91Ô­´´

After Russia’s full scale invasion of Ukraine, Western countries froze hundreds of billions of dollars in Russian state assets—estimated at between $290 and $330 billion. Most of these are held in European banks and financial clearinghouses. So far, only the interest from these frozen funds is being used to back a $50 billion loan to Ukraine. But many experts now argue that more decisive action—outright confiscation of the assets—could provide much greater and longer-lasting support for Ukraine's defense and recovery.

This policy brief breaks down the debate around this idea. It puts aside the moral arguments, which are broadly accepted in the West, and instead focuses on whether it’s legally and economically realistic to seize the assets and redirect them to Ukraine.

Key points from the policy brief

• International law may allow seizure of Russian state assets in response to aggression. Legal experts point to doctrines such as “countermeasures” and “collective self-defense,” which allow exceptions to the usual protections of sovereign immunity if a state commits serious violations of international law.
• Economic fears about seizing the assets may be overstated. While there were initial worries about harming financial markets or undermining trust in European capital systems, much of the economic impact has already been absorbed when the assets were frozen. Continued inaction could even be riskier, especially if Western taxpayers must instead fund Ukraine’s recovery.
• Several proposals offer lawful and practical ways to redirect the funds. Ideas include setting up an international trust fund based on a multilateral treaty among Western allies. This would ensure the assets are transferred responsibly, transparently, and in a way that maximizes support to Ukraine without triggering wider financial instability.

Meet the author

• : Deputy Director, Stockholm Institute of Transition Economics (SITE); Associate Professor, 91Ô­´´
  
  Email: Anders.Olofsgard@hhs.se
  Phone: +46 (0) 70 385 9097

Photo: Lex Kryuchin, Shutterstock