EU could be ‘disgraced’ by confiscating frozen Russian assets – Austrian FM

Top Austrian diplomat Alexander Schallenberg has warned that the EU could be disgraced if it were to illegally appropriate Russian assets

EU could be ‘disgraced’ by confiscating frozen Russian assets – Austrian FM

EU could be ‘disgraced’ by confiscating frozen Russian assets – Austrian FM

Alexander Schallenberg has argued that the bloc must find a ‘watertight’ legal case if it wants to appropriate Moscow’s funds

The EU must ensure it has a clear legal basis if it decides to confiscate frozen Russian assets and hand them over to Ukraine, Austrian Foreign Minister Alexander Schallenberg has warned. The diplomat argued that failure to do so would significantly tarnish the bloc’s reputation.

In an interview with Austrian broadcaster ORF published on Sunday, Schallenberg stressed that any such confiscation of Russian assets “must be watertight” from a legal viewpoint. He claimed that Austria and other EU members “are countries with the rule of law,” and that they must apply that approach in international relations. According to Schallenberg, this is one of the fundamental differences between Western European nations and Russia.

“Expropriation is a massive intervention, according to law,” the Austrian minister noted. “If we do this… as states with the rule of law we must make legal decisions,” Schallenberg insisted, adding that any such step could be challenged at the European Court of Justice in Luxembourg.

Should the appropriation of Russian assets not be deemed to have a legal basis, this would be an “enormous setback, and basically a disgrace” for the EU, the official concluded.

Regarding relations with Moscow in general, the minister said that geography dictates that Russia will remain part of European history, and that attempting to ‘cancel’ the country would be wrong. Schallenberg called for communication channels to remain intact, and claimed that emotions should not guide EU policies toward Russia.

Bloomberg reported last month that EU leaders had considered plans to impose a windfall tax on profits generated by more than €200 billion ($217 billion) of frozen Russian central bank assets to aid Ukraine’s reconstruction. While the option had reportedly appeared to be the least problematic, some participants had still raised concerns over its legality, Bloomberg claimed.

In mid-June, the European Central Bank spoke out against a windfall levy, warning that it could undermine confidence in the euro as a global currency and hurt financial stability.

Back in April, the European Commission ruled that member states could not seize frozen Russian assets outright. The EU and its allies froze hundreds of billions of euros of Russian central bank holdings as well as private assets soon after Moscow launched its military campaign against Ukraine in February of 2022. Russian officials have repeatedly described any seizure of the country’s assets as theft and illegal under international law.