In recent days there has been a lot of talk about frozen “Russian assets”, in relation to the idea of using these assets as collateral or basis for a loan of around 90 billion euros to Ukraine: a hypothesis that has not yet been realized due to the lack of political consensus and the legal risks perceived by member states. But when we talk about Russian assets, what exactly are we talking about? These are mainly financial assets of the Russian state, especially Central Bank reserves held abroad and (partly) assets of sanctioned Russian individuals and companies. These assets were frozen in Western countries after the invasion of Ukraine (February 24, 2022), but not permanently confiscated, and are located in territories under the jurisdiction of the countries of the European Union, the United States, Canada, Japan and other states participating in the joint effort against Russian assets abroad.
In any case, it should be kept in mind that the first Western sanctions against Russia do not date back to 2022, but to 2014, i.e. the day after the forced annexation of Crimea and the start of the war in Donbass. At that stage the European Union and Western countries launched the first rounds of sanctions, especially against political and military figures of the Russian Federation.
Not just state assets: sanctions also affect individuals
The sanctions do not only concern the Russian state, but also apply to Russian-linked individuals — Russian citizens but not only — found guilty of or involved in sabotage, election interference, disinformation and other actions aimed at destabilizing the EU and the West in general. There is also an additional level of sanctions directed against assets of a personal nature belonging to individuals responsible for serious human rights violations, in particular members of the Putin nomenclature. For these people there is also a ban on travel or transit in Western countries.
Where the frozen assets are located and how much they amount to
The overall quantification of frozen assets is complex. The available data mainly refers to Russian state assets and accounts held abroad by the Russian Central Bank. Most of these assets are under the jurisdiction of the European Union, but significant assets are also present in North America, Japan and other countries.
Within the EU, Belgium holds the largest share, with around $210 billion in Russian assets seized. France follows with 22.3 billion dollars and Luxembourg with 11.7 billion. Outside the European Union, the United Kingdom has frozen $31.6 billion in assets, while Switzerland holds about $7.3 billion.
Outside the European continent, Japan stands out, which with 31.8 billion dollars in seized assets is the second country in the world after Belgium. Canada and the United States complete the picture, having frozen 17.7 and 5.5 billion dollars respectively.
Overall, this is approximately $340 billion, referring exclusively to assets of the Russian state and not to assets owned by individuals.
In any case, it must be said that the value of these frozen assets varies over time due to inflation and the presence of interest-bearing financial instruments that produce interest.
Russian assets: not enough for the reconstruction of Ukraine
The actual confiscation and reuse of these assets is a hypothesis that opens a real Pandora’s box on a legal level: a definitive confiscation, in fact, would be equivalent, from the point of view of international law, to a forced expropriation of assets of a sovereign State. Any future Russian leadership could demand the return of these assets, including through political pressure or legal action.
The idea of using these funds for the reconstruction of Ukraine presents further problems. First of all, the quantification of the damages: some estimates speak of around 400 billion dollars, others reach up to a trillion. Since the conflict is still ongoing, it is extremely difficult to establish a definitive figure.
In any case, it now appears established that the damages suffered by Ukraine greatly exceed the overall value of Russian assets frozen abroad, both state assets and those belonging to the sanctioned oligarchs. The direct use of these assets to finance reconstruction or support Kiev’s war effort would open up scenarios of legal disputes that would be difficult to manage. Precisely for this reason, to date, Western countries have avoided affecting the main core of the assets seized in 2022, the most significant in terms of value.
Sanctions also go beyond Russia: Belarus, Moldova and Ukraine
The European Union’s sanctions regime applies not only to Russia, but also to Belarus, Moldova and Ukraine itself. In the case of Belarus, the entities involved in the production of dual-use technologies and in logistical, financial and commercial support to the Russian Federation are affected.
As for Moldova, sanctions apply to individuals who, in collaboration with Moscow, threaten the country’s sovereignty and security. Finally, in the case of Ukraine, the sanctions regime targets individuals who, from 2014 to today, have supported Russian operations or undermined the security and dignity of the Ukrainian state, also including figures within the country held responsible for human rights violations or misappropriation of public or Western funds.
