The Ukraine recovery conference, hosted by the UK and Ukrainian governments, is grappling with the question of who will foot the $400bn bill for Ukraine’s postwar reconstruction. The most obvious answer is Russia and its oligarchs, as about $400bn of Russian assets are currently frozen in the West due to sanctions imposed since the beginning of the war. However, the process of confiscating these assets is proving to be legally complicated. While freezing assets is one thing, seizing them is another matter altogether. Experts warn that such actions could undermine international law, human rights, and due process, which are principles that distinguish Ukraine’s allies from the Russian regime.
Finding the right balance between what is legally permissible and what is politically acceptable is crucial. Although efforts to seize Russian state assets have begun, the road to confiscating individuals’ assets within the confines of the law is still long. Some countries have attempted to test these boundaries, but their measures may face challenges due to concerns about international peace and security, human rights violations, and significant corruption. Additionally, proving corruption on the part of most oligarchs is a difficult task that often involves lengthy and complex court battles.
The EU has taken a more cautious approach by proposing a directive to harmonize its member states’ laws in order to facilitate the confiscation of illicit proceeds. However, this directive may not address the issue of assets frozen under sanctions since these assets do not necessarily come from illicit sources.
Therefore, the question remains whether Western allies are willing to compromise their own rule of law to assist Ukraine. If the goal is to aid Ukraine’s recovery and tap into the wealth of oligarchs, there may be politically unpalatable but legally feasible solutions, such as cutting deals with the oligarchs. One suggestion circulating among Western governments is to have the oligarchs transfer part of their wealth, denounce the Kremlin’s actions in Ukraine, and have sanctions lifted in exchange. This money could then be used for Ukraine’s recovery.
The UK government has introduced legislation allowing sanctioned oligarchs to donate frozen funds to Ukraine, although they deny that it is tied to sanctions relief. However, the effectiveness of this approach depends on whether there are sufficient incentives for oligarchs to come forward. Additionally, it could undermine the concept of sanctions and strain diplomatic relations with Ukraine.
While sanctions against oligarchs may not directly halt Russian military aggression, they serve a symbolic purpose due to their proximity to the Kremlin. Allowing them an easy escape route contradicts the original intention of sanctions and appears fundamentally unfair. Therefore, it is crucial to focus on stopping the Russian war machine and targeting those who enable the conflict, rather than solely pursuing corrupt proceeds. Enforcing sanctions against these enablers and those who provide critical components to the Russian army and economy would have a greater impact on altering the course of the war.
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