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SEIZURE OF RUSSIAN PROPERTY ABROAD M.V. Popkova, Student
Supervisor: A.P. Panin, Candidate of Economic Sciences, Associate Professor Kaluga Institute (branch) All Russia State University of Justice (Russia, Kaluga)
DOLW.24412/2500-1000-2024-5-3-40-46
Abstract. The current political situation in the world is developing in a negative way and has an impact on many areas of activity and relations between states. Politicians and official representatives of a number of countries are trying to show other nations their way, directly interfere with the realization of the interests of other peoples, in particular in the field of economics. Such "unscrupulous" world players use blackmail, aggressive statements, etc. This article attempts to analyze cases of positive influence and negative interference of politics in the economic sphere and to cover the opinions of experts on the legitimacy of such interference.
Keywords: Russian property, sanctions, politics, political and economic relations, economic sphere, legislation, International Law.
Human life comprises many spheres and obeys, on the one hand, its own internal laws, and, on the other hand, general laws of interaction. When the situation in the world is stable, when there are no wars and other disasters, then all these areas develop progressively, in accordance with the natural order of things.
Unfortunately, today the world arena is "seething". There is a struggle for the advancement of interests and ambitions. This struggle is often conducted "dishonestly", in violation of international law, ethical and universal moral principles.
Turning to international news, any law-abiding person is lost in guesses about the ways international politics is done by a number of countries, namely the countries that are opponents of Russia at the moment. Among the frequently appearing headlines in online publications and in the press, there are many about Russia's assets to be frozen, partially frozen, and planned to be transferred to some other states in order to "help" them and "harm" our country.
Undoubtedly, politics plays a huge role in the life of all states and common people. In the history of mankind there are a lot of examples of famous, decent and respected statesmen who lived and worked in many countries. They stopped wars and brought countries out of crises. However, politics and some politicians often intervened in those
spheres of societies where specialists, experts and professionals have been supposed to be working and should have determined the main vector of development of nations.
The current political situation in the world is developing in a negative way and impacts many areas of activity and relations between peoples. Politicians and official representatives of some countries are trying to guide and teach other states, directly interfering with the realization of the interests of other nations. This happens very often in the field of economics, in particular. Such "unscrupulous" world players use blackmail, aggressive statements and attacks against officials, forgery, deception of their own citizens regardless of the situation in other countries, impose sanctions and consider themselves "entitled" to act in this way, depriving a number of states of the right to raise their voice and go their independent way.
It is quite obvious that there are both positive and negative sides in interaction of politics and economy.
Among positive influences there are the following:
- the state creates conditions for the development of entrepreneurship and business activity of the population;
- competent scientific and technical policy of the state leads to an increase in labor productivity, which has a positive effect on the production environment;
- the state supports socially significant sectors of the economy, small and medium-sized businesses, and introduces other measures aimed at stabilizing and developing the economy [1].
However, foreign trade can cause a political and economic global conflict. Such conflicts lead to trade wars, for example, in 2018, the Trump administration imposed duties on steel and aluminum. As a result, the interests of a wide range of states, including EU countries, Canada and Mexico, were not taken into account and these states were forced to agree to less favorable terms of the North American Free Trade Agreement [1]. Such an activity can be regarded as a trade war or economic leverage.
Sanctions are one of the clearest examples of using economic leverage to achieve political goals. The sanctions policy is introduced to limit undesirable activities, for example, after the Islamic Revolution, Western countries began to put pressure on Iran. The official reasons for the sanctions were the development of the Iranian nuclear program, human rights violations, and support for terrorist organizations in the Middle East.
Western sanctions have been imposed on the Russian Federation since the end of February 2022. This happened after the start of the special operation in Ukraine and following the coming of Crimea under the Russian jurisdiction after a referendum held in full compliance with International Law on the peninsula, but the results of which were not recognized by Western countries. The sanctions affected banks and individuals and their accounts and became the basis for freezing some part of the gold and foreign exchange reserves of the Russian Central Bank. According to Russian Finance Minister Anton Siluanov, in March 2022, Western countries blocked about half of the gold and foreign exchange reserves of the Bank of Russia, which made about $300 billion out of $640 billion [2].
