(Editor’s note: This article is part of Just Security’s Symposium, International Law in the Face of Russia’s Aggression in Ukraine: The View from Lviv.)
Shortly after Russia’s full-scale invasion in February 2022, the United Nations Development Program (UNDP) warned that if the aggression drags on it could wreck almost two decades of economic progress, risking a “freefall into poverty” for as much as 90 per cent of the country. Russia’s campaign of aggression has now dragged on for two and a half long years. Fortunately, the UNDP’s dire prognosis has not been fulfilled. With the help of foreign assistance and Ukraine’s internal mobilization, Ukraine’s economy has survived. But it is clear that the longer the war lasts, the harder it is to imagine the new economic and social reality Ukraine will be living in.
Ukrainian businesses and individuals are turning to national and foreign courts as a mechanism for the protection of their rights and compensation for damage done to civilian property and infrastructure, which has been extensively documented. The roles of both the judiciary and the Register of Damage for Ukraine is undoubtedly important, but getting redress through compensation mechanisms and/or courts, both national and foreign, is limited, as was discussed by the participants of the roundtable “Making Russia Pay” during the December 2023 Summit in Lviv. Moreover, individual legal actions are not capable of changing Russia’s disastrous policy towards Ukraine. What can be done to deter Russia from further destruction of Ukraine’s statehood?
Seizing Frozen Russian Assets: The Right or Wrong Answer?
The views of international lawyers are sharply divided as to whether seizure of frozen Russian central bank assets is a legally and politically sound policy to make Russia stop and bear the costs of its unprovoked war.
Seizing sovereign assets is typically illegal because doing so disrespects the sovereignty of another State, but when applied as a countermeasure, either individually or collectively, aimed at inducing compliance with peremptory norms of international law or to ensure enforcement of the duty to compensate, such seizures may sometimes be excused from the international legal responsibility.
Among international lawyers who believe that seizure of Russian central bank assets is the wrong answer to Ukraine’s struggle, three common arguments include: First, that the whole point of countermeasures is to persuade the wrongdoing State to stop breaking the law and Russia has made it clear it is not going to stop; waiting for negotiations with Russia and keeping assets frozen as a future leverage is a better way to make the frozen assets work to help Ukraine. Second, that seizing sovereign assets as countermeasures would violate international law since not all requitements – such as reversibility – can be met. And third, that the seizure will undermine the international legal legitimacy – Ukraine’s greatest asset – since the exceptionalism of this policy in Ukraine’s case does little to confront the selectivity in enforcing international law violations and boost confidence in the international legal order.
The Ukrainian government rejected these arguments against countermeasures as “radical formalism.” A group of reputable international lawyers argued persuasively how invocation of countermeasures in the form of re-titling Russia’s sovereign assets would be legally straightforward. Both Ukrainian and Western international lawyers who argue for the lawfulness of such step note it is a question of political will hiding behind needlessly complicated legal arguments. For the reasons outlined below, I take this view as well. Before turning to the legal and policy arguments, however, it is also worth considering why asset seizure is such a potential powerful countermeasure in this case and, from a practical purpose, consistent with the purposes of international law and the protection of sovereignty.
Inducement to Comply
Since freezing of Russian central bank assets – already an unprecedented collective countermeasure – did not stop Putin, what difference will seizure of those assets make? This argument presupposes that Putin has already signed off these assets in his mind.
The fallacy of this argument lies in its assumption that what is important is whether assets seizure will make Russia more vulnerable economically and, therefore, more willing to negotiate. Indeed, Russia’s economy turned out to be more resilient than hoped by Ukraine and its allies; Russia does not seem desperate to get its frozen funds back. From the Ukrainian perspective, what is missed, however, is that it is not the well-being of Russia itself, but the unequal power relations between Ukraine and Russia. This is what guides Russia in its assessment of how far and for how long it can go with the aggressive campaign to force Ukraine knuckle under. Russia has a population three times and an economy ten times the size of Ukraine’s. Ukraine’s ability to conduct military actions on Russia’s territory is limited. Russia’s authoritarian form of government makes it possible not to care much about huge costs this war had and will have on Russia’s population. In short, Russia’s war against Ukraine does not nearly affect it as much as it affects Ukraine.
This assumption, therefore, ignores how the availability of those assets to Ukraine will significantly reduce the vulnerability of Ukraine vis-à-vis Russia. Strengthening Ukraine economically will secure its future as an independent State. Although Putin cynically claims that Russia is waging war against the West and NATO, it wants to avoid a direct confrontation. The fundamental assumption on which Russia relies is that the West will not directly intervene in the war. It should surprise no one, then, that Russian leadership shows few signs of stopping or negotiating the end of hostilities. Why would it? As long as the West’s response meets Russia’s calculations and predictions, and it does, its leadership will remain confident it will ultimately be able to finish the war on its terms: the subjugation of Ukraine or destruction of its economic and political potential for generations. Either scenario will work for Putin.
