Content:
  1. What are these assets, and in which banks are they held?
  2. How can they be transferred to Ukraine?
  3. What else is Ukraine doing?

In April, the US Congress agreed to confiscate Russian assets in favor of Ukraine. What are the assets of the Russian Federation in the United States and the rest of the world? LIGA.net looked into this issue.

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Sovereign assets are all assets that belong to the state and enjoy sovereign immunity in international law. These are the assets of the country's central bank, as well as the assets of diplomatic and consular missions. These are military assets, central bank accounts, and assets that are part of the cultural heritage of the state.

Most of the frozen Russian assets abroad belong to the Central Bank of the Russian Federation. It is known that the total amount of immobilized assets in the world reaches about 300 billion euros.

According to various estimates, there are between $5 billion and $7 billion of Russian sovereign assets in the United States.

It is always the confiscation of state assets that is under consideration. In addition, there are assets of Russian oligarchs and their family members. Even the transactions of various Russian legal entities or individuals have been frozen until they are verified to see if these particular people or companies have anything to do with the aggression.

Olena Halushka, head of international relations at the Anti-Corruption Action Center, is lobbying for the confiscation of Russian assets in Ukraine's partner countries. She explains that a more complicated procedure is needed to confiscate private assets.

"There must be either a criminal case or, if it is a civil forfeiture, there must be substantial grounds that will show the connection of this particular oligarch – why he is financing Russian aggression and so on," says the AntAC representative.

The Russian Federation itself, unable to confiscate state assets of foreign countries, resorts to radical methods and expropriates assets of private owners.

For example, the Russian authorities took away Carlsberg's Baltika brewery from the Danish company and placed it under the management of the state authority Rosimuschestvo, the Federal Agency for State Property Management. In addition, in March 2023, the Russian authorities seized 83.73% of the energy company Unipro, owned by German Uniper.

What are these assets, and in which banks are they held?

"The Russian Central Bank did not provide detailed information on the structure of the frozen assets, but based on the information as of the beginning of 2022, Reuters writes that the Central Bank of Russia held about $207 billion in euros, $67 billion in US dollars and $37 billion in British pounds sterling," Vladyslav Vlasiuk, secretary of the Yermak-McFaul International Sanctions Group, told LIGA.net.

According to Vlasiuk, the Central Bank of the Russian Federation also had holdings (money market instruments: checks, bills, letters of credit) in Japanese yen worth $36 billion, Canadian dollars – $19 billion, Australian dollars – $6 billion, and Singapore dollars – $1.8 billion.

The Central Bank of Russia said that these assets were mainly invested in foreign securities, bank deposits, and nostro correspondent accounts.

The largest holdings were in sovereign bonds of China, Germany, France, the United Kingdom, Austria, and Canada.

According to Halushka, Russia cannot keep its foreign exchange reserves in rubles. This is the essence of foreign exchange reserves as a country invests part of its reserves in gold or currencies of other countries. In order to gain stability and to make money.

After the annexation of Crimea, Russia actively transferred money from US dollars to other currencies.

Most of the assets were frozen in depositories. In particular, about 190 billion euros in the Belgian Euroclear.

"The rest was frozen in other countries of the Group of Seven. Switzerland and even a little bit in Australia, I think. These are the United States, the United Kingdom, France, Germany, Japan, and Canada. And when we talk about the United States, according to various estimates, because no one really says the exact figures from the very beginning, it is from $5 billion to $8 billion in assets. That is, it is not very much. It will not have an instant wow effect for Ukraine," says Halushka.

How can they be transferred to Ukraine?

"Currently, there are several options for a legal mechanism that would make it easy to confiscate Russian sovereign assets in favor of Ukraine. The USA has adopted the REPO Act, which authorizes the US President to confiscate Russian assets," says Vladyslav Vlasiuk.

The mechanism proposed by the US Senate – HR8038 – proposes to transfer confiscated assets to the international fund Ukraine Compensation Fund, created, in particular, for this purpose. Funds confiscated by US partners can be transferred to it. As well as the funds that were confiscated in the United States and transferred to the Ukraine Support Fund, an intra-American fund for mobilizing confiscated Russian assets within the country.

Earlier, the UK government proposed to transfer the funds to Ukraine in the form of a syndicated loan or bonds. It is proposed that these funds will guarantee that Russia will pay reparations to Ukraine for the damage caused by the war. The EU is more actively promoting the use of income from Russian sovereign assets placed in the EU.

What else is Ukraine doing?

In addition to the state's efforts to confiscate Russia's assets, Ukrainian civil society is also active. The AntAC is conducting the Make Russia Pay campaign, which calls on the leaders of the G7 countries to sign a petition to confiscate the aggressor state's assets.

"Our task is to draw as much attention to this issue as possible. And to build coalitions of people, politicians, civic activists, analysts, researchers who are ready to promote this issue and explain in their countries why it can and should be done," says Olena Halushka.

According to the AntAC activists, this issue should be given more attention in the EU, where most of Russia's assets are located. For example, there were hearings in the Bundestag and the Italian parliament. Briefs and analyses are written for European politicians, in which the counterarguments put forward by opponents of confiscation are refuted.