Following Russia’s February 24 invasion of Ukraine, the United States, United Kingdom (UK), European Union (EU) and other countries unleashed a flood of targeted sanctions appointing Russian oligarchs, freezing their assets and prohibiting them from obtaining visas. The oligarchs – wealthy business leaders who have often built fortunes through proximity to the Russian state – are believed to provide resources to the Russian government for the illegal invasion and hold power in Russia. By freezing the assets of the oligarchs, the sanctions hamper their ability to do the former while incentivizing them to use the latter to help end the war.
Since the imposition of these sanctions, Western leaders have proposed to intensify these measures by seizing the assets frozen under the sanctions. British Secretary Michael Gove has suggested using the London properties of oligarchs for “humanitarian purposes”, while the US Department of Justice has created a new “KleptoCapture” task force. Italy, Spain, Switzerland and France have reportedly already seized several villas and yachts, and a slew of journalists and open source researchers have begun tracking and publishing the locations and properties of other yachts, private jets and luxury apartments, identifying assets. worldwide. This represents a notable increase in efforts to locate and freeze the well-protected assets of Russia’s elite, many of whom have availed themselves of complex multi-jurisdictional structures to anonymize assets and avoid the bite of sanctions. Some proposals have even been put forward to use these assets to finance reparations for the victims of this tragic war.
Victims of human rights violations and atrocity crimes have the right to truth, justice and reparations. Reparations, or reparation for irreparable harm caused by such violations, often take the form of monetary compensation paid from the perpetrators’ funds. They are desperately needed not only for Ukrainians enduring the Russian invasion, but also for the victims and survivors of Russia’s ongoing campaign in Syria.
Syria has served as a “proving ground” for the Russian war during its eleven-year civil war, and experts are now looking to Syria to predict how the current invasion will progress. Yet despite several ongoing legal proceedings, Syrians continue to face obstacles to obtaining meaningful reparations, including the escape of complicit Russian actors. Although there have been trials across Europe for Syria under the principle of universal jurisdiction, these trials have not resulted in significant damages. So far, it looks like justice efforts for Ukraine will also include universal jurisdiction cases, like Sweden, Germany and Spain have both opened investigations and may face similar hurdles. The International Criminal Court has also opened an investigation into crimes committed in Ukraine – an option repeatedly denied for Syria – and has the power to award reparations, but it has always encountered difficulties in implementing them.
Calls to target the assets of oligarchs for reparations seem to offer hope of supplementing these existing legal efforts with opportunities to obtain substantial reparations. However, the actions so far do not match the harsh rhetoric and such proposals should be viewed with caution.
Many oligarchs remain spared sanctions
London is a particular hot spot for the oligarchs, with around £1.5 billion ($1.9 billion) in assets belonging to Russians linked to the Kremlin or accused of corruption. However, despite recent British sanctions, many Russians with British assets have been able to avoid their effects. Some oligarchs were appointed by the United States long ago and have already found ways to operate through structures not vulnerable to sanctions. Meanwhile, other wealthy Russians have started moving their wealth to countries less likely to impose sanctions ahead of recent tranches of designations. In recent weeks, 25 private planes belonging to sensitive businessmen have landed in Tel Aviv, a ‘great exodus’ of private jets has stolen in Dubai, and several superyachts were stationed in the Maldives. Israeli Foreign Minister Yair Lapid has vowed to prevent oligarchs from using Israel as a means to circumvent sanctions and, although some oligarchs have left, many hold Israeli passports and banks have not received clear government guidelines on the management of sanctioned persons’ funds. As new sanctions arrive, the oligarchs will continue to restructure and reshuffle so that practical asset freezes remain limited.
