Interaction of EU and EU Member State Laws in Relation to Frozen Russian Assets

• Pages: 30-46

LEX PORTUS VOL 11 ISS 3 2025

ISSN 2524-101X

eISSN 2617-541X

DOI 10.62821/lp11303

Interaction of EU and EU Member State Laws

in Relation to Frozen Russian Assets

Evhen Tsybulenko*, Liilia Mesila**

*Professor, Department of Law, Tallinn University of Technology (3, Akadeemia tee, Tallinn, Estonia) https://orcid.org/0000-0003-4977-9441

**Tallinn University of Technology (3, Akadeemia tee, Tallinn, Estonia) https://orcid.org/0009-0009-1249-6975

ABSTRACT

During the ongoing Russo-Ukrainian war, one of the key issues being discussed is the

reparation of damages caused by Russia in Ukraine. Given Russia’s refusal to voluntarily pay for

reparations, there have been proposals to conscate frozen Russian assets for the purpose of

rebuilding Ukraine. However, this approach is likely to raise several legal challenges that need to

be addressed or claried. Therefore, the aim of this article is to identify and analyze the main legal

issues related to the conscation of frozen Russian assets from the p erspectives of international

and European Union law, human rights, and local laws. Even though sovereign immunity

generally protects state assets from foreign jurisdiction, exceptions may apply in cases of

violations of international law. There is an ongoing debate from an international law perspective

over whether sovereign immunity should be overridden when a state engages in illegal military

actions. The use of frozen assets also raises human rights concerns, par ticularly around the

right to property, the presumption of innocence, and proportionality measures. Therefore, legal

safeguards need to be in place to protect individual rights during asset conscation. Additionally,

at the local level, many countries lack the legislative frameworks to suppor t conscating non-

criminal assets. In conclusion, while utilizing frozen Russian assets for Ukraine’s reconstruction is

a promising solution, the associated legal, ethical, and human rights challenges require careful

consideration to ensure fairness and legality.

CITATION

Tsybulenko, E., & Mesila. L. (2025).

Interaction of EU and EU Member

State Laws in Relation to Frozen

Russian Assets. Lex Portus, 11(3),

36–52. https://doi.org/10.62821/

lp11303

KEYWORDS

EU law, frozen assets, conscation,

reparations, Russo-Ukrainian war,

sanctions, sovereign immunity

The journal is licensed under a

Creative Commons Attribution-

NonCommercial-ShareAlike 4.0

International License

Introduction

The ongoing Russo-Ukrainian war, which started in 2014 and escalated into

a full-scale invasion in February 2022, has resulted in widespread destruction and

signicant violations of international law by the Russian Federation. Despite repeated

calls from the United Nations General Assembly (UNGA) to cease the hostilities against

civilian and civilian objects as well as International Court of Justice (ICJ) requests to

suspend the military operations (Webb, 2024, p. 2), as well as its previous rulings to

refrain from persecution (Tsybulenko & Platonova, 2019, p. 137), Russia has continued its

military aggression and disregard for international humanitarian norms. As of early 2024,

the damage to Ukraine’s infrastructure is estimated at over €145 billion (Kyiv School of

Economics, 2024), with costs continuing to rise.

In response, the international community has imposed extensive sanctions on Russia,

including the freezing of approximately 265 billion EUR of Russian assets held abroad.

These frozen assets – comprising both sovereign funds, such as those of the Central Bank

of Russia (CBR), and private holdings – have become central to discussions on how to

nance Ukraine’s reconstruction. Although asset freezing has traditionally been a temporary

measure, the prolonged and large-scale nature of the conict has led to a growing shift

toward the permanent conscation of those frozen assets. The G7 has proposed using

interest generated from immobilized CBR assets (European Commission, 2024) to back

loans for Ukraine, oering a legally cautious yet impactful mechanism for nancial support.

37LEX PORTUS VOL 11 ISS 3 2025

Meanwhile, countries like Canada, Estonia, and Poland have advanced legislative reforms to

enable the conscation and repurposing of frozen Russian assets for reparative purposes.

These developments raise critical legal questions regarding sovereign immunity, property

rights, and the use of conscation as a countermeasure under international law. As the war

continues and voluntary reparations from Russia remain unlikely, the debate over the lawful

and ethical use of frozen assets is becoming increasingly urgent.

The proposal to conscate frozen Russian assets for the purpose of funding

Ukraine’s reconstruction represents a novel and largely untested legal approach. This raises

a range of complex legal questions that require careful examination. Accordingly, this

article aims to explore the principal legal challenges associated with such conscation,

particularly from the perspectives of international law, European Union law, and human

rights law. A central focus is placed on the legal implications of extending conscation

measures to private assets, and whether such actions may conict with fundamental

rights such as the right to property, the presumption of innocence, and the principle of

proportionality. Given that Russian assets are frozen across multiple jurisdictions, the article

also investigates the legislative readiness of EU Member States to implement coordinated

conscation measures.

To address the above-noted issues, the article adopts an empirical research methodology,

supported by teleological interpretation. This approach enables a critical analysis of how

existing legal frameworks– both international and domestic – can be interpreted in light

of their broader objectives, such as promoting justice, accountability, and post-conict

recovery. The research also incorporates comparative legal analysis, examining recent

legislative developments in countries such as Canada, Estonia, and Poland, which have taken

proactive steps toward enabling the conscation of frozen Russian assets.

The article is structured as follows: Section I explains the legal distinction between asset

freezing and conscation, and how these mechanisms are intended to function. Section II

examines the principles of sovereign immunity and the legal protections aorded to state

assets and state ocials. Section III identies the key legal challenges associated with the

conscation of frozen Russian assets, including issues under international and EU law,

and potential conicts with human rights norms as well as evaluates the domestic legal

frameworks of selected EU Member States to identify obstacles to a unied approach to

asset conscation

1. Freezing and Usage of Conscated Assets

Freezing and conscation of criminal assets to prevent and combat corruption of state

and state ocials to support international cooperation, to promote integrity and proper

management of public aairs and public property is covered by the UN Convention against

Corruption (UNCAC), Article 1. UNCAC also, in Article 31, sets the measures that state parties

need to apply to enable the conscation of proceeds of crime. Orders to freeze and/or

conscate assets within the EU are governed by Council Regulation (EU) 2018/1805, which

establishes the rules for Member States to recognize and enforce freezing and conscation

orders within their territories. These are carried out through specic freezing (Article 4) and

conscation certicates (Article 14). How the freezing or conscation order is executed is

governed by the executing state, as instructed by Article 23. The relevant Council Regulations

implementing sanction restrictions outline the prohibitions and freezing requirements for

sanctioned entities, which are then enforced by Member States through national legislation.

For instance, in Estonia, the International Sanctions Act governs activities related to the

freezing of sanctioned assets (Riigikogu, 2024).