Author: Ivan Horodyskyy

On Wednesday, February 21, a group of international lawyers, including Philippe Sands and Harold Koh, published an open letter calling for the seizure of Russian assets as a countermeasure under international law. At the same time, they refer to "a detailed analysis of this issue that was provided to the governments concerned" — a special memorandum in which another well-known lawyer, Dapo Akande, participated.

This memorandum, distributed in November 2023, is a voluminous 82-paragraph document that provides a detailed justification for the permissibility of seizing the sovereign assets of the Russian Federation from the position of international law. This is not the first attempt to propose to the international community a solution to the problem of sovereign immunities, including using countermeasures under the UN Charter.

However, this is the first time that this idea has been formulated and supported by such a representative circle of international lawyers, including representatives of leading universities in the United States, the UK, and Europe and a member of the UN International Law Commission.

Content of the proposal

The main idea of the memorandum is that the legitimacy of the seizure of Russian state assets as a countermeasure is justified by Russia's aggression against Ukraine, which is a gross violation of erga omnes — the universal obligations of States to the international community as a whole (§1, §49).

Analyzing the previous practice, experts note that both blocking (freezing) of Russian assets and seizure are identical countermeasures, as they are taken in response to violations of erga omnes obligations (§59). 

In the memorandum, the authors initially note that seizure as a countermeasure applies only to state-owned, sovereign assets of the Russian Federation (§1), and this approach — countermeasures in response to the erga omnes violations — cannot be applied against private entities, because: “It is, after all, the State that is in breach of its erga omnes obligations under international law, not any Russian companies or individuals (although they might be complicit in or contribute to the State’s unlawful conduct), and it is therefore the State against which any lawful countermeasures must be taken” (§69).

The authors cite three main obligations that have been violated by Russia, which allow for the application of countermeasures to Russia, including in the form of seizure:

• prohibition of the use of force or threat of force under Article 2(4) of the UN Charter;
• the principle of inviolability of borders according to the UN Declaration of Principles of International Law of 1970;
• Russia's failure to comply with the provisional measures imposed by the International Court of Justice (hereinafter — the ICJ) on March 16, 2022.

The procedure for applying countermeasures and their legitimacy are substantiated in the document on the basis of the Draft Articles on Responsibility of States for Internationally Wrongful Acts of 2001 (hereinafter — the Draft Articles). The memorandum states that although this document "has not been incorporated into a draft convention opened for signature, it represents the most authoritative statement of customary international law on State responsibility, and is frequently cited as such in the Judgments of the ICJ and other international tribunals" (§23).

Countermeasures in the form of seizure of frozen assets of the Russian Federation, according to the memorandum, "would be compensatory, not punitive" (§66) and aimed at achieving the two goals envisaged by the Draft Articles:

• cessation of the violation by the wrongdoing State (Article 30), and
• fulfillment of the obligation of the wrongdoing State to compensate for the damage caused by the violation (Article 31(1)).

Experts emphasize that in the event of the cessation of aggression and if the damage from it is estimated below the amount of seized assets, the Russian Federation will be able to demand the return of the difference, not the entire amount seized (§35), which will meet the requirements of the Draft Articles on the proportionality of such measures. However, at the same time, the memorandum is admitted that: “Since the authoritative estimates of the financial costs of such a recovery are far greater than the total amount of frozen Russian State assets, there is no risk that the proposed measures would involve transfers of assets in excess of Russia’s ultimate liability” (§66),

The application of countermeasures against Russia must be unilateral, as it is a "decentralized and voluntary obligation" (§40), and States must make appropriate decisions at the level of governments or parliaments, which will not be justiciable (§72). At the same time, the authors note that any State may take such countermeasures against the Russian Federation, as all States may be treated as injured parties due to the violation of erga omnesobligations (§46).

In the case of sovereign immunities, which are most often cited as an insurmountable obstacle to the seizure of Russian assets, experts believe that this will not be a problem, since their protection: “is lost when the offending State breaches obligations owed to an injured State or the international community as a whole, and thus subjects itself to the lawful imposition of countermeasures which might be unlawful absent the breach” (§72).

The authors of the memorandum cite examples of U.S. practice where frozen assets of Cuba, Iran, and Iraq were used in some cases to compensate American citizens who suffered from international illegal acts of the authorities of these countries. Another practical example, in their opinion, is Canada's special legislation on asset forfeiture adopted in June last year (§61).

They note that both examples (although not countermeasures by nature) prove the legitimacy of compensating their own citizens by using frozen assets of other States. Thus “there is no persuasive legal argument against the transfer of such assets to injured parties in other States, especially if this is undertaken to induce the offending State to fulfil its legal obligations to the injured parties, including its obligation to provide reparations for the injuries it has inflicted” (§62).

Further use of the seized assets of the Russian Federation, according to the authors of the memorandum, is possible within the framework of an international compensation mechanism, to which these assets should be transferred (§§31, 67–68, 78). The purpose of the mechanism, in this case, would be "to ensure the effectiveness of the transfer of funds in compensating Ukraine and others for the injuries they have suffered" and to ensure that the compensation process is "transparent, evidence-based and equitable to all interested parties" (§68).