According to open data, in September 2023, the REPO task force (Russian Elites, Proxies and Oligarchs), created in 2022 by a number of countries to search for and seize Russian-related property based on sanctions, estimated the value of the blocked sovereign
assets of the Russian Federation at about $280 billion. In December of the same year, this figure was confirmed by the Financial Times newspaper with reference to the report of the European Commission. According to it, Western countries, primarily members of the G7 and the European Union, have frozen about €260 billion (about $280 billion) of assets of the Central Bank of the Russian Federation in the form of cash and securities. The largest volume of such assets - €191 billion ($208 billion) - is blocked on the Euroclear international platform in Belgium. France froze about €19 billion (about $21 billion), Germany's share was about €210 million. Switzerland and the United Kingdom, which are not members of the EU, announced the blocking of sovereign assets of the Russian Federation in the amount of 7.7 billion Swiss francs ($8.8 billion) and £13.7 billion ($15.6 billion), respectively. These amounts will increase if to add to them the frozen funds of individuals under sanctions, for example, in Germany, "the economic resources of individuals together with the blocked assets of the Russian Central Bank" are estimated at €4.1 billion ($4.5 billion), in Switzerland the total amount reaches 17.6 billion francs (about $20 billion), in the UK - £22.7 billion ($29 billion), and according to The Guardian, it amounts to £25 billion ($32 billion). Assets seized in the United States are estimated at $5 billion, in Canada - at $328 million [2].
In February 2024, lawyers from Belgium, Great Britain, Germany, the Netherlands, the USA, France and Japan concluded in an opinion prepared for the G7 that countermeasures against Russia in the form of confiscation of its blocked assets are legitimate from the point of view of International Law, if to consider the seized funds as compensation for the damage caused by it. According to Bloomberg, the idea of the United States to confiscate assets was supported by the United Kingdom and Canada. At the same time, the German and French authorities are afraid of legal obstacles and the negative impact of such measures on the stability of the euro.
The blocking of Russian assets was carried out on the basis of the home legislation of the countries that imposed the appropriate sanctions. In relation to individuals, local authori-
ties most often use certain provisions of legislation on countering the legalization of proceeds from crime. Thus, it turns out that Russia is declared a criminal a priori. Western countries assume the responsibility and powers of a justice of the peace.
According to the chairman of the State Duma Vyacheslav Volodin, the freezing of Russian assets violates the principle of inviolability of private property. But most experts note that the seized funds and property have not yet been appropriated and consider the freezing of financial assets as a "preliminary interim measure for the trial".
Under these articles, they find an asset and arrest it in order to further prove in court the illegality of obtaining it, for example, as a result of fraudulent actions [3].
The freezing of assets is by its nature similar to the total seizure of property. The owner is deprived of control over the asset until the restrictions are specifically lifted. But the blocking of assets should not be confused with confiscation or expropriation, since when frozen, a person who has fallen under sanctions is not deprived of property rights.
However, such measures are introduced on their own, and not as part of the judicial process. The sanctions regulation of the United States, the EU and to a lesser extent other countries has become a separate branch of legislation with a common and special part. The general part can include, for example:
1. The Law on Countering America's Adversaries Through Sanctions (English: Countering America's Adversaries Through Sanctions Act), which the United States introduced to impose sanctions on Iran, Russia and North Korea [4, p. 35].
2. The Law on the Support of Freedom of Ukraine of 2014 (eng. Ukraine Freedom Support Act of 2014). In it, the United States pledged to help Ukraine restore its sovereignty and territorial integrity [5, p. 102].
3. The International Emergency Economic Powers Act (IEEPA), which allows the US president to adopt special decrees in the field of economics in response to possible threats to America's national security [6, p. 55].
Numerous executive orders of the President of the United States can be attributed to a special part, the expert explains. The deci-
sions of the OFAC (Office of Foreign Assets Control of the U.S. Department of the Treasury) and other authorized bodies are also law enforcement acts.
According to Vasily Malinin, a partner at the law firm Rustam Kurmaev and Partners, the main act of the US President is Directive № 2 - Blocking Property With Respect To Specified Harmful Foreign Activities of the Government of the Russian Federation ("Blocking property in connection with the specified dangerous foreign activities of the government of the Russian Federation") [7]. It was accepted by President Joseph Biden on April 15, 2021. But, as follows from the text of the directive, its adoption was primarily due to Russian cyber-attacks, which, according to the American authorities, took place on the eve of the US elections [7].
From the point of view of EU legislation, the legal basis for sanctions against individuals and legal entities is the Regulation of the Council of the EU of 17.03.2014 № 269/2014 «On restrictive measures against actions undermining or endangering the territorial integrity, sovereignty and independence of Ukraine» [8, p. 113]. As Teymur Agayev, partner at ASTEY Law firm, puts it, this document is valid directly for all EU member states without additional regulations and court decisions [8, p. 116].
