The EU recognized the absence of grounds for the confiscation of Russian assets

The European Union has concluded that there is no legal basis for a complete confiscation of frozen Russian assets. About it writes Bloomberg citing a community report on the subject.

The agency notes that the EU is considering several options for using more than 200 billion euros of assets of the Bank of Russia in order to send them to Ukraine.

The working group on this issue does not see “a reliable legal path to confiscate frozen assets only on the grounds that these assets are under EU restrictive measures.” In this regard, the bloc advocates “for the direction of windfall profits from investments to Ukraine.”

According to Austrian Foreign Minister Alexander Schallenberg, if Russian assets are confiscated, and then the decision is challenged in the courts and canceled, then this “would be a diplomatic and economic disaster.”

Bloomberg notes that world banks fear that Moscow may retaliate and make life difficult for foreign banks, and the chief executive of one of the credit institutions clarified that he is opposed in principle to the confiscation of Russian assets.

It follows from the report that the group proposes to oblige companies with Russian assets, which receive large profits, “to transfer a significant amount to the EU.” This can reduce legal risks for the bloc, the authors of the initiative emphasize. EU officials noted that this model will not affect financial stability and the legal situation. The leaders of the countries of the union can discuss options for resolving the situation with the frozen assets next week.

After the start of the special operation in Ukraine, Western countries blocked 300 billion euros of reserves of the Central Bank of Russia and 19 billion euros of private funds of Russian businessmen, said in November 2022 the head of the European Commission, Ursula von der Leyen.

The European Commission stated that the blocked funds should be combined into a fund, the funds of which should be invested, and the profit from these investments should be used for compensation payments to Ukraine. However, the European Central Bank (ECB) fears that the use of interest on frozen assets could undermine confidence in the euro as a global currency, especially if the EU acts unilaterally without other G7 countries. The Kremlin called the freezing of Russian assets a theft.