in state assets from Russia’s central bank. Now they could seize the funds and give them to Ukraine.

The biggest question is whether this would be legal. As critics have noted, a seizure of this magnitude has never been attempted. Moreover, little precedent exists for the United States to confiscate the assets of a nation with whom (despite the Kremlin’s claims to the contrary) it isn’t at war.

But Russia has unleashed a kind of rank imperialism the world has rarely seen since the Cold War, committing war crimes and—as manifold evidence suggests—genocide, all against a harmless neighbor. Because of its unjustifiable aggression and atrocities, Moscow has forfeited any moral right to funds stashed abroad.

The reasons to seize them are legion. Confiscating the Russian funds—which are spread across various Western economies—would serve a crucial role in ending the fighting, beating back Russian imperialism, and ensuring a viable economic future for Ukraine. And it would send a clear threat to regimes that might otherwise be willing to breach international law and destabilize continents for their own gain, as Moscow has.

Seizing these assets would also help fix an overlooked issue facing Ukraine: investor hesitancy. Investors remain wary of bankrolling projects that could be targeted by Russian drones and artillery. But the frozen funds could cover nearly 75 percent of Ukraine’s costs and significantly reduce the burden on potential financiers, making the country a more appealing investment destination.


In the U.S., much of the legal debate has focused on the International Emergency Economic Powers Act (IEEPA), a 1977 law that defines the president’s abilities to regulate international commerce during national emergencies. Although the IEEPA has historically been used to authorize more conventional sanctions—including in Iran, the Central African Republic, and China—some scholars have argued that it could also be used to seize the tens of billions of dollars in Russian assets currently in U.S. reserves.

That proposal has generated legal pushback, although advocates are undeterred. The nonprofit Renew Democracy Initiative told me that it plans to examine the “legal foundations for seizing frozen Russian assets and transferring them to Ukraine” and expects to publish its findings in the coming months. (The initiative is chaired by Garry Kasparov, who also chairs the Human Rights Foundation, where I direct a program on combating kleptocracy.)

Even if U.S. law offered clear justification, though, it couldn’t be used to touch any of Russia’s assets frozen in Europe, which are far more valuable than those in the U.S. Fortunately, international law appears to offer such justification.

As Philip Zelikow and Simon Johnson wrote in Foreign Affairs last year, Russia’s obvious culpability for the war entitles Ukraine to claim compensation from Russia. Because “the Russian invasion of Ukraine is a wrongful, unprovoked war of aggression that violates the United Nations Charter,” Zelikow and Johnson argue, any state (not just Ukraine) can “invoke Russia’s responsibility to compensate Ukraine, and they can take countermeasures against Moscow—including transferring its frozen foreign assets to ensure Ukraine gets paid.”

Despite many policy makers’ impression that Russian assets are untouchable, Anton Moiseienko, an international-law expert at the Australian National University, recently showed that they aren’t immune from seizure. “To extend protection from any governmental interferences to central bank assets would equate to affording them inviolability,” Moiseienko wrote, which is reserved only for property belonging to foreign diplomatic missions. The protection afforded central-bank assets “is not as absolute as is often thought.”


That is, in the eyes of international law, Russian assets aren’t inviolate. In fact, the only real remaining obstacles to seizing them are debates surrounding domestic laws and domestic politics. As Moiseienko wrote, “Political and economic circumspection, rather than legal constraints, are the last defense against [the assets’] confiscation.”

This is particularly true in the U.S., where plenty of hesitancy remains even after more than a year of war. As The New York Times reported in March, Treasury Secretary Janet Yellen believes that seizing Russian assets could reduce faith in the American economy and the U.S. dollar. Other critics think it would threaten U.S. assets and investments in other countries.

These points all have a certain merit. And so, too, do concerns about such a move prompting the Kremlin to escalate. In all likelihood, though, Putin’s regime has already written off these funds, not least because they’ll almost certainly never be returned while he’s in power. Moreover, seizing them is hardly as escalatory as, say, the West sending Ukraine F-16s or long-range precision rockets.


But at a broader level, these criticisms misunderstand the significance of the war and what it may lead to.

Vladimir Putin’s invasion of Ukraine is an assault on the geopolitical order. A nuclear power launched a militarized annexation, entirely unprovoked, against a neighbor that had long ago given up its arsenal. In the months following the invasion, the Kremlin has been accused of torture, beheadings, and manifold crimes against humanity. And it has been responsible for more bloodshed than any conflict in Europe has exacted since World War II. It is led by a dictator wanted for arrest by the International Criminal Court, and who is driven solely by a deranged, messianic imperialism. And it is setting a precedent for other autocrats, who are eager to see whether Putin’s revanchism will work—and eager to emulate any success he finds, especially if his crimes go unpunished.

If this war doesn’t justify seizing a nation’s assets, I’m not sure what would. Repairing the damage it has caused is well worth the risks that have occupied Washington.

Some Western leaders still hold out hope for a negotiated peace and argue that we should keep Russia’s assets frozen to be used later as a bargaining chip. But Putin cannot be negotiated with. And given the alternative—that these funds remain frozen in perpetuity as Russian munitions continue demolishing Ukrainian cities—the argument against seizing these assets gets weaker by the day.

The unprecedented nature of Putin’s crimes, the allowances of international law, and Ukraine’s growing need all point in one, clear direction. Russia’s frozen assets are not spoils of war; they are rightfully Ukraine’s. It’s time for the Biden administration and the rest of the West to put them to use.


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