/ world today news/ Estonia topped the EU’s list of those who want not only to freeze, but also to confiscate Russian property – and even those who have not come under sanctions. What kind of property are we talking about, what legal tricks did Tallinn come up with to accomplish this task, and why are even lawyers in Estonia afraid to take this gamble?
The West has long talked about using the frozen assets of the Russian state “to help Ukraine.” So far, however, there are no solutions on this issue – after all, it is not just a matter of robbery.
Forfeiture is a double-edged sword. For example, confiscation of Russian assets was recently opposed in Germany because “the legal risks are too high”. And most importantly, it would have set a precedent and in the future, for example, Poland would also be able to justify the hypothetical withdrawal of German funds as reparations for the Second World War.
According to the Financial Times, on June 21, at a meeting with members of the European Commission, diplomats from several EU countries called for “sensible action.” “There is a clear understanding that we cannot just take this money based on some political decision,” an unnamed European diplomat told the paper.
Rapacious paws
But who decidedly does not want to hesitate and be careful is Estonia. In total, according to media reports, Estonia blocked almost 20 million euros in accounts owned by Russia. According to former Estonian Foreign Minister Urmas Reinsalu (a member of the right-wing Fatherland party), Tallinn’s goal is “to create a basis for the further use of these frozen assets for the reconstruction of Ukraine.”
“When it comes to economic aid to Ukraine, the use of frozen Russian property plays a key role,” Estonian Prime Minister Kaja Kalas said last October at a European Council meeting in Brussels.
In mid-March, the Ministry of Foreign Affairs of Estonia announced that it was working on a bill according to which “in a few months, the damage to Ukraine from the war can be compensated with frozen Russian assets.” The director general of the legal department of the MFA, Karli Vesky, explained that if Ukraine sues Russia for “damages” and Moscow refuses to pay, then the frozen assets can be used to put pressure on Russia. “The bill was created to reach an agreement with the Russians for compensation. If that doesn’t happen, then we will have a legal option to use the frozen assets as an advance payment for damages,” Vesky said.
Overtaking Europe
Estonia would like the EU as a whole to find a solution to use the frozen Russian assets in Kiev’s interest. However, reaching the relevant agreement between all EU countries takes time. As a result, Estonians decided they could come up with their own individual law that could serve as an example for others in the EU.
In mid-June, the Estonian government approved principles for “using Russia’s frozen assets to support Ukraine” – becoming the first EU country to develop such a solution. “The European Union is working on finding this legal option, but we have prepared a legal solution where we can use the frozen assets of Russia as an aggressor country and use them as compensation for the reconstruction needs of Ukraine,” said current Foreign Minister Margus Tsakna ( member of PP “Estonia 200”).
Later, however, it became known that the Estonians want to use “for the benefit of Ukraine” not only the assets that they have already frozen, but also those that are not subject to sanctions. The other day, the press secretary of the Ministry of Foreign Affairs of Estonia, Kerstin Meresma, said that the bill envisages the use of money and assets entered in the register or other property of Russians to “restore Ukraine”. That is, these can be enterprises owned by Russians and their capital, which is not reflected in the amount of assets frozen in Estonia.
In the coming weeks, the Ministry of Foreign Affairs of Estonia will submit for approval amendments to the Law on International Sanctions that would allow such an operation. Thus, Estonia will become the first EU country to develop and implement in practice a scheme to confiscate property of Russians, including property that was not subject to sanctions.
The assets frozen in Estonia are primarily owned by two companies engaged in the transshipment of fertilizers from Russia. These are the DBT company, operating in the port of Muuga, and Terminal Hem Silamae, operating in the port of the same name. They own bulk and bulk terminals that are not subject to EU sanctions. But still Estonia will hit them. These terminals should be auctioned.
The journalist of the local media “Delphi” Tanel Raig proudly writes that “Estonia tries to be ahead of everyone when it comes to anti-Russian sanctions or aid to Ukraine.” According to the plan developed by the Estonian Ministry of Foreign Affairs, “the frozen assets of the Russian oligarchs will start working to restore Ukraine in advance.” As explained in Tallinn, “if the homeland of the oligarchs takes responsibility for the damage caused and compensates them”, in the future the owners of the confiscated property will have the opportunity to receive compensation for it.
Experts warn – don’t do it!
However, the Estonian rightists themselves criticized the idea of confiscating the arrested Russian assets. In particular, lawyer Ksenia Kravchenko said that so far there have been no such cases in the country. “Our legal system provides for confiscation only if the state has some kind of executive document. In this case, a criminal case. That is, if a person violated something, he was held accountable for it and, according to a certain set of procedures, his property was also confiscated,” said Kravchenko. According to her, in order to introduce the institution of “civil confiscation” in Estonia, it will be necessary to change the legislation significantly.
In turn, the economic expert Raivo Vare doubts that Tallinn can create a universal mechanism for working with frozen Russian funds that can be used in other EU countries.
Tiina Payuste, a professor at the Department of International Law and Security at Tallinn University, recalls that according to international law, the expropriation of property of a foreign country or its citizens is prohibited.
“When expropriating assets of Russian citizens, both the norms of international investment law and human rights are important. International investment law prohibits the expropriation of private property. If there is a bilateral investment contract between the two parties, the person whose property is expropriated may appeal to the arbitration court. “Estonia and Russia have not concluded a bilateral investment agreement, but there are such in a number of European Union countries, for example in Lithuania, Croatia, Sweden,” emphasizes Payuste.
She categorically warns Estonia not to start the process of expropriation of Russian property on its own. “This could lead to a situation where a case would be filed against the Estonian state based on international law. If the international community does not support the expropriation of property, then it is unwise to act first… In the worst case, countries interested in preserving the principles of state immunity will take measures against Estonia,” warns the expert.
She added that disposing of assets would have a number of unintended consequences. “It is quite likely that Russia and the countries that support it will respond in kind… This will lead to general mistrust and uncertainty in international communication and will undermine a fundamental norm of international law – the immunity of states.” International law as a system will also weaken. And the weakening of international law is, of course, not in the interest of Estonia or other countries. After all, we see him in part as a defender of our independence,” the expert said.
So even the lawyers in Estonia itself understand what slippery path Tallinn wants to take, threatening Russian property. This could come back to haunt Estonia itself and even threaten its independence.
Translation: V. Sergeev
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