Author: Robert Břešťan, HlídacíPes.org
Assets frozen worldwide belonging to Russia and its linked individuals and companies in response to the war against Ukraine could theoretically fund the entire operations of the Czech Republic for nearly four years. The total sum amounts to roughly €300 billion, equivalent to 7.5 trillion Czech crowns.
While freezing assets is relatively straightforward under international law, full confiscation is a far more complex matter. Yet, discussions within the EU about seizing these assets to support Ukraine are intensifying, and some countries have already taken action.
The Czech Republic, where frozen Russian assets are valued at approximately 10 billion crowns, is also exploring its options. About a year ago, MEP Ondřej Kolář (TOP 09) proposed legislation—still in draft form—that would allow the expropriation of assets belonging to states that “threaten the security, sovereignty, territorial integrity, or democratic foundations of the Czech Republic.”
“This law isn’t specifically about Russian assets; the word ‘Russia’ doesn’t appear in it. It could apply to hostile regimes using their properties to endanger Czech security, such as Iran or North Korea,” explained Vladimír Votápek, a co-author of the draft and Russia expert.
Any decision to seize assets and provide compensation would require government approval on a case-by-case basis. “Compensation would be based on financial equivalence, but in Russia’s case, it would immediately be frozen due to sanctions,” Votápek added.
Russia, the Aggressor, Must Pay
The issue of confiscating Russian assets was a key topic at a recent roundtable in the Czech Chamber of Deputies. According to the event’s organizer, MP Michal Zuna (TOP 09), who chairs the Permanent Commission for Oversight of the Financial Analytical Office, the debate over how to handle frozen Russian assets in the Czech Republic is critical:
“Russia has made it clear that it sees its sphere of influence stretching from Alaska to Berlin, aiming to reshape the global order. Defending our sovereignty can include addressing Russian Federation assets in the Czech Republic. It’s appropriate to discuss using these funds for Ukraine’s war reparations. Czech intelligence agencies have flagged numerous Russian-owned properties as security risks. It’s a political decision as to which approach we take.”
On November 14, 2022, the UN General Assembly adopted a resolution affirming Russia’s obligation, as the aggressor, to compensate Ukraine for damages caused. However, the UN lacks effective mechanisms to enforce such reparations, making the use of frozen Russian assets a potential tool.
The EU’s sanctions list related to Russia’s war against Ukraine includes approximately 2,400 individuals and entities tied to Putin’s regime. Sanctions include entry bans to EU territory (with the Czech Republic additionally barring Russian citizens from visas, except in specific cases), asset freezes, and restrictions on financial resources.
It’s estimated that Europe, the US, Canada, and other countries hold around €300 billion in frozen assets, with €88 billion in movable and immovable property. The majority—€210 billion—comprises Russian Central Bank assets, frozen shortly after the invasion on February 28, 2022. Of this, €183 billion is held in Belgium at the Euroclear international settlement center.
While these funds cannot be directly accessed under current conditions, their annual yields—approximately €2.5 billion to €3.5 billion—are being utilized. Most of these profits (95%) go to the EU budget but are counted as part of loan repayments for Ukraine. The remaining 5% supports the European Peace Facility, an off-budget tool funding EU military missions globally.
However, this arrangement’s future is uncertain, as it requires unanimous EU Council approval every six months. “The problem is Hungary—it’s clearly looking for procedural ways to limit this aid to Ukraine,” noted Martin Smolek, director of the legal and consular section at the Czech Foreign Ministry.
Let Russian Owners Sue Russia
Some European countries have already passed laws enabling the direct confiscation of Russian assets for Ukraine’s benefit. Estonia and Latvia are leading examples.
In January, Estonia enacted a law allowing the use of “assets of individuals and entities involved in Russia’s illegal actions” under international sanctions as a deposit for Ukraine’s reparations. This applies to all financial assets, movable, and immovable property.
“It covers assets under Estonian jurisdiction linked to Russia or entities where Russia holds over a 50% stake. The expectation is that Russian owners of confiscated assets would seek compensation from the Russian state,” explained Tomáš Opat, a lawyer with the Lobbio association, who anticipates challenges to the law reaching Estonia’s Constitutional Court soon.
Latvia has taken a bold step by expropriating the Moscow House in Riga, identified by its security services as a “hub for anti-Latvian activities orchestrated by Russia.” The Latvian government is attempting to auction the property, with proceeds intended for Ukraine, though no buyer has yet emerged.
In the Czech Republic, theoretical discussions have touched on seizing properties used by the Russian embassy. “Due to diplomatic immunity, this isn’t possible. Even Ukraine cannot seize Russian assets used for diplomatic functions,” Smolek clarified.
The Czech Republic is at least pursuing legal action to compel Russia to pay overdue rent for about 40 plots of land under properties it uses but are not part of its diplomatic mission. The amount, roughly 50 million crowns, remains unpaid, and the matter is now before the courts. If the obligation is upheld, Smolek suggested that asset seizure could follow.
A Hardline Approach Could Backfire
While freezing assets is legally defensible under sanctions and countermeasures against aggression, confiscation is far more complex. “Measures must comply with national, European, and international law,” warned Veronika Bílková, head of the International Law Department at Charles University’s Faculty of Law. “Confiscation faces legal hurdles, such as state property immunity for countries and property rights tied to fundamental freedoms for individuals and entities,” she added.
Approaches to asset confiscation vary among states united in sanctioning Russia and recognizing it as the aggressor. “Europe’s stance on expropriating Russian assets is largely cautious. I support forming a coalition of the bold to find ways to use Russian resources for Ukraine’s reconstruction, as Estonia’s model demonstrates,” said MP Zuna.
Beyond the Baltic states, the US and Canada advocate a tougher approach, while most EU countries—wary of setting a dangerous precedent—remain cautious. Differences persist even within the EU.
Belgium, which holds €183 billion in Russian Central Bank assets, prefers to keep them frozen. Yet, as reported by Euractiv, Belgian Minister Maxim Prévot stressed the need for alternatives if sanctions lapse due to opposition from countries like Hungary or Slovakia. “We could establish a new international framework to keep assets frozen, or Belgium’s parliament could pursue a national initiative,” Prévot said.
Germany’s new Chancellor Friedrich Merz supports confiscating frozen Russian assets “if legally feasible.” However, finding a legally sound approach remains unresolved.
“As bold and clever as a solution may seem, it could become a trap. Changing norms opens the door to misinterpretation. An exception may suit us now, but in a decade, it could be used against us,” cautioned Bílková.
