Discussion surrounding frozen Russian funds in Western banks touches on international law and the balance between sanctions and legal norms. On Tuesday, March 7, officials reiterated positions about asset freezes as implemented by Western authorities. Kirill Logvinov, Permanent Representative of the Russian Federation to the European Union, emphasized that confiscating state assets would clash with widely accepted legal standards.
He argued that despite extensive consultations between the European Union and the G7, any attempt to seize Russian assets would conflict with established legal norms. The Russian side also cited remarks from the European Council’s legal service, suggesting that Russia’s state assets would likely be returned, potentially with interest, in the future. If such assets were to be lost or diverted for other purposes, Logvinov warned that European taxpayers could bear the costs through compensatory measures, a scenario he described as unlikely to be favorable for the EU.
where are the assets
Bloomberg has reported that the EU legal service previously acknowledged uncertainty about the location of a substantial portion of the frozen assets belonging to the Central Bank of the Russian Federation. The total balance is estimated at around $258 billion, with only a fraction identified so far (roughly $36.4 billion). The challenge lies in locating and transferring these assets to Ukraine, a process that would require precise tracing and confirmation.
The ministry noted that any plan to move Russian assets to support Ukraine would first require locating those assets. Based on information from the Bank of Russia in 2014 and subsequent financial reports, approximate totals for gold and foreign exchange reserves have been referenced. To date, EU countries have identified and reported the whereabouts of about $36.4 billion of the frozen assets. Analysts have suggested that collaboration with the G7 and EU international partners would be essential to uncover the remainder and potentially use those funds to support Ukraine, including covering interest payments.
Ultimately, the viability of such a scheme would hinge on how much of these funds reside in the accounts of European commercial and central banks. It is widely noted that Western nations froze roughly half of Russia’s foreign exchange reserves during earlier operations, amounting to about $300 billion. In addition, assets valued at about €21.5 billion belonging to individuals and Russian entities were also frozen.
“Deal with Moscow later”
In February, during an EU summit, a high-level proposal suggested that Ukraine could receive frozen Russian assets immediately, with the option to address Moscow’s claims at a later date. The idea was framed as a unified European response, stating that Russia has claims in Europe tied to these assets. If the proceeds are allocated to Ukraine now, Europe could revisit the remaining disputes with Russia in the future. A senior official noted that while discussions about using frozen assets for Ukraine’s reconstruction had been considered, outright confiscation was not the working premise.
Reports from TASS and other outlets indicated that the European Union was exploring how frozen Russian assets might be deployed to support Ukraine’s recovery, rather than simply confiscating them. Eurostat data from 2022 show that trade between Russia and the EU reached 258.6 billion euros, the highest level in eight years. Imports to the EU from Russia rose to 203.4 billion euros, while EU exports to Russia fell by about 38.1% to 55.2 billion euros, the lowest since 2005. The EU’s trade deficit with Russia stood at roughly 148.2 billion euros, about double the level of 2021.