Germany Plans to Confiscate €720 Million of Frozen Russian Assets for the First Time

German Federal Prosecutor Peter Frank has filed a petition with the Higher Regional Court of Frankfurt am Main to confiscate €720 million of frozen Russian assets to the state budget. This may be the first time this has happened, Spiegel reports, citing its own sources.

These 720 million euros belong to a subsidiary of the Moscow Stock Exchange. "The subsidiary is located in Germany. The money itself is currently in the German branch of the large American bank JP Morgan.

Earlier, the subsidiary wanted to save its funds: JP Morgan received a payment order according to which 720 million was to be transferred to the account of another subsidiary of the Moscow Exchange, the National Clearing Corporation, at Commerzbank. But due to EU sanctions, the banks did not make the transfer.

Investigators in Karlsruhe argue that the transfer request was an attempt to circumvent the sanctions, so they could confiscate the Russian money as a means of crime.

If the court approves the confiscation, the Russian funds will be transferred to the federal budget, and the court ruling is pending. This arrest, if it happens, will be a new step in the application of international sanctions against Russia. So far, Germany has only frozen the funds and assets of sanctioned individuals and companies. That is, oligarchs and corporations could not dispose of their money and property, but they remain the owners.

To help readers compare what the €720 million amount means for Germany, Spiegel cited the following data: the currently debated costs of agricultural diesel subsidies are €450 million a year.

In February 2023, the German Federal Ministry of Finance reported that since the beginning of Russia's aggression against Ukraine, the country had seized Russian assets totalling €5.32 billion in connection with sanctions.

At the end of April 2022, the US House of Representatives approved a bill that provides for the confiscation of frozen assets of Russian entities and individuals under sanctions. It is proposed to use the funds to provide additional military and humanitarian assistance to Ukraine.

On 24 June 2022, the Senate of Canada approved a bill that provides for the confiscation of Russian assets.

On 18 November 2022, the European Union froze 68 billion euros of Russian assets, according to an internal European Commission document. The European Union is currently exploring the possibility of using some of the frozen assets of the Bank of Russia to rebuild Ukraine. The discussion is at an early stage, as such steps require a revision of the legal framework.

In October, the Estonian authorities approved and sent to the parliament an amendment to the law on international sanctions, which, among other things, provides for the use of Russian frozen assets to compensate for the damage caused to Ukraine due to the war.