Confiscating Russia’s Frozen Central Bank Assets: A Permissible Third-Party Countermeasure?

Abstract

AbstractThe war of aggression by a permanent member of the Security Council, combined with the availability of its assets on the territory of other states, creates an opportunity to solve one of international law’s enigmas: the legality of third-party countermeasures in the general interest. Would confiscating Russia’s frozen Central Bank assets and making the proceeds available to repair the war damage in Ukraine be permissible as such a countermeasure? This paper argues that state immunity cannot be relied upon to prevent the freezing or confiscation of foreign central bank assets by direct executive action; that freezing foreign state assets is permissible as a third-party countermeasure to stop a serious case of aggression; and that confiscation would not qualify as a countermeasure but may be permissible as a ‘lawful measure’ to repair the damage. Recent changes in Canadian legislation support the existence of such a permissive rule. On the other hand, controversial measures by the United States to control the assets of the Afghan Central Bank demonstrate the need for safeguards against abuse.