Economist predicts destruction of Western legal culture in confiscation of Russian assets

Confiscation of Russia's frozen assets threatens to completely destroy the legal culture of Western civilization. Alexei Zubets, director of the Institute of Socio-Economic Research at the Financial University under the Government of the Russian Federation, told Izvestia on December 11.

This is how he assessed the statement of Valerie Urben, executive director of the Euroclear depository, that the withdrawal of Russia's frozen assets is fraught with risks for the financial stability of Europe. She added that at some point Russia would want its securities back, and if those assets disappeared, the depositary would not want to be held responsible.

"Indeed it is, if it wasn't, that money would have been taken away a long time ago. They are still lying where they were put. This means that they simply don't have the tools to seize them. The main problem - why Europe and the United States have not confiscated the Russian money so far - is that within the European and Western judicial culture, legal culture, the decision has to be made by a court, and in the West there is no court that is authorized to decide property disputes between Ukraine and Russia. That is, the West is not a party to the conflict in this case," Zubets explained.

According to the economist, this confiscation of Russian assets is impossible without a court ruling. Such a thing would be a critical violation of Western legal culture.

"There is no legal basis for this, and if it is done without a legal basis, it is exactly what Urben said - the complete destruction of the legal culture of Western civilization, which they will not go for, because it automatically reduces their attractiveness for investment given the huge debts they have," the expert concluded.

The day before, the U.S. Ministry of Finance reported that Washington had allocated Kiev a $20 billion loan, which is expected to be repaid with proceeds from frozen assets of the Russian Federation. The head of the ministry, Janet Yellen, recalled that this tranche was part of the $50bn loan that the G7 countries were going to give to Ukraine. She said that the USA should tighten anti-Russian sanctions.

U.S. Secretary of State Anthony Blinken announced on December 4 the transfer of $50 billion to Kiev at the expense of profits from Russian assets in the near future. At the same time, Ukraine signed a memorandum of understanding and a loan agreement with the European Union to attract €35 billion in aid to Kiev. These funds are part of the initiative of the G7 countries on the mechanism of additional loans, which should increase revenues to Ukraine's budget.

In June, the G7 countries promised in the final statement of the summit in Puglia, Italy, that they would provide Ukraine with loans worth about $50 billion by the end of 2024, with repayment from the proceeds of Russian assets. In late October, the leaders of the association agreed on the details of the loan.

Kremlin spokesman Dmitry Peskov commented on the possible transfer of profits from immobilized Russian assets to Ukraine back in August and emphasized that such actions by Western countries were illegal and would be followed by a response.

Western countries have stepped up military and financial support for Ukraine against the background of Russia's special operation to protect Donbas, which was announced by Russian President Vladimir Putin on February 24, 2022, after the situation in the region worsened due to shelling by the Ukrainian military.