The idea of using frozen Russian billions to rebuild Ukraine has the support of politicians, including in Europe. But the implementation is legally complicated, says a specialized lawyer. Advocates include European Council President Charles Michel and former British Prime Minister Boris Johnson.
The US and Canada are already further along in the process. Legislation has recently been passed there allowing the state to confiscate Russian assets that have been frozen. A year ago, the British government froze some £18 billion in the assets of Russian oligarchs. The 27 member states of the European Union have seized about 300 billion euros in Russian money.
“The invasion of Ukraine is finally turning the attention of government leaders to oligarchs, tax avoiders and criminals who have parked their money in European cities,” said British investigative journalist Oliver Bullough. “We’re talking billions of pounds worth of Russian-owned property in London.”
It earned the British capital the nickname ‘Londongrad’. “Sanctions are not enough. We should use that capital to help Ukrainians rebuild their destroyed infrastructure, broken homes and shattered lives,” says Bullough.
He points to Witanhurst, the second largest private house in London after Buckingham Palace. The mansion with 25 bedrooms, an orangery and a large swimming pool is owned by the Russian businessman Andrey Guriev. The British government imposed sanctions on this fertilizer magnate and billionaire after the invasion of Ukraine.
Tours past ‘wrong’ buildings
Bullough has been delving into financial malpractice for years and has written the bestseller Moneyland – Why Thieves And Crooks Now Rule The World & How To Take It Back. Together with the Russian dissident Roman Borisovich, he organizes ‘klepto tours’ along ‘wrong’ buildings of oligarchs, which have largely been ‘frozen’ since the war.
The tour includes Athlone house, a Victorian villa in north London, with a five-hectare garden in the style of Versailles. Russian-Israeli billionaire Mikhail Fridman bought it for around £65 million, but after refurbishment and expansion, the property is now valued at around £130 million. And then there’s 5 Belgrave Square, a tens-million-dollar property in the heart of London bought by Russian oligarch Oleg Deripaska. That too has now been frozen.
“The only way these businessmen could get so rich in Russia is because they made deals with the Russian government,” says Roman Borisovich. “And that is also what connects them to the regime.”
Yet many legal experts warn that frozen property and bank balances cannot simply be confiscated. There is no legal basis for this, according to lawyer Michael O’Kane, who specializes in financial sanctions. One of the obstacles is property rights under the European Convention on Human Rights. The United Kingdom must also comply with this.
“The assets are frozen. But before you can expropriate you must prove that the assets were acquired through criminal means. Doing business in Russia was legal until the war started on February 24, 2022. Can you seize someone’s assets for activities that were previously considered legal were considered, and without evidence or legal process? You first have to prove that the assets were obtained through criminal means, and that becomes very difficult.”
There is another point to consider, says attorney O’Kane. “The idea behind sanctions is to change behavior. It’s a means, in this case, to put pressure on the Russian government. If you confiscate the property, what incentive or incentive is there left to change behavior? “
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