By Edward Lucas

January 28, 2024


Confiscating the Russian Central Bank’s reserves is right.

To mark the two-year anniversary of the full-scale invasion of Ukraine, the West should seize the Russian central bank’s $350 billion in foreign assets. This would have profound symbolic and practical benefits, boosting Ukrainian morale, displaying unity, punishing Russia—and filling the Kyiv government’s fast-emptying coffers.

One argument against this is that the international financial system depends on trust. It should not be subject to political whim. Seizing other countries’ sovereign assets is against the law. If the West believes in property rights, it must practice what it preaches. Another argument is that asset seizures are a card best played later, in negotiations about post-war reparations. A third is that this move is unprecedented and, therefore, bad.

But Russia cannot expect protection from an international rulebook that it tore up by attacking another country, destroying its infrastructure, murdering its people, and seizing its territory. If the law does not allow the seizure of another country’s central bank reserves, the answer is simple: change the law. Parliamentarians in Estonia are doing just that, and US senators have also backed a new law. Western countries did this with oligarchs’ assets. They can do it with the Kremlin’s own money, too.

Russia will certainly respond. Western companies in Russia may have their remaining assets seized. Tough. Nobody made them do business in a gangster state. They chose to do so because they were naïve, cynical, greedy, or stupid. They must learn that these failings come at a price.

Other regimes, particularly those thinking of invading neighboring countries, may decide that their cash will be safer in Moscow or Beijing (or Tehran, Caracas, or Pyongyang, for that matter). Good luck to them. The Western financial system will survive. Dollars, euros, and pounds are popular for a reason.

The lesson of the past two years is that sanctions that nobody thought possible are, in fact, feasible. Even freezing Russian central bank assets would have been regarded as insanely bold. We did it at the start of Russia’s full-scale war. It worked. It was the same story with removing most Russian banks from the SWIFT payment network. As the former World Bank boss Bob Zoellick argued recently in the Financial Times, if Western countries are bold enough to send weapons that kill Russian soldiers, it is odd to regard transferring Russia’s assets to Ukrainian victims as too risky. To sweeten opinion, some of the frozen money could go to compensate poor countries hurt by higher food and energy prices, he suggests.

The coalition behind asset seizures is growing. Bill Browder, a former Moscow-based financier turned Kremlin critic, took the campaign to Davos, an annual Swiss shindig for plutocrats. That

should worry the Putin regime. Browder pioneered Magnitsky sanctions, named after his murdered lawyer, which target Russian bigwigs. For years, supposedly knowledgeable people pooh-poohed such measures. Now, they are part of the arsenal of statecraft. Also at Davos was Britain’s David Cameron, formerly prime minister and now foreign secretary and a born-again foe of the Putin regime. Better to seize Russian assets now, he said, than wrangle about reparations later.

Yet so far, Western countries have mostly tiptoed around this subject, issuing empty political statements or suggesting half-measures such as diverting the profits from Russia’s holdings, but not the assets themselves. Estonia’s admirable initiative in preparing the necessary legislation has not been echoed yet, at least even in other frontline states.

Do these decision-makers think they will gain points for hesitancy? Seizing Russia’s assets is morally, politically, legally, and strategically right. It dismays the Putin regime and bolsters Western credibility. The sooner we do it, the better.


Edward Lucas is a Non-resident Senior Fellow and Senior Adviser at the Center for European Policy Analysis (CEPA).