Baltics and Slovakia: Let’s use Russian frozen assets for Ukraine reconstruction

Estonia, Latvia, Lithuania and Slovakia Tuesday called for using Russian frozen assets — both state assets and property of sanctioned oligarchs — for the reconstruction of Ukraine.

In a written statement shared with EU finance ministers meeting in Brussels Tuesday and obtained by POLITICO, the four countries call on the EU and other countries to “enforce an international war-compensation mechanism, by using Russian assets to finance reconstruction of Ukraine.” The Commission must “come forward with relevant proposals,” it added.

“It would be a wise decision and the right decision, because the aggressor must pay,” Lithuanian Finance Minister Gintarė Skaistė told reporters ahead of the finance ministers’ meeting.

“A substantial part of costs of rebuilding Ukraine, including compensation for victims of the Russian military aggression, must be covered by Russia,” the four countries argued.

The “confiscation of state assets – such as central bank reserves or property of state-owned enterprises – has a direct link and effect in this regard,” they added.

Around $300 billion of foreign reserves of the Russian central bank are frozen in seven countries participating in sanctions against Moscow.

In addition, the assets belonging to sanctioned individuals should also be used for reconstruction of Ukraine, and on “sound legal grounds,” the four argued. Where such legal basis can’t be found, the countries propose holding on to the frozen assets to convince Russia to pay reparations: “It should be used as leverage and released only once Russia compensates Ukraine for all the damages done.”

The Commission is weighing proposals to let EU countries confiscate assets of Russian oligarchs frozen under the EU sanctions regime, as POLITICO first reported.

Commission Executive Vice President Valdis Dombrovskis confirmed Tuesday that the Commission is “assessing” the option of using Russian central bank assets. Regarding oligarchs’ assets, he said, “if there is an EU basis for confiscation, which needs to be done on the basis of criminal law in member states in which those assets are located, indeed those assets could also be used for reconstruction of Ukraine.”

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