The Legal Minefield: Why Seizing Russian Assets Could Backfire on the West

Whatever view you may take of the war in Ukraine, whether Russia is seen as an aggressor or as a state intervening after years of civil conflict, NATO expansion and geopolitical pressure, one fact remains unchanged: international law does not bend to moral narratives or political convenience.

Across Europe, governments are now considering the unprecedented seizure of Russian state assets to fund Ukraine’s war effort. This is being presented as justice, accountability, even necessity. But beneath the rhetoric lies a far more serious question, one that has little to do with Ukraine and everything to do with the future of international law itself.

Behind closed doors in Brussels, a quiet but consequential standoff is unfolding. Belgium, the reluctant custodian of the bulk of these frozen assets, has raised alarm about what such a move would mean for sovereign immunity and the legal order that governs relations between states. Once those rules are discarded for political expediency, they do not magically reassemble themselves later.

This article does not defend Russia, excuse war, or argue geopolitics. It asks a simpler and more dangerous question: what happens when powerful states decide that the law only applies when it is convenient?

Stephen Kelly, a Dublin-based solicitor, sets out why seizing Russian assets without an international court ruling would not only be unlawful, but could open a Pandora’s box the West may come to regret.

Belgium’s Stand: The Lonely Voice of Legal Reason

Current proposals to seize Russian state assets to fund Ukraine’s military needs sit at the core of a standoff between Belgium and most other EU member states. Belgium, where approximately €210 billion in assets are domiciled at the Euroclear clearinghouse, is resisting the move.

Belgium is correct.

No matter how much some may strain to rewrite international law, it is extremely unlikely that EU proposals would be upheld by an international court. The issues are not entirely new.

The Germany v Italy Precedent: When the Highest Court Spoke

In 2012, the International Court of Justice delivered its judgment in Germany v Italy. Elderly Italian victims of German wartime atrocities had successfully sued Germany for damages in Italian courts. When Germany refused to pay, a charge was registered against property in Italy owned by the German government. Germany then took Italy to court for violating German state immunity.

The International Court of Justice, despite noting agreement that the acts committed by German forces were criminal, sided with Germany. The Court drew a clear distinction between criminal acts for which an individual could be punished versus the ability to claim damages against a foreign government. Although state immunity did not shield German soldiers from war crimes prosecutions, it did protect German government property.

As a judgment from the world’s highest court, this represents the definitive statement on the subject. Indeed, Italy’s case was, if anything, stronger than the case European leaders are seeking to make for the seizure of Russian assets.

The “Collateral” Contrivance: Legal Innovation or Desperation?

The arguments on the pro-seizure side claim it could be lawful to seize Russian assets if they are treated as collateral for damages Russia allegedly owes Ukraine for the invasion, occupation costs, and war. If Russia makes good on these unspecified damages, the frozen Russian assets could be returned to Russia. Even though the EU is not a direct participant in the war, the bloc would supposedly be entitled to take this action as a “countermeasure” to pressure Russia to pay the damages it is said to owe.

The idea that Russian assets could be treated as collateral is a pure contrivance, extremely unlikely to convince any international court or tribunal. It is obvious this idea has simply been dreamt up by policymakers in a rather desperate attempt to make lawful something that would otherwise be unlawful.

A core principle of international law is that states act in good faith. In this regard, it could hardly be clearer that the real purpose of the asset seizure is to fund Ukraine’s war effort, something Article 2 of the text of the EU’s proposed regulation confirms. Incredibly, Article 13 of the draft even demands Ukraine use the monies it is loaned to give preferential treatment to the EU weapons industry.

If the purpose of this mechanism were to provide restitution for victims of wrongful acts committed by Russia, then the monies would go to civilians, families of soldiers killed, Ukrainian businesses, and others materially affected by the war. Whether or not they wished to use those sums to contribute to the war effort would be up to them.

The Hypothetical Damages Game: Convenient Calculations

Instead of clearly quantified sums, we are expected to accept a hypothesised sum that we supposedly know Russia would be ordered to pay in a hypothetical court case, even though no such order has actually been made. Nevertheless, we apparently know with certainty that this hypothesised sum is greater than or equal to €210 billion, being the value of Russian central bank assets that the EU is seeking to seize.

A most convenient coincidence!

Of course, those who seek to advance the collateral idea will devise various estimates. These are speculation, at best, educated speculation. As confirmed in Germany v Italy, national courts do not have the jurisdiction to order and enforce damages against another country, even where wrongdoing is conceded (and all indications are that Russia will strongly resist any claim for damages). Any such entitlement would need to be determined by an international court or ordered as a Chapter VII measure by the UN Security Council.

For obvious reasons, no such decision will be forthcoming from the UN Security Council. There is little case law from international courts in comparable situations. The EU Parliament’s analysis in 2024 concluded that $325 million was the highest such sum in damages awarded by the International Court of Justice (in the case of Congo (Kinshasa) v Uganda), a tiny fraction of the €210 billion in contention here.

The Precedent Trap: What Goes Around

If states take it upon themselves to decide what damages they or other countries are owed, based on hypothetical calculations of what a court might order, it risks rebounding on EU states themselves. As legal academic Ingrid Brunk has noted, the obligations Russia is accused of breaching are very broad. This precedent could put at risk the assets of many countries with chequered records of complying with their legal obligations.

The former Axis powers could be faced with strengthened claims for restitution, as has been called for by countries occupied in World War II such as Poland and Greece. Similar arguments could be made by countries who have been subject to Western interventions, Iraq, Libya, Afghanistan, and Serbia (then Yugoslavia).

Of particular note, extensive Western assets are held in China. Beijing may cite the EU seizure of Russian assets as a pretext for taking similar action against Western assets, not a realistic prospect at present, but one that could arise in the event of hostilities over the status of Taiwan.

International courts exist to ensure consistent treatment of international obligations and avoid precisely this kind of free-for-all.

The Moral Imperative vs. The Legal Reality Conclusion: Choose Your Battlefield Carefully

Few would deny that Russia’s invasion of Ukraine represents a grave violation of international law. The suffering inflicted on Ukrainian civilians and the destruction of Ukrainian infrastructure demand accountability. The moral case for making Russia pay is compelling.

But morality and legality are not the same thing. The international legal order, imperfect as it is, exists to prevent the strong from simply taking what they want from the weak. If the West abandons these principles when they prove inconvenient, what authority does it have to invoke them when its own interests are threatened? Belgium’s resistance is not an act of cowardice or Russian appeasement. It is a recognition that the rule of law matters, even when, especially when, upholding it is difficult.

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Stephen Kelly is a Dublin-based solicitor trained in an international law firm and practises in litigation. He has studied at Trinity College, Dublin, and the Law Society of Ireland. You can find him on X Stephen (Osal) Kelly and YouTube at @Untangling-the-Thread.

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The views expressed are solely those of the author and may or may not reflect those of Labour Heartlands