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Legal dispute over Russian funds: Germany and Japan in a quandary!
Philipp Kehl from the University of Bucerius explains the legal challenges to confiscating Russian assets for Ukraine.
Legal dispute over Russian funds: Germany and Japan in a quandary!
In an explosive analysis of the legal situation regarding the confiscation of Russian foreign assets, Philipp Kehl, research assistant and doctoral student at the Chair of Public Law, International and European Law, comments on the complex issues surrounding the frozen funds of the Russian state. These funds were blocked after Russia began its full-scale invasion of Ukraine in spring 2022 as part of comprehensive sanctions by the G7 countries. Law School reported about the various legal objections that are raised against the confiscation of the funds.
Russia has been waging a major war of aggression against Ukraine for over three years. During this time, the G7 countries extensively sanctioned Russia in order to curb its military actions and to support Ukraine politically and economically. Kehl explains that Russia invested funds abroad to escape potential sanctions and secure the country's financial resources.
Legal concerns and political positions
The discussion about the confiscation of Russian assets shows that there are different views within the G7 countries. Germany and Japan are expressing serious concerns about the legal consequences of a possible confiscation of Russia's central bank assets. This could set a legal precedent that could reopen illegal reparations claims from World War II, an issue extremely sensitive to both countries. In the words of Telepolis: Germany and Japan not only fear Russia's reaction, but also negative effects on the stability of the common currency in Europe.
The fear is that Germany and Japan, both of which have been responsible for numerous war crimes in the past, could in turn be confronted with demands for reparations as a result of such a measure. Germany in particular faces significant claims from Poland, estimated at $1.3 trillion, and from Greece, worth around $300 billion.
Alternatives and international challenges
The United States, on the other hand, advocates the complete confiscation of Russian central bank assets. They argue that international sanctions against countries that fail to meet their obligations are legally permissible. A proposal from the USA within the G7 aims to pre-finance profits from the frozen funds. These funds are intended to serve as collateral for bonds that could be issued by a G7 special purpose vehicle to provide financial support to Ukraine. However, the political position of Germany and Japan remains unshakable as they want to maintain an unused leverage against Russia.
The debate about the confiscated funds critically affects the fundamental principles of international law. Germany argues that under international law it is not permissible to assert claims against states in foreign courts. A violation of this principle could significantly undermine Germany's legal position and have far-reaching consequences.
In summary, the issue of confiscating Russian foreign assets is at the center of a complex network of legal and political considerations. The G7 countries must find a way to both demonstrate their support for Ukraine and consider the historical and legal implications of their decisions. Further information on the financial sanctions can be found in the documents of the Bundesbank to find.