What is Russian property in the world and how to confiscate it

 

In April, the Congress of the United States of America passed a decision to confiscate Russian property in favor of Ukraine. What are the assets of the Russian Federation in the US and the rest of the world? LIGA.net dealt with this issue.

Sovereign property is all property that belongs to the state and enjoys sovereign immunity in international law. It is the property of the country's central bank, as well as the property of diplomatic and consular institutions. It is also military property, central bank accounts, funds that are part of the cultural heritage of the state.

Most of the frozen Russian funds abroad belong to the Central Bank of the Russian Federation. It is known that the total amount of real estate in the world reaches around 300 billion euros.

 

In the US, according to various calculations, there are five to seven billion dollars of Russian sovereign wealth.

It is always about confiscation of state property. In addition, there are assets of Russian oligarchs and their family members. Even the transactions of various Russian legal or private entities are frozen pending their verification - whether these specific people or companies have anything to do with aggression.

Olena Galushka, head of international relations at the non-governmental organization "Center for Combating Corruption", lobbies for the confiscation of Russian assets in Ukraine's partner countries. She says confiscation of private property requires a more complex procedure.

"There must be either a criminal case, or, if it is a civil confiscation, then there must be substantial reasons that will show the connection of this particular oligarch - why he finances Russian aggression and so on," said the representative of the Center.

On the other hand, the Russian Federation, since it is unable to confiscate the state property of other states, resorts to radical methods and expropriates the property of private owners.

For example, the Russian authorities took the Baltika brewery in Russia from the Danish company Carlsberg and placed it under the management of the state body "Rosimushchesto". In addition, in March 2023, the Russians took over 83.73 percent of the energy company Unipro, which is owned by the German Uniper.

 

What is property? Which banks is it in?

 

"The Central Bank of Russia did not provide detailed information on the structure of frozen assets, but based on information from the beginning of 2022, Reuters writes that the Central Bank of Russia holds about 207 billion dollars in euros, 67 billion dollars in US dollars and 37 billion British pounds". says Vladislav Vlasjuk, secretary of the Jermak-McFaul international sanctions group, in a comment for LIGA.net.

According to Vlasyuk, the Central Bank of the Russian Federation also held holdings (monetary documents: cheques, promissory notes, letters of credit) worth $36 billion in Japanese yen, $19 billion in Canadian dollars, six billion dollars in Australian dollars and $1.8 billion in Singapore dollars, while funds in Swiss francs amounted to about one billion dollars.

The Central Bank of Russia announced that these funds were mainly invested in foreign securities, bank deposits and "nostro" correspondent accounts.

The largest shares are in government bonds of China, Germany, France, Great Britain, Austria and Canada.

 

According to Olena Galushka, Russia cannot keep its gold and currency reserves in rubles. This is the essence of gold and currency reserves - the state invests part of its reserves in gold or currencies of other countries. To ensure stability and earn money.

It is known that after the annexation of Crimea, Russia actively transferred money from US dollars to other currencies.

Most of the funds are frozen at the depository. Specifically, around 190 billion euros in the Belgian Euroclear.

"The rest is frozen in other G7 countries. Likewise, in Switzerland, and even, it seems, there are several depositories of Russian assets in Australia. These are the US, Great Britain, France, Germany, Japan, Canada. When we talk about the US, according to various estimates, because no one actually says the exact numbers from the very beginning – it's five to eight billion dollars in assets, and it won't have an immediate wow effect for Ukraine," says Olena Galushka.

 

How can funds be transferred to Ukraine?

 

"Currently, there are several options for a legal mechanism that would allow for easy confiscation of sovereign assets of the Russian Federation in favor of Ukraine. The US has adopted the REPO Act to authorize the US president to confiscate Russian assets," says Vladislav Vlasyuk

The mechanism proposed by the US Senate - act HR8038 - proposes the transfer of confiscated property to the international fund Ukrainian Compensation Fund, which was specially created for this purpose. Funds seized by US partners can be transferred to the Fund. As well as the funds that were seized in the USA and transferred to the Ukrainian Support Fund - an intra-American fund for the mobilization of confiscated assets of the Russian Federation within the state.

Previously, the UK government offered to transfer funds to Ukraine in the form of a syndicated loan or in the form of bonds. It was proposed that these funds become a guarantee of Russian payment of reparations to Ukraine for the damage caused by the war. In the EU, the issue of using the income from the sovereign funds of the Russian Federation placed in the EU is being promoted more actively.

 

 

What else is Ukraine doing?

 

In addition to the state's activities related to the confiscation of Russian property, Ukrainian civil society is also active. The Central Committee of the Communist Party of Ukraine is conducting the Make Russia Pay campaign, calling on the leaders of the G7 countries to sign a petition to confiscate the property of the aggressor country.

"Our task is to attract as much attention as possible to this problem. And to build coalitions of people, politicians, public activists, analysts, researchers who are ready to promote this problem and explain in their countries why it can and should be done," says Olena Galushka.

According to the activists of the Communist Party of Ukraine, more informational activities should be devoted to this issue in the EU, where most of the assets of the Russian Federation are located. For example, there were hearings in the Bundestag and the Italian Parliament. Briefs and analyzes were written for European politicians, in which counterarguments presented by opponents of confiscation were broken down.