Frozen assets can be used to put pressure on Russia to compensate for damage caused by war

The Estonian Foreign Ministry believes that Russia's frozen assets could become a tool to put pressure on Moscow to compensate for damages for the war.

Source: European Pravda, citing Estonian broadcasting company ERR

Details: The Estonian Ministry of Foreign Affairs is planning to submit a draft law that would allow to compensate Ukraine's losses from the war using frozen Russian assets in a few months’ time. Estonia hopes that this draft law will become an example for Europe.

Kerli Veski, Director General of the Legal Department of the Ministry for Foreign Affairs, has explained that if Ukraine files a lawsuit for damages against Russia and Russia refuses to pay, the frozen assets could be used to put pressure on Russia.

"In order to reach an agreement with the Russians on compensation for damages. If this does not happen, then we will have a legal opportunity to use the frozen assets as a kind of prepayment for damages," Veski said.

According to Veski, Estonia would like the EU as a whole to find a solution to use the frozen Russian assets in the interests of Ukraine, but reaching an agreement between all EU countries will take time. Estonia could finalise its law faster, and this could be an example for other countries.

"Such a draft law can be prepared in the coming months. The Ministry of Justice has already drafted a preliminary version of the draft, but since discussions are still ongoing, it is not yet in a form that we can post it in the public information system for draft laws right now," Veski said.

Russian assets worth tens of millions of euros have been frozen in Estonia. By comparison, in early autumn, the World Bank estimated that Ukraine's restoration would cost €350 billion, and later estimates have reached €600 billion or even a trillion.

"Here we come to a very practical question. If we in Estonia pass a law that will allow us to use assets as a ‘prepayment’ if all the conditions are met, then we will be able to talk only about Estonia, about the assets that are, for example, in our banks," Veski explained.

The European Union is currently discussing the investment of Russian assets and the use of the proceeds in the interests of Ukraine.

Background: 

Back in November 2022, European Commission President Ursula von der Leyen said that Brussels, together with its partners, would develop a plan to confiscate frozen Russian assets to be used to restore Ukraine and compensate for the damage caused by the Russian war.

According to Bloomberg, the European Commission is proposing to pool frozen Russian assets at European or international level for investment, and the profits from this investment could be used to finance Ukraine's recovery.

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