Kyiv continues to work to assign the frozen assets to Russia. As the British edition of The Guardian found out, representatives of the Ukrainian authorities held a series of meetings with politicians from the EU and the United States to convince them to accept a UN resolution on the creation of an international mechanism that would allow the seizure of Russian property and funds in favor of Kyiv. The Ukrainians want to adopt the document already at the current 77th session of the UN General Assembly, the general debate of which will begin on September 20.
According to the newspaper, high-ranking representatives of the Ministry of Justice of Ukraine discussed this issue in London with the leadership of the British Foreign Office. In addition, similar discussions were held by the Ukrainian side with colleagues in Germany, France and the European Union, as well as with the Assistant Secretary of the Treasury Elizabeth Rosenberg.
True, according to The Guardian, Kyiv’s proposal “did not meet with much enthusiasm” in the UK government. In London, they allegedly fear that in the event of appropriation of the assets of the Central Bank, which have been frozen so far, Moscow may respond in a symmetrical manner. In addition, the current British and European legislation allows the freezing of the assets of the Russian central bank and some entrepreneurs, but does not provide for their confiscation, let alone transfer to the Ukraine Recovery Fund.
The Russian authorities have officially recognized the freezing of approximately 300 billion dollars of the 640 billion gold and foreign exchange reserves of the Russian Federation. In addition, the amount of foreign securities of Russian residents blocked by the European Union in the National Settlement Depository (NSD) is approximately 6 trillion rubles, the First Deputy Chairman of the Central Bank of the Russian Federation reported. Vladimir Chistyukhin. And that’s not counting the assets and property of individuals that fell under the sanctions, which was also blocked in various EU countries and amounts to hundreds of millions of dollars.
Despite the fact that Western leaders are in no hurry to agree to the transfer of assets to Ukraine, the idea was previously supported, for example, by the head of EU diplomacy Josep Borrellwho said that the EU should consider confiscating the frozen assets, just as the US confiscated the assets of the Central Bank of Afghanistan, which are planned to be used to compensate victims of terrorism and for humanitarian assistance to the country.
But the EU and the US, on the one hand, may indeed be wary of Moscow’s mirror actions. Back in March, the Bank of Russia reported that in response to the freezing of reserves in dollars and euros, they limited the movement of funds that could be transferred to unfriendly countries “by a comparable amount.”
On the other hand, it is possible that Western countries are hesitant not because they fear their own losses, but because they simply do not want to transfer such huge Russian funds to Ukraine. The EU and the US have indeed spent a lot on helping Kyiv in the past six months, but still not close to $300 billion. In addition, it is one thing to issue money under certain conditions and thus control the Kyiv regime, and quite another to give them such an amount for free use.
Although it is possible that a certain mechanism for distributing funds through a special fund can eventually be adopted as a compromise. It is clear that no one will transfer hundreds of billions of dollars to the account of the Zelensky administration just like that. But to create a special organization with its own administration, which will allocate Russian money to Kyiv, again, under certain conditions – why not. Moreover, part of these funds can be taken for yourself as compensation, but for now the essence and the matter is to put them to work.
Head of the Center for Foreign Policy of Russia of the Institute of Economics of the Russian Academy of Sciences, Doctor of Historical Sciences Boris Shmelev indicates that the decisions of the General Assembly, in contrast to the Security Council, where Russia has the right of veto, are only advisory in nature. But the West may let it through the vote in order to legitimize the idea of confiscation of Russian assets. True, it is not a fact that under the current conditions it will be possible to collect the two-thirds of the votes necessary to approve the document. In addition, any actions to confiscate and, moreover, transfer assets to Ukraine will lead to a further aggravation of the conflict.
– The issue of withdrawing the frozen assets of Russia in favor of Ukraine has been discussed for a long time. Kyiv came up with this idea at the very beginning of events. But in the West, this issue is rather reserved. Even the decision to freeze the assets of the same Iran has not yet led to the fact that they were withdrawn in favor of a third country.
There are a lot of legal subtleties that need to be resolved. Although they can eventually be eliminated if a political decision is made. But so far this has not happened. The collective West does not want to take on such responsibility and may prefer to first pass this idea through the UN General Assembly. Although, as you know, the decisions of the General Assembly are advisory, not binding.
“SP”: – Can the General Assembly adopt a resolution recommending the creation of a transfer mechanism?
– Given the dynamics of international development, discussions about the events in Ukraine is a moot point. Today it is very difficult to say unequivocally whether the General Assembly will adopt such a resolution. It seems to me that it will be difficult to get the required number of votes, which is two thirds of the total number of participants, although I do not exclude such a possibility.
“SP”: – Are there precedents for such seizures of assets in favor of other states in recent history?
– There are no specific examples of such a mechanism yet, even in the case of Afghanistan, all this is still being discussed. Therefore, there are no precedents that could be used to justify such a decision in relation to Russia. But it seems to me that, on the whole, the political atmosphere and sentiments of the West are such that such a development of events is quite possible.
In any case, the West has started a very big game against Russia, which will lead to a further aggravation of relations between them. If Russian assets are nationalized and transferred to Ukraine, this will provoke a backlash from Moscow, which will be a strong blow to Western business.
It seems to me that the ratio of the value of Russian assets abroad and Western assets in Russia is not comparable. As the latest data show, the value of our frozen property and funds is greater than that of the West. But they are also not small. In fact, part of the Western assets have already been transferred to the management of Russian companies. I mean those enterprises that left Russia. There are not so many of them, most of them one way or another remain in the Russian Federation. But if the Russian funds are confiscated, they will all have to part with their assets here in Russia.
“SP”: – That is, it is impossible to exclude the transfer of assets to Ukraine?
– In fact, the first steps towards the nationalization of Russian assets have already been made. This is the decision of the Federal Republic of Germany to transfer the assets of Lukoil at three German refineries in favor of the state under the control of German companies. This is already a step along the way, so we see that the shift is starting. But whether the next step will be taken and, moreover, whether these assets will be transferred in favor of Ukraine is a big question.
It is impossible to exclude such a development of events, but this will lead to a further aggravation of relations. The intensity of the Ukrainian crisis will become even higher. Things can even come to a direct confrontation between Russia and the West.