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Spain’s idea to help Ukraine using SEIZED profits from frozen Russian assets deemed unviable
By Ramon Tomey // Dec 20, 2023

Spain's proposal to help Ukraine with transferring frozen Russian assets to Kyiv has been deemed unviable, drawing serious criticism in the process.

According to Egyptian geopolitics researcher Ahmed Adel, the move "creates doubt about its legality and presumed risks to financial stability." He then explained that the proposal has its roots in an October plan put forward by European Commission (EC) President Ursula von der Leyen. She said at the time that the EC is still working on this plan, which involves seizing the profits derived from Russian state assets frozen in Brussels and transferring them to Ukraine for the latter's post-war reconstruction.

Von der Leyen remarked that the value of frozen Russian sovereign assets amounts to €211 billion ($230.83 billion). Meanwhile, authorities in Belgium – where most of Moscow's assets are deposited – said the assets frozen there could yield around €3 billion ($3.28 billion) annually.

Spain, which will assume the rotating presidency of the European Union's Council of Ministers for this semester, has continued to push von der Leyen's plan. According to Madrid's estimates, the benefits from Central Bank of Russia reserves frozen in EU countries could generate between €15 billion ($16.41 billion) and €17 billion ($18.6 billion) for Kyiv by 2027.

Under the proposal, the EC will provide Kyiv with €17 billion ($18.6 billion) in subsidies and another €33 billion ($36.1 billion) in low-interest loans until 2027 to avoid Ukraine's bankruptcy. But Adel could not help but point out: "Amid the EU's economic recession, the confiscation and sale of frozen Russian assets emerge as a possible way to raise funds for Ukraine at a time when they are scarce for community policies."

The idea of reinvesting frozen Russian assets and using the profits to support Ukraine isn't new as the EC first put forward the idea in late November 2022. According to the commission's estimate, rebuilding Ukraine would require at least €600 billion ($656.34 billion). The cost, however, has likely skyrocketed since then. (Related: "Reconstruction bank" set up by globalist financiers to help Ukraine secure more than $411bn needed to rebuild.)

Madrid's idea met with skepticism

The idea generated much skepticism in some EU member states such as France and Germany. Diplomatic sources told POLITICO magazine that the skepticism arose from the conviction that it may take years before the money reaches Kyiv. Moreover, the calculation Madrid used to come up with the amount has also generated confusion.

Adel also noted that the EC could find itself in legal trouble if it appropriates frozen Russian assets for Ukraine's use. "Under international law, state assets enjoy immunity from execution," he wrote. "Regardless of the changes that are introduced in legislation, the EU cannot confiscate these reserves."

International law practitioner Francis Bond told Euronews that for instance, Russian entities could claim they are entitled to some of the profits generated from the investment of the frozen assets. They could also challenge the decision to send the profits to Ukraine in both the European General Court and the European Court of Human Rights.

Bond, a senior associate at the London-based Macfarlanes law firm, also noted that Russia will have the right to go to the International Center for Settlement of Investment Disputes (ICSID). The ICSID, which is the World Bank's arbitration court, is often the venue where these disputes are ironed out. Adel noted that such a prospect won't bode well for Spain, "which has a long history of losing these types of cases."

Most of Russia's frozen foreign exchange reserves are at the Brussels-based Euroclear, a financial security clearing and settlement house that acts as a depository. Euroclear holds around €180 billion ($196.81 billion) in Russian securities. Clearstream, another clearing house based in Luxembourg, also holds Moscow's assets.

However, both Belgium and Luxembourg want guarantees that they will not be forced to assume all the legal and financial risks of an unprecedented measure. If the investments lose money, Bond explained, the EC would have to guarantee the Russian assets with public money or risk an avalanche of legal action from the asset owners.

"Given these conditions, attempts to redirect Russian assets and profits to Kyiv is nothing more than a pipe dream that will not eventuate – unless the entire EU wants to ruin its reputation and trustworthiness across the world," concluded Adel.

Head over to UkraineWitness.com for similar stories.

Watch Col. Douglas Macgregor explains Russia's pivot to gold-backed currency, which will begin when it assumes the presidency of BRICS in 2024.

This video is from the Thrivetime Show channel on Brighteon.com.

More related stories:

EU undermining its own sanctions against Russia by buying as much Russian diesel as it can before ban begins.

HYPOCRISY: U.S. to INCREASE IMPORTS from Russia amid economic sanctions on Moscow.

Commodities traders are helping to fund Russia's brutal war in Ukraine: Here's how.

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