In a significant move, the UK has introduced new legislation that empowers ministers to maintain sanctions on Russia until compensation is paid to Ukraine. This development paves the way for the eventual seizure of frozen Russian assets, which can then be directed towards the reconstruction efforts in Ukraine.
The enactment of these laws represents a significant departure from the previous purpose of sanctions, which primarily aimed to protect Ukraine’s territorial integrity. Many Western powers had been reluctant to endorse asset seizures, fearing it would establish a precedent for the seizure of Western assets held abroad.
The UK government clarifies that these new laws do not amount to asset forfeiture and can only be utilised when there is evidence of criminal conduct. These measures are being implemented in anticipation of the Ukraine recovery conference in London. Critics may view this as an attempt to preempt demands for more definitive action.
The revised purpose of the sanctions will be to maintain them until Russia agrees to pay compensation, shifting the focus from protecting Ukraine’s territorial integrity. The UK is the first government to take these initial steps and acknowledges that their resolution may require time and consultation.
Additionally, the new measures will compel designated individuals to disclose all assets held within the UK. Failure to comply with this requirement will result in fines or asset seizure. Moreover, individuals will be obligated to disclose any Russian sovereign assets they possess in the UK, providing the government with more precise data on the extent of Russian central bank assets in the country. However, this information will not be disclosed publicly.
Furthermore, a minor measure will streamline the process for individuals under sanctions to voluntarily transfer and contribute their assets to Ukraine for its recovery efforts.
Foreign Secretary James Cleverly emphasised the UK’s commitment to supporting Ukraine in the face of Russia’s invasion, expressing solidarity with Ukraine and its quest for recovery and prosperity. Chancellor Jeremy Hunt underscored the need for Russia to bear financial responsibility for the devastating consequences of its actions in Ukraine. These new measures, in conjunction with the UK’s extensive sanctions package, demonstrate the country’s determination to facilitate the flow of Russian funds to benefit the Ukrainian people.
Officials emphasise that these measures are not definitive but rather establish a framework for collaborative development with international partners to ensure that sanctioned Russian assets can be employed as compensation. There will be no coercion of individuals to encourage fund transfers, nor will there be any offer of sanctions relief in exchange for donations.
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