The European Commission is studying legal options for confiscating Russian state and private property as compensation for Ukraine's reconstruction, Politico reported, citing a relevant document.
According to the document, the goal is to identify ways to strengthen the tracing, identification, freezing and management of assets as preliminary steps for potential confiscation.
At issue are almost $300 billion in frozen assets of the Russian Central Bank, as well as the assets and income of individuals and entities on the EU sanctions list.
The idea was expressed back in May, and it is supported by Kiev, as well as Poland, the Baltic States and Slovakia. In October, EU leaders instructed the European Commission to explore legal options for seizing Russian assets currently frozen under sanctions. But the catch is that there is currently no legal mechanism for confiscating Russian assets, as U.S. Treasury Secretary Janet Yellen pointed out back in May. It needs to be created.
As for private assets belonging to sanctioned individuals or entities, Brussels is preparing proposals to make sanctions evasion an EU crime, which would make it easier to confiscate them, but only if there is a criminal conviction. Even then, the EU would have to contest each case in court, and would probably have to litigate for years.
Many of these assets would be considered foreign investments that enjoy protection from expropriation without compensation and the right to fair and equitable treatment under international treaties that Russia has with many EU countries. The confiscation authority also needs to establish a clear link between the property owner and the conflict in Ukraine.
As for assets of state-owned enterprises owned by Russia, the document notes that they are not in principle subject to such a convention, but their seizure could cause problems related to the confiscation of private property, in addition to the need to demonstrate sufficient connection to the Russian state.
The EU is also mulling a withdrawal tax on the assets or income from the assets of sanctioned individuals who want to remove their property from the EU. This could lead to its own legal problems, since it would target a certain group of people, contrary to international non-discrimination law, and they, in turn, could invoke the individual's right to property as a defense.