British experts rule out confiscation of frozen Russian assets

UK authorities will never be able to legally confiscate Russian funds, real estate and other assets frozen in the country, political scientists and sanctions lawyers interviewed by Politico said.

According to the Office of Financial Sanctions Enforcement (OFSI) of the British Treasury, as of October 2023, Russian assets with a total value of £22.7 billion ($29 billion) were frozen in the country. However, there is a big difference between freezing assets and seizing them, experts emphasize.

The freezing of assets is considered a legally proportionate step, since IT is temporary, experts noted. Although the UK authorities can use the profits made from investing the assets, they themselves will be repaid at some point. The final confiscation of this property could entail serious legal consequences, experts warn.

British officials view frozen Russian assets as a useful tool that can be used as part of negotiations, Politico writes. Their confiscation will reduce the likelihood that negotiations will take place at all, former OFSI Head of governance and engagement Freya Page told the publication.

“Asset seizure makes sanctions an ineffective tool because they do not do what they are designed to do. <...> Sanctions are not meant to punish. They must bring people to the negotiating table ,” she stressed.

A Western official, speaking on condition of anonymity, also noted in an interview with the publication that confiscation of assets would reduce the effectiveness of sanctions.

“We are introducing sanctions as a measure that is intended to be temporary and a response to a specific situation. But obviously, if you try to seize assets, this will be a permanent move,” the source told Politico.

Even if the UK agrees to the confiscation of Russian state assets within the G7 (“Big Seven”), the likelihood that the same will happen to the property of specific individuals is small, lawyers say.

Russia considers Western sanctions illegal and demands the unfreezing of assets abroad. The Kremlin warned of a “non-mirror response” if they were confiscated.