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Frozen Russian assets could fund new Ukraine rescue plan
Frustrated by the failure to get a $60 billion emergency aid package to Ukraine through Congress, Joe Biden is working on Plan B.
The president has said that he wants G7 countries to come up with a means of tapping the $282 billion in frozen Russian central bank assets by the time leaders meet in Italy in June.
Even though the meeting in Apulia is more than three months away, it might take at least that long to reach a consensus on how to pluck the goose to obtain the most feathers with the least amount of hissing.
Last week, US Treasury Secretary Janet Yellen said it is important to find a way to unlock the value of those assets and divert the proceeds to help Ukraine’s war effort. She said there is a “strong international law, economic and moral case” for doing so.
Rachel Ziemba, an adjunct senior fellow at the Center for a New American Security in Washington, DC, said this represents an “evolution” in Yellen’s thinking from a previous Treasury Department position that worried about the chilling effect on countries like China that might pull back their assets, in case they were confiscated in the future.
The Congressional gridlock that has held up the emergency aid package to Ukraine has clearly played its part. But Yellen said the monetization of frozen Russian assets is not a substitute for direct aid. “This is something that could help longer term,” she said of the frozen assets.
There is general agreement about the economics and morality of such a plan to monetize Russian assets, but there is considerable disquiet about the legality of seizing them outright.
Since Western countries claim they support Ukraine in defense of the international rule of law, they would be open to charges of hypocrisy if their actions were questionable from a legal standpoint.
Yellen said she did not have a preferred strategy but Canadian Finance Minister Chrystia Freeland was asked about the Treasury secretary’s comments the next day.
She said she spoke to Yellen the previous weekend, and that “She and I agree 100%.”
Canada was the first G7 country to pass legislation to forfeit Russian assets and sell the proceeds to help reconstruct Ukraine. The first cases involved individuals, but Freeland said she has been “centrally involved in the work being done to take the next steps and confiscate (central bank) assets.”
She said she has been working from the principles that aggressors should pay and that Russian President Vladimir Putin should be shown that Western support for Ukraine is not flagging.
The problem is that most of Russia’s central bank assets are being held in Belgium, and some European Union countries, including Germany and France, remain unconvinced that simply grabbing the assets and selling them off is a good idea. The EU wants Europe to be seen as a safe place for people to invest their assets, without fear of confiscation.
Clifford Sosnow, chair of international trade and investment at Canadian law firm Fasken, has been a critic of the original legislation introduced by Ottawa on the grounds of due process and compliance with international law when it comes to confiscation without compensation.
“Generally, international law takes a dim view of this. So, while the impulse is understandable, and I have no sympathy for the invasion of a sovereign country, itself a violation of international law, I question whether the house that Canada has built to prosecute and take assets is built on solid legal foundation,” he said.
France, Germany, and the European Central Bank have expressed concerns about legality, as well as fears about the prospect of Russian retaliation on European assets and the impact on the euro’s status as a reserve currency.
The Europeans are pushing a less ambitious project, using what European Commission President Ursula Von Der Leyen called “the windfall profits” from Russian assets that could be used to purchase military equipment for Ukraine. More than $200 billion is held in Belgium by Euroclear, a financial service company that holds for safekeeping. Euroclear earned $4.78 billion in 2023 from those assets.
There have been suggestions that the EU issue bonds based on the income from the Russian assets.
But Ziemba said the view in Washington is that this would not yield enough funds. She said Canada, the US, and the UK are coalescing around the idea that the assets be used as collateral and used to issue loans to Ukraine.
Under this plan, Ukraine’s claim for reparations from Russia would be syndicated to its allies in return for a loan. If Moscow refuses to pay damages, the allies could then use Russia’s frozen assets to pay off the loan.
While loan guarantees might also have to work their way through Congress, this proposal might have broad support: Donald Trump has spoken favorably about loans, rather than direct aid, as a means of supporting Ukraine.