According to Daniil Anisimov, a lawyer at S&K Vertical, Italian law enforcement agencies acted on the basis of Legislative Decree № 109 of Italy dated 06/22/2007 [8, p. 120], which provides for measures to "prevent and suppress the financing of terrorism and the activities of countries that threaten international peace and security" [9, p. 35].
According to Article 12 of this document, assets are transferred to the custody of the State Property Agency, which must ensure not only the storage of this property, but also, if necessary, its management. The Agency appoints an administrator with management and accounting skills to do this. According to Malinin, the sanctions measures taken do not correspond to an understanding of the legal nature of preliminary interim measures [10].
From the point of view of institutions of procedural law, such as interim measures, it is difficult to explain these sanctions. The assets
being frozen are not in themselves the subject of dispute, much less the subject of legal proceedings. It is also unclear whether this property can be subject to foreclosure. This indicates a different legal nature of the sanctioned freezing of assets, which is clearly different from the well-known procedural institutions.
Marat Samarsky, a lawyer at BGP Litigation, is confident that sanctions cannot be compared with interim measures and any other legal measures [10].
In the "narrow" sense, sanctions are not a legal instrument. It is a foreign policy tool aimed at possible behavior change on the part of individuals. Therefore, sanctions can be considered as an instrument of political pressure.
According to Teymur Agayev, the legal nature of asset freezing is a debatable issue, since this measure is primarily due to political goals and is designed to influence key individuals who are a party to an international conflict. When imposing sanctions, it is assumed that their addressees, having experienced the consequences of freezing assets, will influence the power of their state, so that eventually one or another political decision necessary for those who apply such measures will be made [11].
In the Russian Federation, there are no obstacles to the adoption of regulatory legal acts imposing sanctions, "counter-sanctions" or other similar measures. A well-known example of counter-sanctions is the ban on Russian individuals importing and selling certain types of agricultural products from the EU in the Russian Federation.
According to J. Tomashevskaya [12, p. 57], such restrictions can also include the provisions of Federal Law № 272-FL dated 12/28/2012 "On measures to influence persons involved in violations of fundamental human rights and freedoms, the rights and freedoms of citizens of the Russian Federation" [13, p. 34].
According to Article 1 of this act, measures to influence persons involved in violations of human rights and freedoms include the arrest on the territory of the Russian Federation of financial and other assets of U.S. citizens who are prohibited from entering Russia, as well as a ban on any transac-
tions with the property and investments of these citizens. From March 15, 2022, such measures can be applied to all other foreign citizens.
Also, according to Federal Law № 281 dated 12/30/2006 "On Special Economic Measures and Coercive Measures" [13, p. 46], the Russian authorities may prohibit foreign states, organizations and citizens from making financial transactions, as well as carrying out other actions on the territory of the Russian Federation. All these restrictions, in fact, can be used as counter-sanctions in response to the actions of foreign states that have seized the assets of Russian citizens and companies, explains Kristina Seveeva, lawyer, K.A. Kovalev, Tugushi and partners [14].
According to Alexander Kukuyev, European sanctions, which provide for the blocking of citizens' assets, may conflict with the norms of the Charter of the European Union on Human Rights [15, p. 67]. According to Article 17 of the Charter, every person has the right to own property that he has acquired legally and no one can be deprived of his property, except for reasons of public benefit and on legitimate grounds [16].
Similar provisions are contained in the European Convention on Human Rights [17, p. 141]. In accordance with Article 1, every natural or legal person has the right to respect for property and no one can be deprived of their property except in the interests of society and under the conditions provided for by law.
According to Ilnar Abdulov [18], Senior Associate at Kovalev, Tugushi and Partners, the EU bases its sanctions on Articles 21 and 29 of the Treaty on the European Union [19, p. 23]. Article 21 of the treaty contains common values that must be protected by EU members. These include maintaining peace, supporting democracy, and international security. Sanctions are usually applied to individuals who, in the opinion of the EU, undermine or threaten the values of International Law. At the same time, the EU Council recognizes that sanctions may also apply to persons associated with those responsible for illegal actions of States. Such a position can be found, for example, in the decision of the EU Council of 17.03.2014 2014/145/CFSP [20].
As Zhanna Tomashevskaya notes [21], such measures formally do not comply with international documents, but International Law also includes general norms that are not reflected on paper. The expert gives an example of the concept of "soft law" or the principles of erga omnes (obligations of countries to the entire world community). From this point of view, unilateral measures taken by a collective of countries can be recognized as consistent with international law, To-mashevskaya believes.
Thus, a number of countries led by the United States, as well as organizations such as the WTO, the IMF and the World Bank, become one with military blocs and wage war with undesirable and inconvenient countries.
