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15 Apr, 2024 13:59

UK won’t seize Russian money – Politico   

Expropriating frozen funds would have long-ranging legal ramifications, experts warn
UK won’t seize Russian money – Politico   

The UK might not actually confiscate Russia’s immobilized assets despite political pledges to do so because such a step would violate the rule of law and lead to a litany of legal quandaries, according to sanctions experts cited by Politico in an article on Monday.  

London has blocked £26 billion ($32.1 billion) in assets belonging to the Russian state since the beginning of the Ukraine conflict, according to the Bank of Russia, and over £18 billion ($22.4 billion) in private Russia-linked assets, the British government has said.   

Many UK officials have long been pushing to confiscate the money and use it to pay reparations to Ukraine.  

Politico noted that in 2022 British MP Michael Gove proposed seizing the mansions of wealthy Russians in the UK capital, nicknamed “Londongrad” for its reputation as a destination for Russian magnates, and use them to house Ukrainian refugees. Other UK officials have insisted that Russia’s sovereign assets should be used to help rebuild Ukraine.   

However two years on, little has been done to actually seize the assets despite much “grandstanding,” the outlet noted.  

The sanctions lawyers and experts who spoke to Politico said that regardless of the “political peacocking” there will never be any legal standing to take the frozen Russian money or property.

“The British government is unlikely to be comfortable forging a brave new legal order,” Anna Bradshaw, a sanctions lawyer at Peters and Peters told the outlet.  

While blocking the assets could be viewed as a temporary sanctions tool, outright seizure would make the UK a “kleptocratic regime,” according to MP Harriett Baldwin, who chairs the Commons Treasury Committee. 

Other lawyers agree that permanent confiscation of the underlying assets would have “massive” legal ramifications. Despite ongoing discussions among Western countries on the potential seizure of the interest earned from Russia’s frozen central bank reserves, there’s little chance that assets belonging to individuals would ever be tapped.  

According to Bradshaw, governments that seize privately owned assets “start rewriting the basic principles that underpin most legal systems.”   

While Kiev’s Western backers generally agree that the frozen assets should be used to aid Ukraine, they are at odds over legal ways of tapping them.   

“Even if only the net profits, rather than the underlying assets, are seized, there are going to be years if not decades of international lawsuits,” Francis Bond, a sanctions lawyer at Macfarlanes said.  

In total, the West has frozen about $300 billion in Russian state assets and more than $80 billion worth of assets belonging to Russian citizens and businesses.   

Russia has repeatedly said these actions constitute theft and warned it would respond in kind if necessary.

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