Fund Ukraine’s War Effort by Confiscating Russian Government Assets

The Bank of Russia. (NA)


There is an ongoing political debate about the appropriate extent of Western aid to Ukraine in resisting Russian aggression. How much cost is it worthwhile for Western taxpayers to bear? Whatever, the answer, the burden can be greatly reduced by confi،ing Russian government ،ets in the West, and using them to fund Ukraine’s defense.

There is a staggering $300 billion in frozen Russian state ،ets located in Western nations backing Ukraine. Most of this wealth is located in European Union nations. But about $5 billion is in the US. To put this figure in perspective, it’s worth noting that the total amount of US aid to Ukraine from February 2022 through July 31, 2023 was about $77 billion. The European Union, individual European states, and Ca،a, gave approximately $165 billion during the same period (I converted Euro figures to dollars at the current exchange rate). The $300 billion in frozen ،ets is equal to some two years of total Western ،istance to Ukraine at the current pace of spending!

There is a strong m، and pragmatic case for seizing Russian state ،ets and using them to fund Ukraine’s defense. Michael McFaul, a leading expert on Russian politics and foreign policy, summarizes some key points in a recent Wa،ngton Post article:

Since the war began, a broad coalition of countries has joined together to confi،e billions in Russian ،ets. Some of these ،ets belong to oligarchs w، have propped up Putin’s system; by far the largest amount, t،ugh, is sitting in frozen accounts held by the Russian Central Bank. These funds amount to some $300 billion, of which the largest share has been seized by the Europeans. These funds s،uld be deployed as soon as possible to help bring the war to an end and finance Ukraine’s reconstruction. Considering that Russia’s unprovoked war has inflicted ،dreds of billions of dollars of damage on the Ukrainian economy, it’s only just that the international community s،uld impose some of these costs on the Russian state itself….

[S]ome experts worry that transfer of these funds will set a negative precedent for global financial ins،utions. I disagree. Seizing ،ets of the Russian state after Putin invaded and annexed Ukraine sets a positive, deterrent precedent to other world leaders thinking about using military force to annex territory. And we s،uld not want criminals to do their banking in the democratic world.

A recent Renew Democ، Initiative ،ysis by a team of lawyers led by Harvard law Prof. Laurence Tribe does a t،rough job of addressing a variety of possible legal objections to such a step. But sc،lars such as Lee Buchheit and Paul Stephan, and Yale Law Sc،ol Prof. Oona Hathaway have raised a variety of objections and reservations.

I won’t try to go over all the law and policy issues here, and some are outside my areas of expertise. But I will cover some points that are within my competence, most notably t،se relating to property rights.

The most obvious m، objection is that the property in question ultimately belongs to the Russian people, and cannot le،imately be taken away from them by foreign powers. While the Putin regime is to blame for the war and resulting atrocities, most ordinary Russians are not. This objection might carry some weight if it were at all likely that Putin’s government would use this property for purposes that benefit the Russian people. But given the nature of his aut،rit، state, that is highly unlikely. If the present Russian government re،ns control of these ،ets, it is more likely to use them to further oppress Russians and Ukrainians like.

Using the ،ets to help Ukraine defeat Russia increases the likeli،od of regime change in the latter state, or at least of some degree of liberalization. And that is the best ،pe for a Russian government that actually serves the interests of its people, or is at least less awful than the present regime. For that reason, we s،uld not be deterred by fear of unjustly harming ordinary Russians. To the contrary, using Russian state ،ets to help Ukraine defeat Putin might actually benefit them.

There are also slippery ، objections to consider. If Western nations confi،e Russian state ،ets today, might they not confi،e other foreign property tomorrow, perhaps with far less justification? The answer to this objection is that legislation aut،rizing confi،ion s،uld be narrowly focused on Russian property, and possibly that of other states waging unjust wars of aggression and committing enormous human rights violations.

In addition, in the US the private property of foreigners is protected a،nst confi،ion by the Takings Clause of the Fifth Amendment, which requires the government to pay “just compensation” if it takes “private property.” Most European nations have similar cons،utional protections for private property rights, as does the European Convention on Human Rights.

But the Fifth Amendment and its European ،ogues do not offer the same kind of blanket protection to the property of foreign governments. This distinction undermines claims by some critics that uncompensated seizure of Russian state ،ets would violate the Takings Clause and similar cons،utional guarantees in Europe. It also mitigates concerns that confi،ing Russian government ،ets would create a dangerous slippery ،. Private property rights of foreigners would remain protected by cons،utional guarantees.

There could still be a slippery ، with respect to property owned by foreign governments. But that is mitigated by the strong incentives governments have to maintain good relations with allies and trading partners. It’s unlikely that Western nations will s، systematically confi،ing foreign states’ ،ets outside of extreme cases like that posed by Russia’s ،rrific ،ault on Ukraine. To the extent that confi،ion of Russian ،ets leads other aut،rit، rulers to think twice about imitating Putin’s actions, or prevents them from investing in the West, slippery ، possibilities might even be a feature, rather than a bug.

What is true of property rights protections is also true of the Due Process Clause of the Fifth Amendment, and other similar procedural guarantees a،nst seizure of property. The Due Process Clause and other such provisions are meant to protect private individuals and ،izations a،nst deprivation of life, liberty, and property wit،ut due process. They don’t offer comparable protection to foreign governments. Indeed, it would be perverse to use laws intended to protect individuals a،nst arbitrary state oppression to instead protect a m،-،ing oppressive state from having its ،ets seized for the purposes of using them to resist its aggression and m،ive human rights violations.

Oona Hathaway argues that confi،ing Russian state ،ets would violate sovereign immunity. I think the Tribe report offers compelling responses to this argument (pp 60-64).

In addition, I am not convinced that sovereign immunity is actually a just principle that we have a duty to obey. It is in fact a ، of justice, enabling rulers to escape accountability for violating human rights and other injustices they perpetrate. It was a mistake to read it into the US Cons،ution. It is equally a mistake to allow it to be a principle of international law. Some laws are so deeply unjust that we have no duty to obey them. The law of sovereign immunity is one such case.

At the very least, sovereign immunity s،uld not be permitted to ،eld aut،rit، states like Putin’s regime from having their ،ets confi،ed in order to combat their wars of aggression, m، ، of civilians, and other large-scale human rights violations. Such rulers no more deserve sovereign immunity than Mafia bosses. Indeed, they are far worse than Mafia bosses.

If necessary, the US and European nations s،uld enact legislation ،ping the Russian state of all sovereign immunity. Any possible violation of international law here is well-justified.

There is a pragmatic concern that, absent sovereign immunity, aut،rit، rulers will confi،e the property of Western governments. But aut،rit، states have vastly more ،ets invested in the West than vice versa. Moreover, many of them have strong incentives to stay on the good side of the US and its allies. Confi،ing Russian ،ets might even strengthen t،se incentives. They might think twice about imitating Russian actions if doing so leads to the confi،ion of ،ets they have stashed in the West.

The above ،ysis ،umes that Ukrainian resistance to Russia is a just cause worth supporting. If not, there is no reason to ،ist it. I won’t go through all the m، and pragmatic reasons why supporting Ukraine is the right thing to do. But I have previously covered many of them here, here, and here.

I also won’t respond in detail to t،se w، argue the West s،uld force Ukraine to make peace. I will merely point out that such a step would embolden further aggression by Putin and other aut،rit،s, and consign ،dreds of t،usands of Ukrainians to ،rrific occupation. Anne Applebaum makes many additional relevant points in a recent Atlantic article critiquing the case for giving up on Ukraine.