War is about calculations. Russia’s leadership made a huge miscalculation of Ukraine’s level of resistance and its partners’ resolve when it started this war, but after the initial shock it mobilized and prepared for a war of attrition. Collective countermeasures in the form of seizing Russia’s frozen assets have the potential to change the factual asymmetry between two formally equal sovereign States. It will make Ukraine less dependent on foreign aid and production capacity. This may change Russia’s calculations on its gains in continuing the war and open the door for good faith negotiations Ukraine never excluded from the agenda.
The strategy of keeping the ongoing freeze when the war is over and using it as a leverage to make Russia agree to meet its international obligation to provide reparations harbors an image of Russia which does not correspond to reality. Russia under current leadership will never agree to compensate Ukraine because doing so would acknowledge the wrongfulness of its aggressive policies. Unless the political climate changes radically in Russia, this strategy only postpones debates about the same legal and policy considerations Ukraine’s Western allies will have to confront.
“Radical Formalism” in the Two Mutually Exclusive Sovereign Claims: Whose Sovereignty?
To safeguard the application of countermeasures from sliding into uncontrolled coercion in foreign relations, drafters of the ILC Articles came up with procedural and substantive requirements for the parties to the controversy to follow to ensure this regime is not abused. For countermeasures to be lawful they have to be temporary, proportionate, and reversible “as far as possible.” Each requirement is meant to ensure that parties invoking countermeasures should pay reciprocal regards to each other’s sovereignty in order to be able to resume their mutual obligations.
If the proportionality requirement – often the most controversial one – is rarely debated as a criterion that cannot be met in this particular case, the reversibility of such measures is flagged as a serious legal obstacle. Those who advocate against seizing assets as a lawful countermeasure insist that by the end of the conflict the countermeasures are supposed to be reversed and “everyone goes back to following the law.” Seizures of sovereign assets cannot be reversed, however, since once retitled the frozen assets are gone forever, the argument goes.
This argument focuses on assets themselves in assessing whether the reversibility requirement can be met as opposed to suspension of sovereign immunity rights as the target of countermeasures. It also relies on the logic behind the criterion of reversibility of countermeasures which lies in keeping open a path to resuming the status quo ante in relations between sovereign States. Following the requirement is especially important when parties sometimes dispute whether the primary obligation of international law exists or has taken place. While a commitment to reciprocity and respect among sovereigns is laudable in the abstract, in practice it only favors Russia today. Indeed, Russia’s flagrant violations of the fundamental principles of international law against Ukraine are straightforward, not seriously in dispute, and extremely grave. Ukraine needs to restore the status quo ante in its relations with Russia, and the path to that begins with ending Russia’s aggression and making good faith negotiations the only viable option.
Not only do arguments on the reversibility fail to address Russia’s refusal to treat Ukraine as a foreign sovereign, but they stand in the way of Ukraine receiving the support it needs to survive. Russia’s image in global affairs has deteriorated, it has become isolated (but not as universally as hoped for), its economy is underperforming, and its human resources have been squandered. Yet, Russia will likely remain on the geopolitical map of the world and, with its vast natural resources, bounce back relatively quickly once it returns to the global stage. But what will become of its victim, Ukraine?
Collective countermeasures are the effective legal mechanism for Ukraine to restore some balance vis-à-vis Russia. This balance must be restored as soon as possible. Although the cumulative strategy of pressuring Russia economically and militarily by Ukraine seems to work, Ukrainians cannot wait for a significant breakthrough on the battlefield to bring Russia to the negotiating table – the prevailing policy.
Reparations in Interstate Conflict are Rare for Most Victim States
The duty to compensate, while an important principle of international law, is rarely enforced by the victim States in interstate conflicts. The exceptional enforcement of the principle in Ukraine’s case will weaken international law, Ukraine’s unprecedented support and boost yet another series of “whataboutism” arguments on which Russia relies to mobilize its sympathizers. This argument has merit and deserves separate engagement. Suffice to say for the purposes of this contribution that, in the particular context of Ukraine, such argument unintentionally reinforces the injustices in the failure to enforce international law, rather than resolving them.
Ensuring that international law applies equally to all states is especially difficult in the situation of paralyzed Security Council and in the absence of controlling interpretation authority. In an increasingly multipolar world, self-restraint in international legal argumentation sometimes is undoubtedly needed. Poorly justified or unnecessary activism is rightfully associated with the risk of international law being abandoned as a tool in foreign policy not only by a handful of powerful States but also by everyone else. But poorly justified or unnecessary self-restraint equally risks making international law as a tool of reinforcing inequality.
The answer to selectivity charges lies in engaging with the one-sided legal scrutiny Russia’s aggression has received and the effects it created, not in putting a comma after all cases of past inaction and placing Ukraine next to them. What can truly hurt the international legal order is Russia’s strategy of using internal disagreements within the international legal discipline to protect itself from the consequences of its aggression and atrocities.
Conclusion
Much of the discussion on seizing frozen Russian assets has been treating both Ukraine and Russia in abstract and formal terms. Closer attention should be paid to the assumptions which lie behind the absolutist reasoning on whether countermeasures are lawful and self-consciously confront them. Otherwise, the unreflective preference to Russia’s “absolute” sovereign rights, in effect, inadvertently feeds the idea of Ukraine’s bounded sovereignty not only by Russia, but the well-wishing Western partners and allies.