Allocate frozen Russian assets to Ukraine Now!

In the light of the Dnepro apartment bombing I again ask how come none of the $400bn in Russian frozen assets in the West have been transferred to Ukraine?

And, in particular, why are the U.K. and US Treasuries not doing more to make this happen?

Indeed, are they actually working to stall this, hiding behind obtuse theoretical legal arguments which no longer stand the test of the hard geopolitical reality? Russia is at war with Ukraine, and the West. Wake up.

This money should be paid to Ukraine because:

First, maybe if Russia thought it would be paying for the destruction and war crimes it is carrying out in Ukraine thru the confiscation and allocation to Ukraine of frozen assets then it would be less eager to wrought such actions.

Second, is there really any doubt that Russia is responsible? How much video evidence do you need of Russian missile attacks on innocent Ukrainian targets, even illegitimate military targets. This is an illegal attack on Ukraine, an independent sovereign state. How is it otherwise? Explain please.

Third, Western taxpayers will not pay the hundreds of billions of dollars in Ukraine reconstruction costs - why should they when $400bn in Russian assets is available? So the question is who is going to pay?

Sure, the argument goes that any peace deal with Russia in the future will include a requirement for reparations. But this assumes such a peace deal, and agreement with Russia, which is not clear. And even assuming any such peace deal, how long before any such reparations are paid? Fives years, ten? Ukraine simply cannot wait that long. So who pays in the interim? And what happens if no such monies for reconstruction are forthcoming? Without succesful reconstruction, how will Ukraine be able to defend itself, and surely here there are bigger things in the mix here, like the defence of Europe and the West in general against an expansionist and aggressive actor in Russia.

And don’t give me the bull about the implications this transfer would have for protection of private property or sovereign immunity on the West. 

The article below explains the reasons not to allow the transfer of frozen Russian assets.

https://foreignpolicy.com/2023/01/13/putin-sanctions-oligarchs-freeze-seize-assets/

Suffice to say, I totally disagree, and detail my arguments as below:

a) The money has already been frozen, so the message to states like China, the Gulf or Iran is already clear. If you have assets in the West and plan to be a bad global actor, your assets are at risk - as they should be. So don’t be a bad global actor. In any event I would argue that a weight of these assets have already left.

I would also say that the bar for assets of the likes of Gulf states or China to be frozen, seized and transferrred to another country, is likely to be much higher than is the case for Russia. Arguably for a decade or so, Russia’s position as a malign actor against the West has been clear. Since Crimea at least there has been a track record of  malign Russian actions and Western sanctions on Russia. The direction of travel has been clear. Russian leverage to stall such a sanctions rollout, including asset freezes, was much diminished by its actions. When it comes to others, including Turkey, and the Gulf dates, they still have significant leverage when it comes to economic and geopolitical importance to the West to ensure that sanctions/asset freezes are still some way off - and I think there governments realise this. They are still viewed as partners of the West - hence the West I think would be careful not to push thru asset freezes and confiscations which could force such states into opposing camps.

China less so, but it’s shear weight now in global capital markets will likely ensure that the West will tread carefully, barring a full scale invasion of Taiwan. But on the latter, perhaps acting to ensure assets are frozen and then transferred to the injured party, would be an additional deterrent on China to act in the case of Taiwan.

b) I don’t think the sovereign immunity defence should be used when it comes to a state like Russia conducting war crimes and genocide against another state, like Ukraine. 

Transferring the assets from Russia to Ukraine would actually send a clear message to other states contemplating such actions not to do it.

c) Its not an attack on private property rights - Russia is the state destroying property, stealing land and property and literally driving a tank thru private property rights. Wake up! And I have spoken to so many market participants and no one I have met opposes the transfer of these assets to Ukraine - everyone I speak to, aside from those in our sovereign Treasuries, say the assets should be taken from Russia and given to Ukraine.

Just think how would we would react now to Nazi Germany? Russia is doing exactly the same. Did we learn nothing from WW2? If we don’t allocate these assets, then the answer is no.

d) Elizabeth Braw does make the case that seizing Russian assets leaves Western business in foreign jurisdictions vulnerable to tit for tat action by Russia and other such malign actors.

Yes, we have already seen this by Russia, acting against Western business in Russia.

But Western business operating in Russia should have seen the risks here years in the offing. Russian malign actions have been evident since at least the Russian invasion of Georgia in 2008. And it has got much worse since then. Western private business made their own risk assessments and frankly those still operating in Russia on February 22, 2022, got these wrong, wrong, wrong. They even failed to listen to their own governments warnings thru the course of 2022, thinking they knew better. Why should Western governments seek to moderate their own actions against Russia, driven by what should be their own strategic interests, because they should somehow consider the interests of private sector business which made bad calls? Remember here that Putin says openly that he considers Russia to be at war with the West, this is serious stuff, we are in a state of conflict between systems: Western liberal market democracy versus autocracy, and is Bray et al, saying the West should pull its punches to bailout private business on their poor geopolitical calls?

In summary, the case for allocating frozen Russian assets to Ukraine is compelling in my mind. The need is now, delay would increase the chances that Russia succeeds in its illegal war in Ukraine. Western Treasuries need to stop their opposition and foot dragging, and just get this done. Putin has openly declared war the West, our governments need to wake up to this fact, and take the gloves off to ensure Ukraine is succesful in defeating Russia as our own best first line of defence. Ukraine cannot be successful in defence and then recovery unless it is guaranteed the funds to succeed. Unless Western taxpayers are going to write big cheques, the only alternative source of funding is the $400bn in frozen Russian assets.