Weaning mechanism: London has stepped up attempts to steal Russian assets
The issue of confiscation of frozen Russian funds has become more frequently discussed in British political circles, the Russian Embassy told Izvestia. Thus, London is trying to find ways to cover the cost of supporting Ukraine while the United States shifts Kiev's financing to Europe. Discussions are also underway in the kingdom's parliament, a member of the House of Lords confirmed, although there are a majority of opponents of the withdrawal of funds. At the same time, London refuses to engage in dialogue with Moscow, Russian diplomats emphasize. Whether there is a real mechanism for withdrawing funds and whether the British authorities will go for it is in the Izvestia article.
UK is looking for ways to take Russian assets
Amid the ongoing conflict in Ukraine, discussions have intensified in Western countries about how to steal Russian assets in order to finance Kiev's needs at their expense. Moreover, we are talking about using the funds themselves, not the income from them. The percentage scheme has already been used before. In particular, in May of this year, the European Union transferred €1 billion to Ukraine in this way. This is also actively practiced in the UK. At the end of June, Prime Minister Keir Starmer used £70 million from interest to send 350 advanced air defense missiles to Kiev. "It is right that we use the confiscated Russian assets to strengthen Ukraine's air defense. Ukraine's security is vital to our own," the British politician said at the time.
It is hardly possible to resolve this issue through diplomacy. The British authorities have never expressed any interest in a dialogue with the Russian Federation regarding Russian state assets blocked in their jurisdiction, as well as in other Seven countries, the embassy in London told Izvestia.
— In the official filing, as far as we understand, the fate of these funds is linked under false pretexts to the issue of financing the post-conflict "reconstruction" of Ukraine. However, recently, the discussion on this issue, including through the efforts of some British officials, has increasingly revolved around the option of banal withdrawal of these funds without waiting for a peaceful settlement, under the hypocritical pretext of caring about Ukraine, but in fact, as it is easy to guess, to partially cover the costs incurred by Westerners to fuel Kiev's embezzlement. the regime," the diplomats say.
A debate on the confiscation of Russian assets is underway in the British parliament, Richard Balfe, a member of the House of Lords, told Izvestia. According to the politician, there is a group of people who are more interested in "embarrassing" Russia than acting within the law.
— There is a lot of debate on this topic. Some people, including me, claim that we cannot confiscate the money deposited in our banks, as it was deposited there in good faith. More importantly, if we do this, it will permanently destroy the integrity of the banking system. By this action, we are sending a signal to everyone never to keep money in British banks, because it can be stolen by the state," Richard Balfe said.
According to him, the majority in the banking community agrees that such a decision will negatively affect the reputation of British financial institutions. By the way, there is a minority of supporters of confiscation among parliamentarians, and they have not thought out how to do this.
The need to find new schemes for withdrawing Russian funds has intensified after Donald Trump's statements. The US president decided to supply weapons to Ukraine, but Europe should pay for them, according to the Republican's idea. Just a few days later, the first military alliance has already appeared on the other side of the Atlantic since the start of the special operation. On July 17, Great Britain and Germany signed a "historic" treaty of friendship and cooperation in the field of defense in London. In the very first paragraphs of the document, Russia is mentioned as the main reason for this.
What tools are used in the West?
So far, the UK has not developed any legal mechanism for seizing Russian assets. In 2023, a bill "On the confiscation of Russian state assets and support for Ukraine" was submitted to the lower house of the kingdom's parliament, but its consideration was put on hold.
However, such mechanisms already exist in other countries, says RIAC Program Director Ivan Timofeev.
—Canada has legislation that makes it possible, at the request of the Ministry of Foreign Affairs and by court order, to confiscate a sovereign or private Russian asset and transfer it to Ukraine," the expert says.
Canada was the first Western country to try to create an asset confiscation mechanism in order to transfer its experience to Europe. It is there that the majority of Russian assets (about $210 billion) are concentrated. Currently, the country is discussing a plan according to which Ottawa will be able to require local banks to freeze transactions on accounts of persons subject to Western sanctions, and then make a decision by the federal government to send funds from these accounts to Ukraine.
— There is a mechanism of the European Union, where interest from income from sovereign assets is confiscated, not private, but sovereign, this is important. There is an American mechanism that allows the use of sovereign assets, as well as assets in criminal cases, and they can also be transferred to Ukraine. So, in principle, the UK can also do this. But they don't have a legal mechanism yet," the expert continues.
For now, London can continue to act through private or targeted measures.
— For example, they can continue to work through the national Agency for combating crime, when assets of private individuals are confiscated as part of the so—called fight against money laundering, - said Ekaterina Arapova, Deputy dean of the Faculty of International Relations at MGIMO of the Ministry of Foreign Affairs of the Russian Federation.
However, the embassy emphasizes the ineffectiveness of sanctions decisions.
— Britain has long lacked sufficient economic potential and influence to seriously harm Russia. Secondly, the Russian banking system and economic operators have adapted to the restrictions imposed by Westerners and have been successfully operating in these conditions for several years. Active sanctions activities are aimed rather at the inner man in the street to maintain the illusion of an external threat," they explained.
As the embassy emphasizes, "it is easier to convince ordinary Britons to tighten their belts and ignore the failures of the authorities in the socio-economic field."
How can Russia respond to the UK's actions
Nevertheless, specific practical actions by the UK to confiscate Russian assets are unlikely, Ekaterina Arapova is confident.
— They are well aware that if the legal side is not properly worked out, then these British banks themselves will face lawsuits in international arbitration. There is a fairly strong banking lobby in the UK that puts pressure on the authorities to prevent such measures without proper legal justification," the expert said.
London is also afraid of Russia's retaliatory measures. If our assets in the UK are concentrated in the amount of about $25 billion, then the British assets in the Russian Federation are not much less — about $18-20 billion. Accordingly, Moscow may apply mirror measures that will cause serious damage to British companies.
— Our position on this issue, in turn, has been and remains unchanged. Russia has full ownership rights over its sovereign reserves. Any attempts on our funds will be met with harsh retaliatory measures aimed at protecting our legitimate rights and interests," the Russian Embassy in the UK said.
However, the Russian Federation is already considering the possibility of seizing the assets of residents of unfriendly countries who unreasonably confiscated Russian property. And in May 2024, Vladimir Putin signed a decree that provides for compensation in the event of "unjustified deprivation of Russian copyright holders of property rights" in connection with "unfriendly and contrary to international law actions by the United States." The damage can be compensated through the court at the expense of the property of the States or American persons in Russia, including securities, shares in the capital of legal entities of the Russian Federation and property rights.
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