The European Commission has concluded that it will almost certainly have to eventually hand back frozen Russian central bank reserves, Die Welt reported on Thursday.
The German newspaper, citing an unpublished internal document, suggests that this may happen when the conflict with Ukraine ends. Kiev has called for the funds to be used for its post-war reconstruction.
According to the article, while top EU officials, including European Commission President Ursula von der Leyen, have publicly supported the idea of giving the money to Ukraine, this would prove difficult to implement in practice and is likely “doomed to fail” for a number of reasons.
For example, the frozen reserves of the Russian central bank, which are believed to total €300 billion, are spread throughout Europe and deposited in numerous accounts, often with no direct link to Moscow, Die Welt explained, citing anonymous “insiders familiar with the EU’s plans.”
As a result, Brussels has no clear idea of where exactly all that money is, the newspaper said.
Even if officials succeed in locating the funds, there will still be a huge question about whether the bloc can legally appropriate the money and use it as it sees fit.
According to the internal document seen by Die Welt, the European Commission came to the “sobering conclusion” that the frozen reserves “must not be touched because one day, when the war is over, they will have to be returned to Russia.”
Officials in Brussels, however, have reportedly been trying to figure out ways around the hurdles. One idea would be for them to invest the funds and transfer at least the interest accrued on them to Ukraine. The outlet claimed that if invested in European government bonds, the Russian central bank reserves could yield up to 2.6% interest per annum.
Such an “extraordinary measure” could potentially be legally feasible, the outlet said, citing the commission. However, there is still a “very low” risk with such a plan may result in losses and therefore see the money effectively gambled away.
Regarding the assets of Russian oligarchs in the EU, Die Welt said that the Commission believes some of those individuals have so far managed to slip under the authorities’ radar, with some member states apparently lacking the zeal to go after them.
Even if all the assets were found and frozen, they could not be confiscated, the paper noted, explaining that this could only happen if it was proved the billionaires had actually committed a crime – a legal effort which could take years in each case.
The EU froze Russia’s central bank reserves soon after President Vladimir Putin sent his troops into Ukraine late last February. Moscow has condemned Brussels’ actions as theft.