Ursula von der Leyen said that the European Union is looking for legal grounds for the seizure of Russian assets, thereby admitting their absence. Thus, it turns out that there is no regulatory framework for the legalization of illegal actions by the West, and the sanctions actions are a conspiracy by a number of states to illegally withdraw funds from our country in order to intentionally cause material and moral damage to the Russian Federation.
Dmitry Medvedev called such behavior by Western partners "legalization of robbery at the interstate level" and said that Russia "will have to seize" the property of foreign companies from unfriendly countries if these countries decide to confiscate Russian assets.
"If national acts on the theft of Russian assets are adopted, we will have no choice. It will be necessary to irrevocably withdraw money and property from private investors from such countries, although they are not responsible for fools from their governments," Medvedev wrote on his microblog.
In response to the freezing of Russian assets in the West, the Bank of Russia blocked funds from foreign investors in the amount of about $500 billion [22].
As Vyacheslav Volodin puts it the central bank has banned foreign investors from withdrawing funds from our financial system as a retaliatory measure.
He added that Russian business, buying out assets of outgoing Western companies, acts "in a civilized manner", in accordance
with international law, "which cannot be said about a number of unfriendly countries that are engaged in theft."
Payments on corporate debt of Russian companies and government debt to debt holders from countries that support sanctions against Russia will take place only with the permission of the government commission.
Nevertheless, on November 14, the UN General Assembly, by a majority vote, adopted a draft resolution on compensation for damage to Kiev. However, it is of a recommendatory nature. According to TASS, the document states that "it is necessary to create a mechanism for compensation of losses" [23].
Moscow stated that the document "does not stand up to legal criticism" and is "an insignificant attempt to legalize what is illegal from the point of view of international law." Representatives of the Federal Assembly, in turn, were skeptical about the resolution. Thus, Deputy Speaker of the Federation Council Konstantin Kosachev stressed that this document is "legally null and void" and contradicts the UN Charter.
All countries of the world have already drawn conclusions about the behavior of the West. For other states, it is obvious that any other country can suffer next in such conditions.
Thus, China has already begun preparations for possible attempts to deal with its assets in the same way as with Russian ones.
These actions of unfriendly countries have nothing to do with International Law and are based not on the law, but on the "rules-based order". However, some Western elites are afraid of Russia's retaliatory actions, comparing future problems with the opening of Pandora's box. All this can lead to the collapse of the global financial system, violate the "sacred" right of ownership.
And Russia is beginning to send appropriate signals to the collective West.
The seizure of assets and real estate of the American financial conglomerate JPMorgan Chase in Russia caused such a shock in the West that not a single business media outlet in the European Union and the United States even reported on this event.
According to the decision taken by the Ar- owned by the German concern Uniper and bitration Court of St. Petersburg and the Len- 98.23% of Fortum shares owned by the Finningrad Region, Russia seized an amount that ish Fortum group were transferred to the tem-is insignificant for such a giant as JPMorgan: porary management of the Federal Property $439.5 million (40.4 billion rubles) in ac- Management Agency. The measure was taken counts, plus real estate in Russia. But the very in response to the unfriendly actions of a fact that Russia did this to the most powerful number of states against Russia. financial player in the United States, and it Such retaliatory measures taken by the
won't get anything for it, upset the West. leadership of our country are taken to cool the
According to the Decree of the President hotheads of some short-sighted politicians of the Russian Federation dated 04/25/2024 who act not with accordance of International № 302 "On the temporary management of Law but with their own interests and ambi-certain Property", 83.73% of Unipro shares tions.
References
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АРЕСТ РОССИЙСКОГО ИМУЩЕСТВА ЗА РУБЕЖОМ М.В. Попкова, студент
Научный руководитель: А.П. Панин, канд. экон. наук, доцент Калужский институт (филиал) ВГУЮ (РПА Минюста России) (Россия, г. Калуга)
Аннотация. Современная политическая ситуация в мире складывается негативным образом и оказывает влияние на многие сферы деятельности и отношения между государствами. Политические деятели и официальные представители ряда стран пытаются указывать другим государствам их путь, напрямую мешают реализации интересов других народов, в частности в области экономики. Такие «недобросовестные» мировые игроки используют шантаж, агрессивные высказывания и т.д. В данной статье делается попытка проанализировать случаи положительного влияния и отрицательного вмешательства политики в экономическую сферу и охватить мнения экспертов о легитимности такого вмешательства.
Ключевые слова: российское имущество, санкции, политика, политико-экономические отношения, экономическая сфера, законодательство, международное право.
