Economist Zubets: “This does not fit into any gates”
The US House of Representatives passed a bill that would include provisions for the confiscation of Russian assets (we are talking about $4-5 billion), as well as permission to use such assets to restore Ukraine. The document also includes the provision of assistance to Kyiv in the amount of about $61 billion. Now the plan must be approved by the Senate and then by the US President. Will Biden take such an unprecedented step and how will Russia respond? Alexey Zubets, director of the center for socio-economic research at the Financial University under the Government of Russia, told MK about this.
— You shouldn’t expect anything from the European Union. He is, one might say, in prostration and today is not ready to move on to any active measures to confiscate Russian assets.
— Well, this doesn’t fit into any gates! A key principle of European law is that a court has the power to consider only those decisions that are within its jurisdiction. Without a court decision, confiscation of assets is impossible. And in Europe there is not a single court whose jurisdiction would include economic disputes between Ukraine and Russia. That is, in the territory of the European Union there is simply no one to make a decision on confiscation of assets so that it is legal. Since there is no such decision, then such a court will simply contradict the fundamentals of judicial practice. Therefore, the European Union cannot just agree to this; it has been looking for two years and cannot find an appropriate way to confiscate assets. And if they haven’t found it in two years, it means they won’t find it in the future.
— Yes, the decision to confiscate Russian money should be made specifically by Belgium, which does not want this at all. Therefore, the European Union will not do anything. But, by the way, there is a high probability that the Americans will not do anything in this direction, because this is an unprecedented story that has not happened since the Second World War, when the United States confiscated the property of citizens and vice versa. It turns out that nothing like this has happened since 1945. The creation of such a precedent is a fundamental change for the global investment market. The decision to confiscate must be made by specific people, that is, President Biden and his financial advisers.
— I don't think it will come to that. And the amount of funds frozen there is relatively small — about $5 billion. Meanwhile, after the confiscation, if it takes place, the Chinese will probably begin to withdraw their money from America, and here we are talking about almost $1 trillion. 5 billion and 1 trillion are incomparable amounts. Therefore, I believe that this event will not reach practical implementation, it will remain at the level of intentions and political declarations.
— Yes, yes, this is just a permission. The House of Representatives gave President Biden permission to do so. But it is far from certain that he will do this.
— Well, the president’s press secretary has already answered verbally. According to Dmitry Peskov, there are American and American-related assets on Russian territory about $100 billion. In principle, we, of course, can confiscate them, but we definitely won’t do this now. This is a gun that hangs on a theater stage, but does not fire. This is a threat like “You take our $5 billion, and in return we will take your $100 billion.” Personally, I think that $100 billion is an estimate that has been exaggerated by a factor of two. But we will most likely have approximately $45-50 billion for retaliatory confiscation.
— Why is this necessary? In fact, these assets are already at the disposal of Russia, the Russian government, and work for Russia. In fact, the Americans have lost the right to manage these assets, and then why complete their nationalization without extreme reasons? Now, if the American confiscation of our assets actually takes place, then yes, indeed, Russia can respond in kind. But in this case, the Kremlin will not play ahead.