Austrian Foreign Minister Alexander Schallenberg has cautioned the European Union (EU) to ensure it has a clear legal basis if it decides to confiscate frozen Russian assets and transfer them to Ukraine. Schallenberg believes that failure to establish a watertight legal case would severely damage the bloc’s reputation. In an interview with Austrian broadcaster ORF, he emphasized that any confiscation of Russian assets must be legally sound. Schallenberg stated that Austria and other EU member states are bound by the rule of law and must apply this principle in international relations. He argued that this is one of the fundamental differences between Western European nations and Russia.
The Austrian minister acknowledged that expropriation is a significant intervention under the law and stressed the importance of making decisions based on the rule of law. He further warned that any action taken could be challenged at the European Court of Justice in Luxembourg. Schallenberg emphasized that if the appropriation of Russian assets is not deemed to have a legal basis, it would be an enormous setback and a disgrace for the EU.
Addressing relations with Moscow more broadly, Schallenberg stated that geography dictates that Russia will remain a part of European history. He criticized attempts to “cancel” the country and called for communication channels to remain intact. He argued that EU policies toward Russia should not be guided by emotions.
The issue of confiscating Russian assets emerged following reports that EU leaders had considered imposing a windfall tax on profits generated by more than €200 billion ($217 billion) of frozen Russian central bank assets to support Ukraine’s reconstruction. However, concerns were raised over the legality of this option. The European Central Bank also warned against a windfall levy, stating that it could undermine confidence in the euro as a global currency and negatively impact financial stability.
In April, the European Commission ruled that member states could not seize frozen Russian assets outright. The EU and its allies had frozen hundreds of billions of euros of Russian central bank holdings and private assets in response to Moscow’s military campaign against Ukraine. Russian officials have vehemently opposed any seizure of the country’s assets, considering it theft and illegal under international law.
Schallenberg’s remarks highlight the need for the EU to establish a strong legal case if it intends to confiscate Russian assets. Without a watertight legal basis, such action could tarnish the bloc’s reputation and potentially face legal challenges. It is crucial for EU member states to uphold the rule of law in their international relations. Schallenberg also underscores the importance of maintaining communication channels with Russia and avoiding policies driven by emotions.