General

Since the Russia-Ukraine conflict, Western countries led by the United States have imposed round after round of sanctions on Russia. These sanctions include the freezing of a large number of Russian assets abroad. How the United States and the West deal with the huge amount of Russian overseas assets has aroused widespread concern in the international community. Recently, the Russian media revealed that the United States and the West are "eyeing" these properties and are trying to take them for themselves.

Russia's overseas assets become an important target

In the US and the West's sanctions against Russia, Russia's overseas assets have become an important target.

After the Russia-Ukraine conflict, the United States and other Western countries froze and seized hundreds of billions of dollars of Russian assets, including the bonds of Western countries purchased by Russia, Russia’s foreign exchange reserves, and the overseas assets of sanctioned individuals, under the pretext of sanctioning Russia. Since 2014, the Russian central bank has been steadily divesting most of the dollar holdings in its foreign exchange reserves, but currently the dollar, euro and pound still account for more than 50% of its holdings in France, Germany, Japan, the United Kingdom, the United States, Canada and Australia.

On February 24, the United States began to impose a new round of financial sanctions on Russia, and the two largest banks in Russia, the Reserve Bank of Russia and the Russian Federal Trade Bank, were among them. The U.S. dollar assets held by VTB, the second largest bank in Russia, were directly frozen and sealed. According to the US Consumer News and Business Channel (CNBC), data released by the US Department of Justice on June 29 local time showed that the United States and its allies have frozen more than $30 billion in assets of Russian oligarchs, and frozen about 3,000 billions of dollars in central bank assets of Russia.

The European Union is expected to pass a directive in October that would allow the confiscation of Russian assets in the bloc if attempts to circumvent or circumvent sanctions are discovered, EU Justice Commissioner Didier Raindale revealed on July 12, local time. Reyndale also said the European Parliament had "green-lighted" the directive and that there was agreement within the European Council on the matter.

Since the start of the Russia-Ukraine conflict, the European Union has frozen assets worth about $13.8 billion from Russian tycoons and other entities, Raindale said.

According to Russia Today (RT), in March this year, the United States formed a task force of Russian elites, proxies and oligarchs (REPO) with the purpose of implementing the sanctions imposed by the West on Russia due to the conflict between Russia and Ukraine. The task force includes finance and judicial officials from the US, UK, France, Germany, Italy, Australia, Canada, Japan and the European Commission.

It is also reported that in June this year, Canada passed a new bill authorizing the government to confiscate and sell the assets of sanctioned parties. The implementation of the Act means that Canada has given the green light to the confiscation and disposal of Russian assets at the domestic legal level.

Russia warns of retaliatory measures

After the Russia-Ukraine conflict, the United States and the West removed Russia from the Society for Worldwide Interbank Financial Communication (SWIFT system). However, compared with this sanction, freezing Russia's overseas assets is more direct.

For the actions of the United States and the West, Russia has shown great anger.

Russian Foreign Ministry spokeswoman Zakharova called this act of the United States and the West a "robbery". She said the freezing of Russian overseas accounts and similar practices violated international law and affected the fair functioning of the global financial system. This act is a blatant violation of sovereign property and has caused the world to rethink the reliability of the US dollar and euro as reserve currencies and primary means of external settlement.

Zakharova also warned the United States and the West: "You should not forget that Western countries, companies and citizens also have a lot of assets in our territory. If the United States takes action, Russia has the right to take retaliatory measures, such as reciprocal confiscation of Western countries. assets in Russia."

Kremlin spokesman Peskov said that the United States and other Western countries have always advertised compliance with the spirit of the contract, but on the issue of the Russian-Ukrainian conflict, indiscriminate sanctions against Russia have become "politically correct", and financial instruments have become weapons against Russia. With a single decree, other people's wealth can be appropriated and disposed of at will, while principles such as the spirit of contract, awareness of rules, and the inviolability of private property have been ruthlessly abandoned.

The chairman of the Russian State Duma (lower house of parliament) Volodin hinted that the United States and Russia may take back Alaska. "Decency doesn't mean weakness, and we have ways to fight back," Volodin said. "The United States should always remember that there is a piece of territory there - Alaska. If they try to dispose of our overseas assets, think carefully before acting, and we also have to. taken back."

Unilateral sanctions undermine international law

In fact, it is not Russia that freezes the property of sovereign countries by the United States and the West.

In February this year, US President Biden signed an executive order, planning to use half of the frozen assets of the Central Bank of Afghanistan in the United States to compensate the victims of the "9.11" incident. The international community unanimously condemned such actions by the US government, believing that it once again exposed the true face of power and hegemony concealed under the mask of the US so-called "rules-based international order".

According to "US Financial Sanctions: Framework, Checklist, Model and Impact" published by Zheng Liansheng, an associate researcher at the Institute of Finance of the Chinese Academy of Social Sciences, the US Treasury Department is the core department for the implementation of financial sanctions in the United States, and the Office of Foreign Assets Control (OFAC) of the Ministry of Finance is the The core enforcer of financial sanctions imposed by the United States is responsible for controlling transactions under the jurisdiction of the United States and freezing the assets of foreign entities.

However, OFAC mostly indiscriminately imposes sanctions on other countries in accordance with the domestic laws of the United States. For example, the U.S. "International Emergency Economic Powers Act", "National Emergencies Act" and other laws authorize the U.S. president to order domestic institutions to stop communicating with the sanctioned object when the so-called "national security, foreign policy or economic interests are threatened". financial transactions, money transfers, currency transfers, etc. The President has the power to order the freezing of foreign assets in the United States, imposing a trade embargo, or other appropriate disposition when “the national interests of the United States are violated by a sanctioned country or entity.”

In addition, the Patriot Act passed in 2001, the Legal Sanctions Against Sponsors of Terrorism Act passed in 2016, and the next annual National Defense Authorization Act promulgated by the U.S. government at the end of each year, the initiation and Supplementary clarifications and provisions are made for the implementation. For example, the Law on Sanctions Against Sponsors of Terrorism Act provides for the denial of sovereign immunity of states involved in the perpetration of terrorism on U.S. soil. It is worth mentioning that the bill tramples on the long-standing provisions of international law on sovereign immunity.

Regarding the unilateral sanctions by the United States, even US Treasury Secretary Yellen had to admit that the confiscation of the frozen assets of the Russian Central Bank by the US government is illegal in the United States, and the law does not allow the US government to do so. The British "Financial Times" recently published an article calling for the "lawful" disposal of Russian assets.

International media also generally believe that the wanton freezing and disposal of government assets of other countries is a hegemonic act of the United States taking advantage of its leadership. The behavior of Western countries breaking the bottom line of morality and rules to plunder Russian assets has fundamentally shaken the trust relationship in the global market, making countries pay more attention to the security of reserve assets and question the credibility of Western countries.

An article in the United States pointed out that 78% of the international reserves of developing countries are foreign exchange assets. For a long time, these foreign exchange reserves have been regarded as "savings in a piggy bank", but a series of recent Western sanctions have shown that these foreign exchange reserves can be "snatched" at any time.