The European Union is struggling to find and freeze the assets of sanctioned Russian billionaires, with the total figure increasing only modestly in recent months.
(Bloomberg) — The European Union is struggling to find and freeze the assets of sanctioned Russian billionaires, with the total figure increasing only modestly in recent months.
The bloc has so far frozen €20.9 billion ($22 billion) in assets, even though the EU has targeted Russia with 10 rounds of sanctions since President Vladimir Putin’s invasion of Ukraine more than a year ago. Back in October, the bloc reported that some €17.4 billion had been frozen.
While Belgium and Luxembourg have immobilized billions, other member nations have disclosed nearly negligible figures, with Greece saying it has frozen only €212,201 and Malta reporting €222,470, according to the latest numbers, seen by Bloomberg.
Officials believe there are substantially more assets of sanctioned Russian individuals that could potentially be targeted. In 2019, Russia’s Foreign Direct Investment stock in the EU was estimated at €136 billion, according to official statistics.
But many billions more would have entered the bloc through bank accounts of Russian nationals, as well as property and other portfolios. Not all Russian funds that have entered the EU will be linked to sanctioned individuals, and identifying them isn’t always straightforward, as assets are often hidden behind complex company structures or intermediaries.
The EU has sanctioned almost 1,500 individuals, restricted exports on hundreds of goods and technologies, and targeted many of Moscow’s key revenue sources. But some officials worry that the bloc still lacks an effective apparatus to enforce those measures and lags behind the US on cracking down on circumventions.
A spokesman for the EU’s executive arm, Christian Wigand, said that total of assets frozen in the bloc has more than tripled since April 2022, and comes on top of blocks put on the substantial assets of Russia’s central bank. He also added that the EU relies on information provided by members states and that the frquency of the updates provided by different governments is uneven.
Efforts by the EU so far, including a move last July to put the burden of declaring assets on sanctioned individuals and entities, haven’t helped much. In the latest sanctions package, EU nations agreed to introduce some obligatory reporting requirements on banks and other operators but resisted efforts to impose fines on those that don’t comply.
Member states have also yet to back proposals to extend the listing criteria to family members and associates of sanctioned individuals who may be helping to shield or shuffle their assets around.
‘Freeze and Seize’
A year ago, the EU set up a “freeze and seize” taskforce to improve coordination among member states, which remain in charge of enforcing EU sanctions.
This taskforce has a critical role to study how criminal and tax law can be used for the reconstruction of Ukraine and will be at the “forefront of an important part” of the work already started by the European Commission, “to map and trace immobilized public assets,” EU Justice Commissioner Didier Reynders said last month. “This is necessary to make progress in our reflections on the possible use of such assets.”
The Group of Seven nations recently announced a new mechanism to bolster enforcement and improve information sharing among allies. The EU has also introduced several tools in its recent packages to go after those aiding Russia but has mostly shied away from using those, at least publicly.
The EU is also working on new rules to criminalize sanctions evasion and is studying the feasibility of using billions of euros worth of Russian central bank assets already frozen by member states to help with Ukraine’s reconstruction efforts.
–With assistance from Zoe Schneeweiss.
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