Some Western countries are looking to play Robin Hood by taking Russia’s money and giving it to Ukraine, but it’s not as simple as swooping in with a crossbow and green tights.
What happened: German Chancellor Olaf Scholz’s government is open to the idea of redistributing frozen Russian assets to help Ukraine rebuild from the war (~€4.48 billion worth of assets are currently frozen in the country) but only if its allies do the same.
- The EU is also in discussions around redistributing frozen Russian assets—an alluring option since it’s set to finance most of Ukraine’s US$349 billion rebuild out of pocket.
Yes, but: The EU and the US (which has a whopping ~US$330 billion in frozen Russian assets) are reluctant to actually seize assets, fearing the move could create sticky new legal precedents and undermine their credibility as a destination for foreign investment.
In Canada: As the EU debates whether or not seizing assets is a good idea, Canada already committed to it in June, giving itself the legal ability to confiscate funds from foreign actors that have breached international peace and security (read: Russia).
- The feds are now taking the new measure out for a spin, announcing last month that they plan to seize US$26 million worth of assets from oligarch Roman Abramovich.
Why it matters: Canada is the first G7 country to announce plans to redistribute Russian assets to Ukraine, risking the potential downside of losing credibility as a place for foreign investment. But, it could also set a new global precedent and give other countries a framework for carrying out similar legislation.