An attempt to circumvent sanctions will be declared a criminal offense in the EU, which will pave the way for the confiscation of stolen goods from Russia
I already wrote that a few days after the start of the sanctions war against Russia, there were calls to confiscate any Russian assets that were within the reach of the collective West. So far, everything has been limited to blocking (arrests) of assets of Russian origin.
At the end of June, the US Treasury reported for itself and for its allies that it blocked $330 billion in assets during the 100 days of the sanctions war. Of these, 300 billion dollars are the assets of the Central Bank of Russia, the rest are owned by individuals and companies. On July 1, Bloomberg reported that the European Union had blocked some 14 billion euros belonging to Russian individuals who were under sanctions.
The authorities of the United States, Great Britain, and the EU have so far been in no hurry with expropriation. There was no necessary legal basis for such an action. The principle of “property is sacred” is respected. To carry out expropriations, it is necessary to do a lot of work to change the current legislation. In addition, the expropriation of Russian assets could bring down the post-World War II international financial system.
In early July, an international conference dedicated to the restoration of Ukraine was held in the Swiss city of Lugano. Most of the participants were in favor of the confiscation of Russian assets and their sale to form a fund for the restoration of Ukraine. In their opinion, the value of such a fund could reach $500 billion. The only participant who did not support this idea was Swiss President Ignazio Cassis. The Guardian quoted the Swiss president as saying:
“Property is a fundamental right, a human right. You must ensure the protection of citizens from the power of the state. This is what we call liberal democracy.”
The Swiss Bankers’ Association reported in March that Russian citizens had about 150-200 billion Swiss francs in their accounts. However, the President of Switzerland and a number of high-ranking officials of the country resist such a step, since it can completely destroy the status of the Alpine republic as a safe banking haven for other countries.
However, the fervor of most Western expropriators overshadows reasonable fears. Prime Minister of Ukraine Denys Shmyhal spoke at the conference in Lugano. According to him, the volume of Russian assets frozen around the world ranges from $300 billion to $500 billion.
“We propose to find a formula for creating national and international legislation for the possibility of confiscation of frozen assets in the event of unprovoked aggression, which will be the norm,” Shmyhal said. Most of the conference participants supported him.
Experts do not rule out that the first confiscation of Russian assets may begin this summer. Canada is ahead.
At the end of June, the Canadian Senate approved a bill allowing the confiscation of previously frozen Russian assets. If the document adopted by Parliament is approved by the Governor-General, movable and immovable property, bank accounts, and cryptocurrency will fall under the new law. The final decision on any given forfeiture will be made by the Supreme Court of Canada, which will determine whether the property is actually owned, held or controlled “directly or indirectly” by the person, organization or state that is under sanctions.
The text of the bill states that seized assets can be used to “restore a foreign state that has suffered as a result of a gross violation of international peace and security”; to “restore international peace and security” and to compensate the victims. Ukraine is hidden behind these formulations.
So the precedent has been set. It clears the way for similar solutions in other Western countries.
On July 3, The Guardian, citing British Foreign Secretary Liz Truss, reported that the UK was considering confiscating sanctioned Russian assets for transfer to Ukraine.
“I support this idea. We are studying this issue. In Canada, a corresponding law has been passed. We are working on this together with the Ministry of Internal Affairs and the Ministry of Finance. You just need to study the specifics of this issue well”, said Liz Truss.
Director of the Department of Economic Cooperation of the Russian Foreign Ministry Dmitry Birichevsky commented on July 4 as follows:
“We perceive such actions by a number of countries as an encroachment on sovereign property. The refusal of the West to cooperate in the legal field creates an extremely dangerous precedent for all participants in the modern global financial architecture, showing the inability to guarantee the sovereign status of state assets, regardless of geopolitical realities.”
On July 12, the media, referring to the statement of the European Commissioner for Justice, Didier Reynders, reported that the European Union was preparing to adopt a directive allowing the confiscation of Russian assets in member countries of the Union in case of circumvention of sanctions. According to Didier Reynders, the European Commission has already received the consent of the Parliament, the final decision will be made in October. An attempt to circumvent sanctions will be declared a criminal offense in the EU, which will pave the way for the confiscation of Russian assets:
“Thus, it will be possible for all EU states to carry out a judicial procedure and confiscation. The European official emphasized the targeted nature of the planned expropriations: “The funds [obtained from the confiscation] will go to a common fund for the Ukrainian people.”
And here is the latest news from Riga. Last week, Ministers of Justice of Latvia and Ukraine Janis Bordans and Denis Malyuska met there. The Ukrainian minister noted that the main obstacle to the confiscation of Russia’s gold and foreign exchange reserves stored abroad was the principle of state property immunity.
“After extensive work with leading international lawyers, we have found a way to overcome this limitation through the conclusion of an appropriate multilateral agreement or a series of bilateral agreements. I am grateful to friendly Latvia for its readiness to become the first state with which we are starting to develop such an agreement,” said Denis Malyuska. “Ukraine and Latvia are starting work on an agreement on the confiscation of Russian state property abroad,” the press service of the Ukrainian Ministry of Justice reported on July 15.
I have given only some examples of the impending expropriation of Russian assets. It is impossible to assess its consequences only by the amount of money and property stolen from Russia. The consequences will be worldwide. The collapse of the capitalist system that has existed for several centuries is approaching. The expropriation of Russian assets is part of a global upheaval called by Klaus Schwab the “Great Reset”.
Valentin Katasonov, FSK
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