Assets are selected with the right mechanism – Kommersant FM
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The United States is preparing a mechanism for the transfer of confiscated Russian assets to Ukraine; another bill was supported by a House of Representatives committee. The document was prepared by a group of Democrats and Republicans in June 2023. It provides for “the provision of additional assistance to Kyiv in the use of assets confiscated from the Central Bank and other sovereign assets of the Russian Federation.” There have already been precedents in the United States: in May, US Attorney General Merrick Garland approved the transfer of $5.5 million to Ukraine from businessman Konstantin Malofeev; this money was frozen in 2014 and then confiscated.
Why is a separate mechanism needed? Kira Vinokurova, Special Advisor on Sanctions Issues at the Pen & Paper Bar Association, noted that he would simplify this practice: “The assets must be involved in some kind of crime to circumvent sanctions. An investigation must be conducted in which they are identified and a decision is made on their confiscation.
If this has already happened, then it will be impossible to return them, as is the case with blocked ones. According to American law, confiscated assets are transferred to the state budget. But the state can decide how to use them in the future.
This is what happened with Iraq. In fact, the US is now proposing to use the same mechanism.
As for the funds of Konstantin Malofeev, this was done in part of a specific case. And here they want to transfer this rule from specific to general, that is, any confiscated Russian assets will be transferred to Ukraine.
However, this bill has now only been approved by the relevant committee. But there should still be general agreement on a single text among both houses of parliament. Only after this will it be transferred to the president, who can also use the veto.”
Mechanisms for confiscation of Russian assets were also developed in the EU, but they never found legal grounds for this, Bloomberg reported. It is possible that in the USA the bill will not pass the next stages, because sovereign property there is protected by separate laws, emphasized Sergey Glandin, partner of BGP Litigation:
“In America, the cornerstone of the legal system is absolute respect for private property rights. Moreover, it is protected by the relevant 1976 law on the immunities of a foreign state.
Property belonging to a sovereign state can only be confiscated in any way in court if it is included in the so-called list of state sponsors of terrorism.
As we know, the Russian Federation has not yet been included in it.”
In turn, the head of the Central Bank of the Russian Federation, Elvira Nabiullina, said that the confiscation of Russian assets would have consequences for the entire global financial system. And the Kremlin promised to respond to such actions.
Press Secretary of the President of the Russian Federation Dmitry Peskov: “It is illegal. This goes against every possible rule. Of course, this will be disputed, and indefinitely. This will entail very serious judicial and legal costs for those who make such decisions and use such decisions. We will also work on response measures. It’s unlikely that they will be mirror images, but they will be such as to best suit our interests.”
The US bill also talks about an “international compensation mechanism” for cooperation with other countries in transferring blocked Russian assets to Ukraine. America, the document states, will have to strive to create one.
Western countries believe that Russia itself should help Ukraine financially, as stated in a new G7 statement. Its participants will leave their assets frozen until Moscow agrees to pay compensation for damage caused during the fighting.
Everything is clear with us – Telegram channel “Kommersant FM”.
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