However, questions remain about the legitimacy of grabbing someone else’s assets, even if you don’t auction them off.
Lenders would still have a contractual claim on the Kremlin’s reserves.
The World Bank has estimated the cost of rebuilding Ukraine at $486 billion, but the legality of Kyiv setting its own reparations invoice is dubious.
Given the hurdles, Biden will be lucky if he gets unanimity by mid-June.
Pro-Palestinian protesters demonstrate outside the International Court of Justice (ICJ) on the day of a public hearing to allow parties to give their views on the legal consequences of Israel's occupation of the Palestinian territories before eventually issuing a non-binding legal opinion, in The Hague, Netherlands, February 19, 2024.
Israeli occupation on trial at ICJ
Palestinian Authority Foreign Affairs Minister Riyad al-Maliki on Monday delivered an opening statement before the International Court of Justice at the Hague in a case about Israel’s occupation of Palestinian Territories since 1967. The UN-backed court will hear from more than 50 countries and three multinational organizations – the largest case in the ICJ’s history – but a decision could take months, and it would be non-binding.
This is separate from South Africa’s case alleging Israel is committing genocide in Gaza.
Quick history: In the aftermath of Israel’s war of independence in 1948, Egypt occupied Gaza while the West Bank and East Jerusalem fell under Jordanian control. However, when Israel launched preemptive strikes against an imminent Egyptian invasion in 1967, it responded to Jordanian shelling by pushing Amman’s forces back across the Jordan River. Israel has occupied the West Bank and East Jerusalem ever since, while Israeli settlers have inhabited large portions of each territory (see our explainer here). Israel also captured Gaza and the Sinai desert from Egypt but withdrew all troops and settlers first from Sinai by 1982 and then from Gaza in 2005.
The arguments? Palestinians argue that the occupation undermines their self-determination, that Israeli policy amounts to apartheid, and that the occupation is illegal. Tuesday’s session will be opened by South Africa, a strong Palestinian advocate, followed by delegates from nine other countries including Chile, which has the largest Palestinian population outside the Middle East.
Israel said in a written argument that the question before the court is prejudiced and an opinion would be “harmful” to a resolution, but it will not directly participate in the proceedings. Its strongest ally, the United States, is slated to speak on Wednesday.
Will anything come of it? The short answer is no. Israel will be free to ignore any ICJ decision. That said, the exercise is already illustrating Israel’s near-total isolation on the global stage – and we’re watching for how the Biden administration threads a tricky needle of public opinion at home. The president is facing opposition from the left wing of his own party as well as Muslim voters in the key swing state of Michigan for what they see as an overly deferential position toward Israel’s war in Gaza.Print photocopies of Benjamin Ferencz, while he served as a prosecutor during the Nuremberg trials, on a table at his home in Delray Beach, Florida on June 1, 2022.
Nuremberg now: the legacy of Ben Ferencz
At 27 years old, with no trial experience to speak of, Ben Ferencz entered the courtroom at Nuremberg in November of 1945. He was tasked with holding to account a regime that had slaughtered millions and tried to annihilate his own people. Acting as chief prosecutor, Ferencz secured convictions against 22 Nazis.
Ferencz, the last-surviving prosecutor at the Nuremberg trials of Nazi war criminals, passed away last week at the age of 103. As a child, he and his family fled anti-semitism in Romania. After finishing law school at Harvard, he joined the US army, taking part in the Normandy landings and the Battle of the Bulge. He was then assigned to General Patton’s HQ as part of a special unit investigating Nazi atrocities, interviewing survivors and witnessing first-hand the horrors of the concentration camps. That experience would shape the rest of his life. He would remain a warrior, not on the battlefield but in the public arena as a professor of international law and tireless campaigner for justice for the victims of genocide.
The Nuremberg trials marked a watershed moment in the history of modern human rights law. Never before had an international tribunal sought to hold global leaders to account for starting a war and carrying out crimes against humanity. They also included a new term- genocide – as part of the indictments.
