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Immobilised Assets, Extraordinary Profits: The EU Council Decision on Russia’s Central Bank Reserves and Its Legal Challenges

On 28 February 2024, the President of the European Commission, Ursula von der Leyen, announced that ‘it is time to start a conversation about using the windfall profits of frozen Russian assets to jointly purchase military equipment for Ukraine’. This statement comes on the heels of a decision adopted by the Council of the European Union (EU) on 12 February 2024, which was hailed as the ‘first step to use Russia’s frozen assets for Ukraine’. According to this decision, Central Securities Depositories (CSDs) holding more than EUR 1 million in assets and reserves of the Central Bank of Russia (CBR) that are frozen (‘immobilised’) under EU sanctions are mandated to account for them separately and prohibited from using profits generated by these assets. This move paves the way for a future financial contribution to the EU budget from these profits, which – at least, until von der Leyen’s statement – was expected to be directed to assist Ukraine’s reconstruction through the newly established ‘Ukraine Facility’.

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Collateralising Russia’s Frozen Currency Reserves: A Creative Solution, Playing for Time, or Both?

The past several weeks have seen a new-ish development in the ongoing saga concerning the fate of the Central Bank of Russia’s (CBR) frozen foreign currency reserves. According to the Financial Times, the G7’s discussions have shifted towards issuing bonds backed by CBR assets for Ukraine’s benefit. Two unnamed officials cited by the FT described…

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Caught in a Geopolitical Crossfire: Questioning the Legality of US-Imposed Export Controls on Dutch Computer Chip Machines

For years now, the US has lobbied with the Dutch government to institute controls on the export to China of chipmaking machines produced by ASML, Europe’s most valuable tech company. In 2019, Washington effectively pushed the Netherlands to prevent the export of one of ASML’s most advanced “Extreme Ultraviolet” (EUV) lithography machines to China. And…

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Why Denmark Can’t “Block” Dark Tankers

A dangerous proposal is on the table as sanctioning authorities grasp for answers on how to improve enforcement of the Russian oil price cap. The coalition-driven cap aims to accomplish two apparently paradoxical purposes: limit Russia’s ability to generate oil-based revenue used to fund its war effort and maintain the global supply of energy. Rather than banning…

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Sanctions Imposed on Private Investors by the US and the UK in the Russian-Ukrainian Conflict: Justifiable as Countermeasures in the Law of International Responsibility?

Scenario and Problems The conflict between Russia and Ukraine continued to elicit international reactions from States beyond the pair at the epicentre of concern. Just a few months ago, the Secretary of State of the United States issued a press statement, announcing sanctions on USM Holdings owned by the Russian…

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