UK to change sanctions rules in move towards seizing Russian assets

  • 6/19/2023
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The UK is introducing new laws that will allow ministers to maintain Russian sanctions until compensation is paid to Ukraine, thus introducing a way for frozen Russian assets to be donated to Ukrainian reconstruction. The laws go some way to ensuring that Russian assets currently frozen by the UK government can in effect eventually be seized – a move that many western powers have rejected on the basis that it could set a precedent for western assets held overseas to also be seized. According to the UK government, the new laws do not amount to forfeiture and could only be used if there is evidence of criminal conduct. The measures come ahead of the Ukraine recovery conference in London and critics will see it as an effort to forestall demands for more definitive steps. The laws will change the purpose of sanctions so that they will be maintained until Russia agrees to pay compensation, rather than merely protecting Ukraine’s territorial integrity, the current purpose of the sanctions. The UK is the first government to take these initial steps and accepts they may take time to resolve and require consultation. New measures will also require designated persons to disclose all the assets they hold in the UK, with a failure to comply leading to a fine or a seizure. A further set of measures will require individuals to disclose if they hold Russian sovereign assets in the UK, a move that will provide clearer data to the government on the amount of Russian central bank assets in the UK. These assets will not be disclosed in public. A more minor measure will make it easier for those under sanctions to have their assets voluntarily transferred and handed to Ukraine for the purpose of its recovery. The foreign secretary, James Cleverly, said: “As Ukraine continues to defend itself against Russia’s invasion, the terrible impacts of Putin’s war are clear. Ukraine’s reconstruction needs are – and will be – immense. We will stand with Ukraine for as long as it takes to recover from Russia’s war of aggression and lay the groundwork for a prosperous nation.” The chancellor, Jeremy Hunt, said: “Putin’s Russia must take financial responsibility for the wanton devastation it has wrought on Ukraine. These new measures – on top of our largest ever sanctions package – show the UK is ready and able to clear new paths to ensure Russian money reaches Ukrainian people.” Officials said the measures were not definitive but about establishing a framework to develop with partners for sanctioned Russian assets to be used for compensation. There will be no coercion of individuals to encourage them to transfer funds, nor any offer of sanctions relief in return for making a donation.

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