In the decades since, the notion that war criminals may face justice has – however imperfect in practice – become an accepted part of international norms. That’s especially true since 2002 when Ferencz’s efforts helped to establish the International Criminal Court (ICC) at the Hague. International courts have judged the perpetrators of genocides in Rwanda and the former Yugoslavia in ways that were unimaginable when Ferencz was a child.
Still, more than 75 years after Nuremberg, international justice remains a work in progress. Participation in the ICC is voluntary, and even the world’s most powerful democracy, the United States, refuses to do so, out of concerns that it would limit American sovereignty. That puts Washington – which has faced its own human rights allegations in the past – in the unsavory company of serial abusers like Russia, China, Syria, or Saudi Arabia, which also refuse to ratify the ICC’s underlying statutes.
Despite a recent ICC warrant against Russian President Vladimir Putin, for example, there’s little chance that he’ll face prosecution. Bashar al-Assad, for his part, has survived the civil war he helped create, and is unlikely to face justice for the gruesome crimes that his regime committed during the war.
The coming years pose particular challenges to the cause of international justice. For one thing, the emergence of new major international powers may make it even harder to secure universally-applicable mechanisms of human rights law. Technological advances, meanwhile, enable state and non-state actors to spread disinformation in an attempt to erode trust in facts and evidence. For instance, the Russian disinformation narratives have asserted that the civilian massacre in Bucha, Ukraine was staged.
Nevertheless, Ben Ferencz and his colleagues gave today's international human rights lawyers and activists the tools to document evidence and gather witness testimony, and the mechanisms to hold leaders accountable.
Ferencz himself was under no illusions about the challenges of creating a system that would bring war criminals to justice. In his later years he remarked “Nuremberg taught me that creating a world of tolerance and compassion would be a long and arduous task.”
But he also reminded us that “if we did not devote ourselves to developing effective world law, the same cruel mentality that made the Holocaust possible might one day destroy the entire human race.”
Handout photo dated January 14, 2020 shows an MQ-9 Reaper flies over the Nevada Test and Training Range.
What We’re Watching: Drone drama, DeSantis vs. Ukraine, Japan hearts South Korea, Pakistan-Khan standoff
Drone drama over the Black Sea
In what is so far the closest thing to a direct clash between the US and Russia over Ukraine, a Russian jet on Tuesday crashed into an American drone over the Black Sea, sending the unmanned craft hurtling into the water.
Moscow disputes the claim, saying its jets didn't hit the drone. The US accused the pilots of two Russian Su-27s of being “unprofessional” and “environmentally unsafe” for harassing and “dumping fuel” on the $32 million MQ-9 Reaper drone.
But scholars point out that the US didn’t call the act “unlawful.” Russia was evidently within its rights to disrupt a drone in international territory that was almost certainly gathering intel for Moscow’s adversaries in Kyiv. Still, the incident shows the dangers of US and Russian military hardware operating in such close proximity, even if they aren’t in direct conflict.
Ron goes Don on Ukraine
Speaking of those dangers, Florida Gov. Ron DeSantis has waded into some foreign policy waters of his own, telling FOX News host Tucker Carlson he thinks that the Russia-Ukraine “territorial dispute” is not a vital US national interest and that Biden’s “blank check” for Kyiv is a distraction from more pressing issues like China.
This puts Desantis at odds with much of the GOP but firmly in line with … former President Donald Trump, whom he is all but sure to challenge for the Republican nomination in 2024.
Political wrangling aside, Desantis may be trying to catch a broader trend: In February, polls showed that only 48% of Americans favored providing weapons to Ukraine, down 12 points from May of last year. Is Ron on to something?
Japan and South Korea’s efforts to strengthen ties
South Korean President Yoon Suk Yeol and Japanese PM Fumio Kishida are meeting in Tokyo this week in a bid to forge stronger economic and security ties. Diplomatic engagement between the countries has stalled in recent years owing to territorial disputes and Japan’s rearmament amid what Koreans see as Japan’s efforts to whitewash World War II-era atrocities.
