Some Liberals and Greens in the European Parliament have called on the EU to freeze and seize the assets of Russian oligarchs and use them to compensate Ukrainians for the damages they have suffered.

As many members of the Russian elite hide their fortunes abroad, several billion euros could theoretically be mobilized.

Following Russia’s invasion of Ukraine, the EU drew up a list of several hundred Russian politicians, civil servants and business elites whose assets were to be frozen.

“We need to move beyond the asset freeze and start using this money to compensate Ukrainians for damages,” liberal MEP Luis Garicano told EURACTIV.

Thus, he echoed a political position that the European Greens took at the beginning of the week in a new policy proposal.

“Member states should be encouraged to ensure proper investigation and judicial process to confiscate the proceeds of corruption and money laundering, and this should be paid into a fund financing Ukraine’s recovery,” the proposal reads.

In the United States, some legislators have also started pushing to confiscate the assets of Russian oligarchs to finance the Ukrainian government.

A 2018 study by researchers Annette Alstadsæter, Gabriel Zucman and Nils Johannesen on who holds the wealth hidden in tax havens showed that much of the wealth of Russia’s wealthiest is held offshore.

Graphic by Esther Snippe

One of the authors, Gabriel Zucman, suggested that these assets be seized. Although the data in the graph above is from 2000 to 2009, it is expected that many members of the Russian elite still own wealth outside of Russia.

A lot of money

Russian oligarchs could hold hundreds of billions of euros in assets in the EU. In Switzerland alone, the Swiss newspaper Neue Zürcher Zeitung estimates that the assets held by the Russians could amount to up to 150 billion euros. Coincidentally, Ukraine’s GDP amounts to roughly the same amount.

So if frozen Russian assets could be seized and used to pay damages in Ukraine, the funds could do a lot.

To effectively confiscate Russian assets, however, Garicano argued that the regulations to implement the sanctions would need to be reformulated.

Under current regulations, banks must notify national authorities by the end of May of all Russian deposits over €100,000.

“But that’s not how the rich hold their money,” Garicano told EURACTIV.

“They don’t have 95 million euros in deposits. The way they keep it is in real estate, yachts and mainly securities like bonds and stocks.

More transparency

This is why Garicano advocated for a reformulation of the regulation so that Russian assets of any kind exceeding the value of €100,000 are reported to public authorities.

Moreover, he argues that banks shouldn’t have until the end of May to make Russian assets transparent, but should do so now.

“I’m quite worried, to be honest. Do you think there will be an oligarch with deposits left in a European bank at the end of May? “said Garicano.

The Green Party also aims to ensure that all assets are taken into account when sanctions are decided. This is why he proposes to set up a European register of assets which indicates the real owners of “all types of assets such as real estate, yachts, private jets and art”, arguing that this would facilitate the imposition of sanctions on the oligarchs in the future.

“The EU must go all the way and close all avenues that facilitate the activities of corrupt politicians and kleptocrats in Europe,” Green MP Ernest Urtasun said in a press release.