EU plans to confiscate assets of Russian sanctions evaders to give to Ukraine

Ireland among top EU states to freeze assets with total of €1.8bn

The European Union is to seek to requisition the assets of those who try to evade sanctions on Russia and give them to Ukraine, according to justice commissioner Didier Reynders, with Ireland among eight member states that have frozen the vast majority of such assets to date.

New figures reveal the top asset-freezing states are Belgium (€3.5bn), Luxembourg (almost €2.5bn), Italy (€2.3bn), Germany (€2.2bn), Austria and Ireland (€1.8bn each), France (€1.3bn), and Spain (more than €1bn).

Together these amount to about 90 per cent of the €17.73 billion of assets that have been frozen across the EU. There is a vast discrepancy between the amounts frozen by different member states, with Hungary, by contrast, having frozen just €3,000 in assets.

The assets belong to 1,239 sanctioned individuals and 116 sanctioned companies named in the EU’s sanctions list due to their links to Russia’s invasion of Ukraine, according to data shared with The Irish Times.

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Some of the totals differ from previously-reported figures because the count no longer includes blocked transactions, a measure that previously inflated the numbers by including the effect of measures such as the expulsion of Russian banks from the SWIFT interbank system.

The European Commission is hoping to launch within days a directive which would allow “not only freezing of assets, but confiscation”, Mr Reynders said. The measure would add the evasion of sanctions to the list of “EU crimes” under a treaty which sets out shared standards for prosecuting serious criminal crimes with a cross-border dimension, such as money laundering.

The commission is ready to push the legislation forward and “go as fast as possible to the enforcement”, Mr Reynders said, with a conclusion to the legislative process possible within months.

Criminalising sanction evasion would allow for the confiscation of assets whenever a conviction is secured, and would apply in cases such as when oligarchs transfer ownership of an asset to a family member or complex legal structure.

“If it’s possible to confiscate it will be also possible to give the money back to the Ukrainian people. And that’s what we are trying to do,” Mr Reynders said.

In addition, the EU is investigating whether frozen Russian central bank reserves, about €30 billion of which are held in Europe, could be used as a “guarantee” to “put pressure on Russia” to make it pay towards the reconstruction of Ukraine in any future negotiations.

“It’s quite logical after such an aggression that part of the funding for the reconstruction is coming from Russia, and not only from the international community,” Mr Reynders said.

Sanctions evasion will be in focus in the EU’s next package of sanctions, which will crack down on “double-use materials” such as microchips harvested from household electronics, after the union detected a number of “very strange imports” to Russia after sanctions cut it off from key technologies.

“It seems that there is an import of a huge amount of washing machines,” Mr Reynders said. “They try to use the chips from many different equipment to transfer to military use.”

There can be discrepancies in the reporting of asset seizures across the EU because different government ministries are involved nationally and local rules differ. For example, Poland has declared it has frozen millions in assets under EU sanctions on Russia, but estimates that €2.7 billion in assets have been frozen under its own national sanctions, according to Mr Reynders.

Naomi O’Leary

Naomi O'Leary

Naomi O’Leary is Europe Correspondent of The Irish Times