Confiscating Russian sovereign assets
The Senate Foreign Relations Committee just passed the Rebuilding Economic Prosperity and Opportunity (REPO) for Ukrainians Act. This legislation empowers the US president to seize Russian state assets within the US and allocate them to Ukraine for reconstruction purposes (read more here). This legislation would add to the existing legal case for confiscation, which is already strong.
Critics argue that confiscating Russian state assets could set a dangerous precedent, enabling less principled states to arbitrarily confiscate assets. However, such states are unlikely to require either implicit or explicit permission to act inappropriately. A more significant concern is the potential precedent set by not seizing Russian assets. The responsibility for the damage caused by Russia’s invasion of Ukraine is unequivocally clear. If the international community lacks a mechanism for asset seizure in such clear-cut cases, it sends a message to potential aggressors that they can retain their assets within the global banking system if they achieve military victory.
While post-conflict reparations are not a new concept, the global determination to militarily defeat Russia is notably weak. The primary goal of most world leaders is to expel Russia from Ukraine, a far cry from a military defeat. Given these circumstances, funds for Ukraine’s reconstruction can only come from three sources: seized Russian state assets, Western taxpayers, and Ukraine itself. Relying solely on Ukraine’s resources would result in long-lasting poverty and dysfunction, an outcome deemed neither moral nor desirable. Western taxpayers are unlikely to bear the entire burden, making the confiscation of Russian state assets not only ethically justified but also a necessary source of financial support for Ukraine.
It is crucial that the confiscation of frozen Russian assets is carried out in a transparent and systematic way, with the explicit acknowledgment that a precedent is being established for future conflicts: Any unprovoked attack will result in the world holding the aggressor financially accountable, regardless of the military outcome. This differs from traditional post-conflict reparations, where the defeated party may end up compensating the victor, even if the victor shares blame for the conflict.
In future conflicts, the definition of “unprovoked” may be contested, and it will be important for world leaders to clarify this and for courts to make rulings. However, in the case of Russia’s invasion of Ukraine, there is no ambiguity. Time is not on Ukraine’s side, and world leaders must act swiftly to make this a reality.
Originally published at https://ukraineinsights.substack.com.