Appointments of British oligarchs have minimal impact and are subject to legal challenges
The UK has designated a significant number of individuals and entities in relation to Russia. However, Russian oligarchs are notoriously contentious, which will require the UK government to have strong legal backing for any designations, especially those imposed on private businessmen who will challenge their links to the atrocities. Furthermore, the UK has already shown that it is unwilling to fully threaten its status as a dominating paradise for foreign wealthy individuals and has made efforts to soften the blow of designations by allowing exclusions such as license for a “thirty-day wind”. period of unavailability” before the entry into force of the sanctions of VTB Bank. This delay leaves time for the flight of assets, as almost happened – and can still happen – with the attempted sale of Chelsea football club by oligarch Roman Abramovich. While the UK will feel the need to be seen taking action in the face of horrific images and videos coming out of Ukraine – and to show that it is taking courageous and unprecedented action against Russian interests – it is likely to implement them in a way that minimizes the extent of their potential impact on the UK economy.
The asset freeze does not guarantee asset seizures
There is a huge legal chasm between the temporary restriction of ownership and the full reassignment of ownership. As seen in other sanctioned states, including Iran, Libya and Sudan, some countries have frozen vast sums for years and have citizens with meritorious claims, but their funds have largely failed. not been redistributed. The European Court of Justice has ruled that sanctioned assets cannot be automatically reallocated to creditors, even in the event of a final and binding judgment. Instead, the decision must be granted by national authorities and, therefore, is politically charged. Moreover, the wealth of the oligarchs is owned by individuals, either personally or through corporations, which would make it difficult to legally seize.
Any legal route to seize the assets would have to go through the relevant legal systems of the countries involved, which would likely require proving liability through time-consuming and expensive litigation. Even new legislation developed specifically for this situation, such as the “Ukrainian Reconstruction Asset Seizure Act” in the United States, is subject to the practical difficulties of tracing assets, establishing ownership and respect the required legal thresholds.
However, all hope is not lost. The consensus around the need to reallocate assets as reparations is to be applauded, and officials are already making efforts to bolster UK actions. The following policies can advance the goal of obtaining reparations without sacrificing the rights of defendants:
- States must commit to imposing targeted sanctions on relevant actors implicated in Russian atrocities, including in Syria. To this end, States should welcome contributions and seek advice from NGOs and experts. They should also commit to ensuring full transparency on the effects of targeted sanctions; for example, by publishing detailed information on assets frozen under the relevant regimes.
- States should coordinate multilateral sanctions designations to minimize evasion.
- States must provide sufficient funding to government departments charged with imposing and enforcing sanctions to adequately prepare for and defend against litigation.
- States should refrain from allowing non-essential exceptions to targeted sanctions designations, such as those created by granting licenses that would allow the flight of assets before sanctions take effect, as in the case VTB Bank and (potentially) the Chelsea Sale of Football Club’s license to liquidate, which would undermine the effects of the designations.
- States should enact legislation, such as that proposed in Canada, that establishes a legal pathway to seize and reallocate frozen assets under any human rights and corruption sanctioning authority (regardless of context). of the country) in reparation for the crimes concerned. This will provide efficient legal proceedings and protect the rights of defendants during these proceedings.
- Any policies to freeze, seize and reallocate the assets of Russian oligarchs as reparations must explicitly include provisions for Syrian victims of Russian violations to ensure that reparations are distributed fairly among different groups of victims and that victims of the same aggressor can be treated equally.
The possibility of awarding reparations to victims of Russian aggression would provide a glimmer of light for advocates of global justice and accountability. However, the steps taken to achieve these goals must be strategic and coordinated across continents, especially as they will lay the groundwork for similar actions in other conflicts. The international community has long awaited an overhaul of the legal tools available to victims of state-sponsored crimes in the 21st century. Perhaps the judicial mechanisms for Ukraine and Syria can thwart such impunity once and for all.
Jomana Qaddour is a Resident Senior Fellow at the Rafik Hariri Center and Middle East Programs, where she leads the Syria Project.
Celeste Kmiotek is a lawyer with the Strategic Litigation Project of the Rafik Hariri Center and Middle East Programs.