At the same time, the memorandum expresses skepticism about the possibility of Russia challenging the countermeasures in international courts. According to the experts, Russia's appeal to international courts to apply countermeasures is unlikely due to the previous facts of its non-recognition of their jurisdiction and is all but certain to fail given the lawfulness of the countermeasures proposed in the memorandum (§71).

Thus, the memorandum offers a fairly clear and systematic justification of a number of the most authoritative representatives of the doctrine and practice of international law. Nevertheless, a number of his theses raise questions and reservations.

Possible risks

The main gaps in the memorandum include the following:

• the document emphasizes that States that control Russian sovereign assets can take countermeasures through executive and legislative decisions, and these decisions will not be justiciable (§72). At the same time, the argument that sovereign immunities apply only to the jurisdiction of courts over the property of other States and do not apply in cases of violation of erga omnes obligations may require confirmation in the framework of national court decisions. Although the out-of-court approach is much more flexible, the lack of judicial oversight can call into question the legitimacy of countermeasures and create risks for decision-makers in the future;
• The proposed approach, which de facto implies unilateral political and administrative decisions by States in violation of international law, is an extremely radical interpretation of the principle of sovereign immunity and may not be fully accepted by academic, practical, and political circles. It seems that in interstate relations over many decades, the principle of sovereign immunities has acquired a broader meaning than the exclusion of property of some States from the judicial jurisdiction of other States;
• The authors emphasize the unlikelihood and unsuccessfulness of Russia's application to international courts regarding the application of such countermeasures. First, it is difficult to predict the actions of the Russian Federation, which may hybridize this issue and, under certain circumstances, apply to the ICJ — illogical and inconsistent actions have never been an obstacle for the Russian authorities. On the other hand, it is impossible to categorically predict the content of the ICJ's decisions, especially in light of its recent rulings on Ukraine. There is a risk that the judges will take the most vague position possible, which will leave the issue of recognizing the legitimacy of these measures in limbo;
• The memorandum does not raise the issue of retroactive application of this approach to understanding sovereign immunities. Today, the world continues to make claims against Germany for reparations for World War II, in particular from Poland, as well as Italy, Greece, and others. Other States may use the same approach in the future and make certain decisions to ensure compensation from Germany's sovereign assets. Obviously, it is difficult to imagine this from a political point of view, but the theoretical possibility exists;
• The problem of unreasonable application of this approach could be avoided by additional justification of the exceptional situation with regard to aggression against Ukraine, but the memorandum considers aggression as an international illegal act in general, and the proposed approaches are also universal. On the one hand, this avoids criticism of the unilateral nature of the conclusions, but on the other hand, it creates the aforementioned risks of their excessive use for the purpose of seizure of assets in different ways and by different entities;
• The reference to the seizure legislation of Canada as an example of state practice in the use of assets, which confirms the validity of the proposed approach, raises certain doubts. To date, there have been no significant seizures of Russian assets under the procedure provided for by this law, and no decisions under it have been confirmed in court;
• Also, the memorandum, as a document prepared by leading researchers of international law, is a legal doctrine. Although there is no formal hierarchy of sources of international law, given that, unlike treaty and customary norms, the doctrine is formed without the consent of subjects of international law, it can be considered only a subsidiary source. Although the list of sources of international law in Article 38(1) of the Statute of the International Court of Justice lists the doctrine in the same paragraph as decisions of international courts, it seems that the position of international justice (e.g., the Advisory Opinion of the International Court of Justice) could be a stronger form of confirmation of the arguments presented in the memorandum;
• Also, in the wording of Article 38(1) of the Statute of the International Court of Justice, the doctrine is defined as the teachings of the most highly qualified publicists of the various nations. Although the six main authors of the memorandum represent different countries (Britain, Belgium, the Netherlands, Germany, and Japan), and the letter was also supported by representatives of the United States and France, in the context of the political division of the world into "Global North" and "Global South," opponents of their position may accuse them of a lack of geographic diversity among the authors and, as a result, express prejudice against the content of the memorandum as a whole.

What's next

In addition to being prepared and distributed to the governments of the States that control the frozen assets of the Russian Federation, this memorandum is being actively advocated by its authors. The public letter, which was supported by three other international lawyers, is also one of these steps.

In addition, one of the authors, Pierre Klein, Professor of Law at the Free University of Brussels, presented the main points of the memorandum at the hearing of the Belgian House of Representatives' Committee on International Relations on the resolution on the seizure of Russian assets in Belgium for the restoration of Ukraine.

At the same time, despite the importance of this memorandum (it is the first time that such a well-reasoned and authoritative justification of international legal mechanisms for the seizure of Russian assets has appeared), it is unlikely that its influence alone will be sufficient to implement the seizure of assets. It is likely that for this purpose, the common positions and vision of the States will need to be fixed, for example, in an international treaty that would use both the approaches laid down in this document and the documents cited, in particular, regarding the exceptional situation with Ukraine and, in this regard, would provide additional conditions for the application of countermeasures and the invalidity of sovereign immunities.

However, in any case, the emergence of this document is an important breakthrough on the way to securing compensation for Ukraine. The solutions proposed in the memorandum have been discussed for a long time, and it is of strategic value that they have been confirmed by such a reputable group of lawyers.

However, the key to their implementation is the ability of the States that control Russian assets to make appropriate decisions.