Russian Assets, Accountability for Ukraine, and a Plea for Short-Term Thinking

Written by

The viciousness of the Russian armed attack on Ukraine means that avenues for accountability are at a premium. Ukraine’s major cities, including Kyiv, Kharkiv and Chernihiv, had been withstanding a days-long barrage of indiscriminate shelling and missile strikes. War crimes have evidently been committed while Russian state media is praising President Putin for, chillingly, attempting a ‘solution to the Ukrainian question’. For its part, Russia is vowing to fight ‘till the end’ to ‘de-Nazify’ a multilingual, multi-ethnic Ukraine with its Russian-speaking, Jewish president.

This is hardly a moment conducive to unhurried reflection, but nor is there any time to waste in considering possible legal and practical responses. In an extraordinary feat, the Ukrainian government has produced an ICJ application with the dizzying speed of the crashing rouble. As Marko Milanovic notes, though, even if Ukraine succeeds on provisional measures, the chances of Russia complying are vanishingly small. Likewise, while few would dispute that President Putin has committed a crime of aggression, the prospect of Russian police officers putting him in handcuffs seems remote for now.

The sanctions game, though, is in full swing. Unilateral sanctions by the US, EU and other likeminded nations have been brandished with vigour. These include the freezing of the assets of the Russian Central Bank in the EU and the US, as well as those of multiple individuals and companies, including one of Russia’s largest banks, VTB. President Putin is among those sanctioned, alongside the full cast of the unlikely YouTube stars that make up Russia’s Security Council.

Sanctions are normally conceptualised as a means of freezing rather than confiscating assets. In these circumstances, however, calls are growing stronger for the US, EU and UK to confiscate frozen Russian assets and deploy them for the benefit of the Ukrainian people. In the US, Congressmen Malinowski (D) and Wilson (R) introduced a bill on Wednesday that would vest in the president the power to confiscate property worth over US$5 million from those linked to ‘corruption, human rights violations, Russian malign influence, or conflicts in Ukraine’, with a view to those assets then being used for one of six approved purposes, all to do with rebuilding Ukraine.

Another similar idea is to enable private suits against Russia in domestic courts, wherever frozen Russian assets are located, by those who came to harm as a result of Russia’s actions. Such frozen assets would be used to satisfy those claims. This idea has parallels in the Justice Against Sponsors of Terrorism Act 2016, which authorises private claims against foreign states responsible for acts of terror that result in a ‘physical injury to person or property or death occurring in the United States’. This law modifies general US rules on sovereign immunity laid out in the Foreign State Immunities Act 1976.

These proposals abound with difficulties insofar as domestic and international law are concerned. Confiscating the property of private individuals and companies almost inevitably engages constitutional and human rights safeguards under national laws, as well as applicable bilateral investment treaties. Taking away state-owned assets presents sovereign immunity challenges. As an example, far-reaching though it is, the Justice Against Sponsors of Terrorism Act 2016 retains a territorial link to the US that plausibly brings the exercise of jurisdiction under it within the scope of the ‘territorial tort’ exception.

These hurdles are not, in my view, insurmountable. To understand why, we must take a step back and ponder for a moment both the enormity of the crime and the dearth of accountability. With that in mind, if a European country confiscated Kremlin-linked wealth based on a relaxed evidential standard such as ‘credible evidence’, as per the US bill I alluded to, it is not at all inconceivable that the requirements of A1P1 will have been complied with, for deprivation of property will be ‘in the public interest and subject to the conditions provided for by law and by the general principles of international law’.

As relates to sovereign immunity, it is perfectly respectable to argue that the otherwise unlawful exercise of jurisdiction over Russia’s state-owned assets represents a lawful countermeasure to its own breaches of international law. Yes, state practice in support of that is sparse, but if state practice has any redeeming features, it is precisely that it is not immutable, least of all in times of seismic shifts. To formulate the new exception to state immunity in a principled way that does not single out any one state, it could be limited to UN Security Council members that wage aggressive war and forestall accountability via UN mechanisms.

There will be policy-oriented objections, too. The notion that sanctioned assets can be confiscated for good may be unpalatable to some. This is because, to justify the relatively light due process guarantees that attach to the imposition of sanctions, governments tend to play them up as temporary, preventative measures. But that really depends. One of the EU’s sanctions regimes, known as ‘misappropriation sanctions’, was aimed specifically at securing ill-gotten assets of public officials from Egypt, Tunisia and Ukraine with a view to their further confiscation.

For these reasons, innovative legislative initiatives such as that of Malinowski and Wilson are commendable. In welcoming them, as international lawyers, we may have to put on hold for a moment our conservative instincts (legal, not political), much as one must suspend one’s disbelief to imagine any transformative changes. Not only that, but one would hope that, faced with a stunning and grotesque breach of international law, most of us will be thinking creatively about both long-term and short-term – no less important! – issues. (Or, at least, those of us who are not too busy revelling in their imaginary moral courage, while sparing not a word for the suffering that is washing over Ukraine.)

In fact, short-term is more important now. It is genuinely important to reflect on the effectiveness of international law, and vital to think creatively about how the international order that has failed ought to be revamped. But these are primarily issues for the future, if I may say so, best to be pondered once missiles cease flying and Ukrainians emerge from bomb shelters to rebuild their country. Without diminishing in any way at all the value of more high-level thinking, it appears to me that the best contribution at this point in time is to identify pressure points, on international and domestic levels, for compelling Russia to stop the unfolding horror – as does Jason Blazakis’s latest piece on designating Russia as a state sponsor of terrorism, or Rebecca Barber’s one on suspending Russia’s representation in the UN.

This, of course, is exactly the kind of thinking the Ukrainian government is doing as you read this. There will be inevitable mistakes, and arguments that will fall flat. Take, for instance, Ukraine’s claim that Russia is not the rightful successor to the USSR in its seat as a permanent member of the UN Security Council. While it has some lineage in Ukraine’s international law circles, there is no shortage of reasons as to why this contention is likely to fail. One might wonder why it has been rolled out at all. Part of the answer is, to my mind, that it’s awfully difficult to wage precision lawfare from bunkers and metro stations, or even from Ukrainian diplomatic missions in The Hague and New York, when one is constantly in touch with the loved ones back home to guide them through life-changing decisions. There will be a fair share of those arguments in the days and weeks to come, and it seems to me that the best way to engage with them is not from a standpoint of faux intellectual superiority, but in a spirit of solidarity with a law-abiding state that seeks to use international law to protect its citizens. (And, if you just happen to be a renowned international lawyer freshly out of work, why not offer pro bono services to Ukraine?).

Print Friendly, PDF & Email

Leave a Comment

Comments for this post are closed


Galip Engin Şimşek says

March 7, 2022

With regard to private individuals'assets, preventive confiscation is the only plausible option if it is reasonable to believe that Russian authorities might have an access to them to continue the aggression, however asset freeze would be a better way in terms of property rights.
For state reserves, they should be frozen as a preventive measure for not helping a situation in violation of jus cogens rule.
However the real long term solution would be cases brought by Ukranians against Russia for damages