Since the start of the Ukraine war, yachts belonging to Russian oligarchs have been repeatedly arrested in the EU. According to the EU Commission, however, billionaires too often manage to avoid the penalties. The authority wants to punish this severely in the future.
Luxury yachts, villas, private jets: According to the EU Commission, Russian oligarchs should be able to be expropriated if they circumvent EU sanctions. To this end, the authority proposed defining the evasion of sanctions as a criminal offense throughout the EU. In addition, rules on asset confiscation and confiscation are to be tightened. However, the proposals are likely to fall short of Ukraine’s demands to use Russian state money for reconstruction.
Ten billion euros are at stake
Since the beginning of the war, spectacular police actions against Russian billionaires associated with the Kremlin have repeatedly made headlines – the term oligarchs for these super-rich was coined in the 1990s, when businessmen attained great wealth and influence after the collapse of the Soviet Union. The 78-meter-long luxury yacht belonging to the Russian oligarch Viktor Wekselberg was arrested in Mallorca. And in Tuscany, the mega yacht “Scheherazade” was confiscated, which investigators say may secretly belong to Russian President Vladimir Putin.
Overall, the EU states have frozen assets of Russian oligarchs worth almost ten billion euros since the beginning of the war. But according to the EU Commission, billionaires still manage to get away too often. For example, they bring their yachts into international waters or transfer assets to other owners. This is also due to the fact that circumventing sanctions is not punishable in all EU countries. According to EU Justice Commissioner Dider Reynders, it is basically a criminal offense in twelve countries. In Slovakia and Estonia, on the other hand, it only resulted in administrative penalties.
1000 sanctioned people
The EU Commission therefore proposed including such circumvention of sanctions in the list of EU crimes. This would make it possible to prosecute violations in all EU countries equally and to set minimum penalties. Both the oligarchs and their helpers such as bankers or lawyers should expect penalties, as Reynders said. However, this would not mean that all of the almost 10 billion euros frozen so far could be confiscated.
Since Russia annexed the Black Sea peninsula of Crimea in 2014, the EU has put more than 1,000 people and 80 organizations on the sanctions list. For the people, it means, among other things, that any assets in the EU will be frozen.
But there is a lack of implementation – also in Germany. At the beginning of May, it was said from German government circles that the laws were not aimed at “hunting down oligarchs”. Legal changes should therefore be decided by the summer break of the Bundestag.
facilitate expropriations
Another proposal by the EU Commission should help. It envisages revising the rules on asset confiscation and confiscation. This should make it possible, for example, to expropriate property if it is related to violations of sanctions or attempted violations. In addition, the proposal should fundamentally strengthen the fight against organized crime. According to EU Commission Vice-President Margaritis Schinas, 139 billion euros are earned through criminal offenses every year. Of this, only two percent would be frozen and one percent confiscated.
According to the EU Commission, national authorities should be able to freeze assets early in urgent cases before they can be taken out of the country – even if the criminal proceedings are still ongoing. Expropriations should also be possible in certain cases if there is no conviction. It should be possible to confiscate inexplicable assets linked to criminal activities. And the sale of frozen assets by the state should become easier. The EU states and the European Parliament still have to negotiate the proposals.
More demanded than delivered
According to Reynders, the money recovered from seizures of oligarchs could benefit victims of the Russian war in Ukraine. EU Commission President Ursula von der Leyen said on Tuesday about financing the reconstruction of Ukraine: “We should turn every stone for this – if possible also Russian assets that we have frozen.” In doing so, she was also responding to Ukraine’s demands that the Russian state’s frozen assets be used to rebuild the country.
Also read: Now it is: Italy confiscates suspected Putin yacht “Scheherazade”
The proposals of the EU Commission lag far behind. For one, they ignore the much larger frozen assets of the Russian state. On the other hand, the frozen assets of sanctioned oligarchs should not be confiscated. This should only happen if they violate sanctions or have attempted to do so.
This could possibly allay the concerns of the federal government. Finance Minister Christian Lindner (FDP) said on Tuesday that Germany was open to a debate about using confiscated Russian assets to rebuild Ukraine. At the same time, it had to be considered that a distinction had to be made between state funds – such as the central bank – and private funds. “In our constitution there are guarantees for private wealth.”