This follows a recent landmark agreement between Tokyo and Seoul for a South Korean fund to compensate victims of Japan’s forced labor camps during its 20th-century colonization of the Korean peninsula – a deal that has proven unpopular with South Koreans for not holding Japan directly and financially accountable.
Improved cooperation would help both countries meet the increasing security challenges posed by China and North Korea in the region. Restoring trade links between South Korea and Japan, meanwhile, will help alleviate high-tech global supply chains. But for this to work, Kishida’s government must first win over South Korean hearts and minds.
Imran Khan 1 - Pakistan’s government 0
Pakistani security forces on Wednesday withdrew from near Imran Khan’s home in Lahore after failing to detain the former PM, despite having an arrest warrant. The reason: to allow a big cricket match to take place in the city.
As the standoff unfolded, Khan — who used to captain the national team in cricket-crazy Pakistan — took to Twitter, urging his supporters not to give up. He was ousted in a no-confidence vote last April over allegations of corruption and “terrorism”, which he and his supporters dismiss as politically motivated. But since then, Khan has fervently sought to win back the top job, leading a populist movement against Pakistan’s political elite and all-powerful army, whom he accused of being behind an assassination attempt against him in Nov. 2022.
So far, the government was too scared of igniting his base to arrest the former PM, even after he was a no-show in court. Yet, in a country where the army calls many political shots, perhaps he’s made too many enemies. And if he’s behind bars when Pakistanis vote in provincial elections this fall, will his fans remain silent?
Russians committing "massive war crimes" in Ukraine
Carl Bildt, former Prime Minister and Foreign Minister of Sweden, shares his perspective from Santa Monica, California:
Has Russia committed genocide in Ukraine?
Well, that's for the legal experts to sort out. There's a somewhat more liberal use of that particular term in American political debate than in Europe. In Europe, we are somewhat more careful with the use of that particular word for obvious historical reasons. But there's no question whatsoever that massive war crimes have been committed, and that primarily Putin has committed the number one crime on the international law, and that is aggression against another country. No question whatsoever.
Are there any prospects for peace?
Not at the moment. Putin made clear the other day that he doesn't see any reason to continue the talks that were somewhat limited in Istanbul a couple of weeks ago. And he's clearly now aiming for a major military offensive in the east where he is amassing lots of forces in order to do what he hoped would be a decisive defeat for Ukrainians. That will decide a lot of the outcome of the rest of this particular conflict.
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Going after war criminals
The accusations of Russian war crimes in Ukraine have shocked the world. The Kremlin, of course, denies targeting civilians and says it’s the Ukrainians who are violating the rules of war. So what happens when one side does commit atrocities during a conflict?
It might be prosecuted for war crimes, like the Nazis who were tried in Nuremberg after World War II, just a few years before the latest version of the Geneva Convention was ratified in 1949, establishing the core of international humanitarian law.
More recently, the UN has set up special courts to prosecute war crimes like those in the former Yugoslavia (this week is the 30th anniversary of the start of the war in Bosnia), and 20 years ago the UN-backed International Criminal Court was established.
Such bodies were able to try the likes of Slobodan Milošević, the former president of Yugoslavia, and convict Charle Taylor, the Liberian warlord-turned-president.
But others evaded justice. Not everyone is on board with international tribunals for war crimes.
The US, China, and Russia have not joined the ICC — in the American case, Bill Clinton tried but it was never ratified by Congress.
Lack of jurisdiction will make it hard — but not impossible — to go after Russians accused of war crimes in Ukraine.
KL's Rome Statute U-turn a move to prevent coup: Minister
Malaysia's decision to not accede to the founding treaty of the International Criminal Court (ICC) has snowballed into a massive fiasco, with claims that "people with vested interests" were manipulating the issue to pit the Malay rulers against the Pakatan Harapan (PH) government and bring down the administration.