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Legal Considerations: Frozen Russian Assets to Support Ukraine

Updated: May 29



Since Russia’s invasion of Ukraine in February 2022, the international community has responded with economic sanctions aimed at holding the Kremlin accountable and providing compensation to Ukraine. Among these measures, freezing Russian assets has been a significant step.

 

The G7 and its allies froze approximately $300 billion of Russian assets shortly after the invasion. These assets include major currencies and government bonds, primarily held in European-based depositories. The question arises: Can these frozen assets be legally used to support Ukraine?

 

Several legal avenues exist for overcoming Russia’s immunity from enforcement and potentially using these assets for Ukraine’s benefit:

 

Avoidance of Immunity through Executive or Legislative Action: Some argue that immunity can be avoided through purely executive or legislative action. However, this approach may face challenges in terms of international law.


Countermeasures: Another option is to justify the breach of international law as a countermeasure. If the G7 considers Russia’s actions as aggression, it could use countermeasures to enforce judgments against Russian assets.


Evolution of International Law: International law could evolve to lift immunity from enforcement upon a finding of aggression by a United Nations principal organ. However, this would require significant consensus.


Exception for Enforcement of International Judgments: An exception in international law could allow for the enforcement of international judgments against Russia.

 

Several proposals are currently under review:

 

Enforcement of European Court of Human Rights Judgments: This approach would rely on existing judgments against Russia.


International Treaty for Compensation Commission: Establishing a treaty-based compensation commission.


Taxing Windfall Contributions: Taxing the extraordinary profits from immobilized Russian assets.


Escrow Account as Collateral: Placing Russian state assets into an escrow account.


Identifying Russia as a State Sponsor of Terrorism: Potentially using this designation to enforce judgments.


Investment ‘Common Fund’: Creating a fund for Ukraine’s benefit.

 

Each option carries risks. Confiscation based on third-party countermeasures with a conditional element and enforcement of international judgments against Russia are most likely to comply with international law.

 

While legal complexities remain, the G7’s efforts to explore these avenues demonstrate their commitment to supporting Ukraine during this crisis. The cautious wording in the draft statement reflects the need to address legal and technical aspects before implementing any specific measures.

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