Thursday, August 11

Switzerland resists Ukrainian plan to seize frozen Russian assets | Ukraine


Ukrainian plans to seize as much as $500bn (£418bn) in frozen Russian assets to fund the country’s recovery have met firm resistance from Switzerland, the hosts of an international two-day Ukraine recovery conference.

The Swiss president, Ignazio Cassis, pushed back on the plan, saying protection of property rights was fundamental in a liberal democracy. He underlined at a closing press conference the serious qualms of some leaders that proposals to confiscate Russian assets will set a dangerous precedent and needed specific legal justification.

“The right of ownership, the right of property is a fundamental right, a human right,” he said in Lugano, adding that such rights could be violated, as they had during the pandemic, but only so long as there was a legal basis .

He added: “You have to ensure the citizens are protected against the power of the state. This is what we call liberal democracies.”

Switzerland is one of many countries with tight banking secrecy laws that is not enthusiastic about seizing private property for political purposes.

The idea has won the endorsement, in principle, of the UK foreign secretary, Liz Truss.

Cassis said it was legitimate to freeze assets to clarify their ownership and whether there was either any causal link with the war or with a crime that had been committed, but the principle of proportionality under international law also had to be considered.

“We have to accord the most important attention on the fundamental right of individuals, because now we can make a decision, which is perfect for the situation in Ukraine, but we create the possibility to take the same decision in many other possibilities and you give much more power to the states, away from the citizen,” he said.

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The Ukrainian prime minister, Denys Smihal, acknowledged it was only the beginning of a discussion, but he refused to back down on an idea that he repeatedly touted during the conference. “We propose to find a formula to create national and international legislation for the possibility of confiscation of frozen assets in case of unprovoked aggression, which will be rules,” he said.

“We, as a country, which is under this unprovoked aggression, will very loudly speak about this possibility because we understand that an aggressor who kills our people, destroys our infrastructure, our schools, our hospitals should pay for this.”

I have claimed $300-$500bn of Russian assets had been frozen worldwide.

In Switzerland, Cassis has been stalling on the issue in parliament and has come under pressure from social democrats to introduce laws allowing for the confiscation of assets.

In April, the state secretariat for economic affairs (SECO) announced it had frozen CHF9.7bn (£8.4bn) of Russian assets, but since then some of that money has been released. One disputed issue is the extent to which family members of a sanctioned oligarch can retain the property in Switzerland.

In March, the industry body representing Switzerland’s banks, the Swiss Bankers Association (SBA), released a study estimating there was CHF150bn-CHF200bn held in accounts for Russian citizens. At the end of last year, the total cash held on behalf of customers by Switzerland’s banks was CHF7,879bn, more than half of which was wealth from abroad, according to the SBA.

Individual property rights are enshrined in article 26 of the Swiss constitution, and “any limitation of fundamental rights must be justified by public interest”.

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