11

https://www.france24.com/en/live-news/20220909-ukraine-reconstruction-to-cost-349-bn-report

Rebuilding Ukraine following the devastation caused by the Russian invasion will cost an estimated $349 billion, according to a report issued Friday.

But the figure, which totals 1.5 times the size of the Ukrainian economy, is considered a minimum and is expected to grow in the coming months as the war continues, according to the joint assessment by the government of Ukraine, the European Commission, and the World Bank.

It has been reported that it would cost 349 billion to reconstruct Ukraine as it was before. I heard that the U.S. possess around 300 billion in frozen Russian asset, and I was wondering if the U.S. had the legal means to use that fund "illegally" and use it to finance the reconstruction of Ukraine? Is there a legal precedent for doing something similar?

3
  • "I heard that the U.S. possess around 300 billion" Where did you hear it? If anywhere this amount would be scattered around the world, I guess.
    – Trilarion
    Sep 10 at 6:52
  • If you use something through legal means, then by definition it's not an illegal use. From the rest of your question I assume you mean using it legally according to US law. Is that correct?
    – Blueriver
    Sep 12 at 18:54
  • Did US have legal mean to get it frozen in the first place?
    – The Norman
    yesterday

4 Answers 4

35

Legal from what perspective?

International law consists of the assumption that states are sovereign, and negotiated or customary rules between them. Just which customary rules are established enough to be jus cogens, binding on all states, is not finally clear. The ability of one state to deposit money in another state and get it back is not guaranteed. On the other hand, historically theft on this scale might have been a casus belli.

But simply taking that money would be a grave breach of trust into the financial services of a country, unless most or all other nations agree that it is a very special case. Russia is arguing internationally that Western sanction policies are a threat to the rest of the world. The Western filter bubble tends to dismiss it as propaganda, but it has some succes in the rest of the world.

If the US takes Russian money, would China, Saudi Arabia, India, Brazil trust American banks? And if they don't trust them, can they find an alternative?


Follow-up: as you can see from the comments which have since been removed, some readers seem to think that I share the Russian position. I do not. But I do believe that (too) much of the rest of the world shares it, and that the West needs to be careful not to play into Russian narratives. Global support for sanctions is not automatic, it takes effort to maintain it.

4
  • 1
    "would China, Saudi Arabia, India, Brazil trust American banks?" Other than China, I don't think any of them have any plans on conquering a neighboring country. And it's not entirely clear that it's in the US's interests to assure China that invading Taiwan would not have any effect on their assets in the US. Sep 12 at 2:37
  • 5
    @Acccumulation, Saudi Arabia has a dodgy human rights record. They might face US sanctions the moment they're no longer shielded by the geopolitical necessities. And as for China, that's just my point. It would be in the interest of all those countries to establish a second, and possibly a third international banking system outside the West, just to hedge their bets.
    – o.m.
    Sep 12 at 5:19
  • 10
    @Acccumulation Saudi Arabia is trying to conquer a neighboring country right now.
    – jgosar
    Sep 12 at 9:19
  • @jgosar Saudi Arabia is providing aid to stop the government of Yemen from being overthrown. That's a rather odd definition of "conquering". Sep 17 at 19:47
9

Apparently a precedent for doing so (i.e. unlocking frozen Russian assets to use in the rebuilding of Ukraine) exists legally somewhere in the Iraqi 1990 invasion of Kuwait, according to Philip Zelikow at the University of Virginia. But I'm curious as to why it must be "the U.S." that facilitates this process. What, are they ("we" actually, as I'm American) bigger than the international community writ large? And isn't the knee-jerk assumption that this is purely the U.S.'s prerogative just a reflection of the sort of rigid mindset that Russia (and, increasingly, the Global South led by China) is lashing out at in the first place? https://www.lawfareblog.com/legal-approach-transfer-russian-assets-rebuild-ukraine

3
  • 1
    This is a frame challenge that would be better addressed by editing the question.
    – Spencer
    Sep 11 at 22:42
  • 1
    re: "why it must be the US that facilitates..." Very likely because the funds are handled by the banks domiciled in the US and subject to US regulations.
    – wrod
    Sep 11 at 22:48
  • 1
    This is a much stronger approach in international law. As you point out, still not sure it is a great idea, Russia being nuclear and all. But at least it's not "USA law says USA can!" Welcome aboard. Sep 12 at 2:02
2

The context matters.

If to ask "can and would USA just nationalize arbitrary foreign accounts for no reasons", the answer is likely no and all talks about "undermined trust" are relevant. But there is more than that in the context.

If I launch a rocket from my yard and destroy a house of my neighbor, it cannot be there is absolutely no legal basis to ask me to pay for rebuild. Even if I start to argue the launch was "somewhat provoked". Of course it must be a law court, the judges will decide, Russia will have the word to say, but I do not see how they can come up dry out of this swamp. Other answers contain references to the possible legal approaches.

It is the same as with economic sanctions, with visas, with closing the airspace. These all may have questionable legality if done for a random country without any visible reason.

There is a reason. I do not think there is any country outside your "filter bubble" that thinks it is Ukraine that invaded Russia or that comparable part of Russian civil infrastructure has been destroyed.

USA and EU may not be able to provide hundreds of billions required to repair the damage done for Ukraine. Leaving the country "as is" means creating a large unstable region with very unpredictable future. It may be no other way as to use this money.

1

Yes.

The only potential hurdle to it would be sovereign immunity. But sovereign immunity can be removed with a legislation. There are already laws which remove sovereign immunity to civil law suits.

The criteria for sovereign immunity are established in Foreign Sovereign Immunities Act. But the act can be amended to allow more situations in which law suits can occur. For example, JASTA amends it to:

authorize federal courts to exercise subject matter jurisdiction over any foreign state's support for acts of international terrorism against a U.S. national or property regardless of whether such state is designated as a state sponsor of terrorism.

Other amendments can be passed to create exceptions to allow law suits under some other sets of limited circumstances.

6
  • This seems very specific. I guess I would learn more if first a description of the current legal status of frozen Russian overseas assets is done and then a description how that assets could change ownerships before coming to the question of why that might not work actually.
    – Trilarion
    Sep 10 at 6:55
  • 4
    i.e. according to US law the US can do whatever they want? Sep 10 at 14:25
  • 3
    @ItalianPhilosophers4Monica I am 100% certain there is no such law in the US. What do you want me to do? Give a puff answer or give an actual answer to the question that's been asked? If the US can pass a law which allows suing Saudi Arabia for sponsoring terrorism, then it can also pass a law which allows suing Russia for violating the Geneva Conventions.
    – wrod
    Sep 10 at 14:42
  • 1
    @ItalianPhilosophers4Monica: Isn't that the point of democracy? It's definitely a cornerstone of the British (unwritten) constitution: the UK can do what the current UK parliament wants, without being bound by previous UK parliaments. The US at least has a written constitution which protects some rights, but foreign sovereign immunity is not protected by the the US constitution.
    – MSalters
    Sep 12 at 13:55
  • 1
    @ItalianPhilosophers4Monica No, the US constitution puts some limits to what laws US Congress can pass. However, passing laws that enable seizing Russian assets does not violate these limits.
    – Peteris
    Sep 12 at 16:02

You must log in to answer this question.

Not the answer you're looking for? Browse other questions tagged .