“Direct robbery”: the EU has found a way to legally use the assets of Russia

The legal service of the EU Council has found a legal way to use Russian assets frozen due to EU sanctions, Bloomberg reported, citing sources in the diplomatic corps. It turns out that Brussels will be able to invest the Kremlin’s assets, and send the income received from such operations to help Ukraine. Moreover, according to European law, in this way the resources will not be considered expropriated, since the principal amount and interest will be returned to our country “at a certain moment.”

We are talking about the assets of the Central Bank of the Russian Federation in the amount of at least 33.8 billion euros. About how to regard such a scenario and what Russia can do in response, “MK” found out from the experts.

European politicians have previously discussed the possibility of using the frozen assets of our country to help Ukraine, but they did not dare to move from words to deeds: they were frightened by the likely risks of such a procedure and the impossibility of legalizing it. But this week, a solution seems to have been found. The European Union will be able to use Russian assets for its own purposes and subject to “certain conditions”, and this will not even be an expropriation, lawyers from the EU Council are sure.

The most liquid assets of the Russian Federation, and we are talking about the amount of about 33.8 billion euros, in their opinion, can be invested legally, receive profit from it themselves and use it to restore Ukraine.

For the sake of fairness, it should be noted the indication of lawyers that if the operations turn out to be unprofitable, European countries will have to pay compensation to Russia. This is one of the conditions so that the actions proposed by Brussels do not completely turn into expropriation, which cannot be carried out legally in Europe.

As a first step, the EU could pool frozen Russian assets across the EU or internationally for profit. Such a scheme is fraught with a certain danger: if operations with Russian assets turn out to be unprofitable, then our country will have to compensate for the losses from the EU budget, according to the priests of the European Themis, whose opinion is quoted by Bloomberg. Local politicians treat the proposed scheme with caution, believing that in such matters it is necessary to act only together with other G7 countries. In addition, concrete steps can be discussed only after the completion of the assessment of Russian assets that have come under the control of the EU.

However, no streamlined legal language will hide the true essence of this step. We are talking about the actual theft, according to Russian experts. “Property rights in Europe, and indeed in all civilized countries, are unshakable,” recalls Vadim Tkachenko, a lawyer and founder of the vvCube consulting group. – Departure from it is possible only if there is a court decision in relation to a person, if he committed a crime for which he must reimburse the money, or if the funds were obtained illegally.

With regard to states, there are no such precedents, except in individual cases of totalitarian states, when funds were used for the purpose of restoration or indemnity. There have been precedents like this in the past, but there are no new mechanisms for this, so there are currently no legal grounds for seizing state funds.”

Even the temporary withdrawal of funds, if there is no consent of the other party to use them free of charge, is illegal – this is a criminal or administratively punishable act. Moreover, it is not clear how these funds will be returned, because the conditions for the return should be spelled out in the relevant agreement. Thus, it is impossible in principle to refer to any norms, including international law, here, the expert emphasized.

“This is a direct robbery,” Alexander Razuvaev, a member of the Supervisory Board of the Guild of Financial Analysts and Risk Managers, continues the conversation. – It is clear that the money that goes to Ukraine will never come back. In the initiative under discussion from EU lawyers, we are talking about liquid assets, that is, in the field of expropriation, or whatever they try to call it, liquid bonds and cash will fall. Bonds will be sold, cash will be plundered. That’s the whole “cunning” scheme!

It is not difficult to guess that Russia will take absolutely mirror measures that will affect the most liquid assets – investments from unfriendly European countries on the Moscow Exchange and dividends on them. As long as they are frozen. So, frozen dividends are already cash. But if the Europeans start to act, then the shares and bonds of non-residents (foreigners) can be sold on the stock exchange.

If we are talking about large blocks of securities, then they may well be sold to the public through retail banks. The money from these operations will go to the state treasury. “Formally, maybe Russia will even win, because in this way it will be possible to cover the budget deficit,” Razuvaev said. “Europe has shown that it cannot be trusted. We can recall the crusaders who promised to liberate the Holy Sepulcher, but instead plundered Christian Constantinople. I think that if the EU moves from words to deeds, Russia will formally sue, but in parallel act in a similar way: the answer from our country in the EU will be felt through the nationalization of European assets on the Moscow Exchange.

As for the consequences, such actions will only further exacerbate the differences between countries. According to Tkachenko, this will be an occasion for other states that have assets in Europe – primarily Asian and Latin American ones – to withdraw their property from there or somehow secure it. As a result, the European financial market can lose much more than gain, the expert believes.