Ukrainian plans to seize up to $500bn (£418bn) of frozen Russian assets to fund the country’s recovery have met stiff opposition from Switzerland, which is hosting an international two-day conference on Ukraine’s recovery.
Swiss President Ignazio Cassis rejected the plan, saying the protection of property rights was fundamental in a liberal democracy. At the closing press conference, he highlighted the serious concerns of some leaders that the proposals to seize Russian assets would set a dangerous precedent and needed concrete legal justification.
“The right to property, the right to property is a fundamental right, a human right,” he said in Lugano, adding that such rights can be violated, as was the case during the pandemic, but only as long as there is a legal basis.
He added: “You have to ensure that citizens are protected against the power of the state. This is what we call liberal democracies.”
Switzerland is one of many countries with strict bank secrecy laws that are not enthusiastic about seizing private property for political purposes.
The idea received the support in principle of the Foreign Secretary of the United Kingdom, Liz Truss.
Cassis said it was legitimate to freeze assets to clarify their ownership and whether there was any causal link to the war or to a crime committed, but the principle of proportionality under international law must also be taken into account.
“We have to pay the most important attention to the fundamental right of the people, because now we can make a decision that is perfect for the situation in Ukraine, but we create an opportunity to make the same decision in many other opportunities, and you give much more power to countries, far by the citizens,” he said.
Ukrainian Prime Minister Denys Smykhal admitted that this was only the beginning of a discussion, but refused to give up on an idea that he repeatedly raised during the conference. “We propose to find a formula to create national and international legislation on the possibility of confiscation of frozen assets in case of unprovoked aggression, which will be rules,” he said.
“We, as a country that is under this unprovoked aggression, will speak very loudly about this possibility, because we understand that an aggressor who kills our people, destroys our infrastructure, our schools, our hospitals, has to pay for it.
He claims that $300-$500 billion in Russian assets have been frozen worldwide.
In Switzerland, Cassis stalled on the issue in parliament and came under pressure from the Social Democrats to introduce laws allowing confiscation of assets.
In April, the State Secretariat for Economic Affairs (SECO) announced it had frozen 9.7 billion Swiss francs (£8.4 billion) in Russian assets, but some of that money has since been released. One contentious issue is the extent to which family members of a sanctioned oligarch can keep their assets in Switzerland.
In March, the Swiss Bankers’ Association (SBA), the industry body representing Swiss banks, published a study that said there were 150-200 billion Swiss francs in the accounts of Russian citizens. At the end of last year, total cash held on behalf of clients by Swiss banks was 7.879 billion Swiss francs, more than half of which was wealth from abroad, according to the SBA.
Individual property rights are enshrined in Article 26 of the Swiss constitution and “any restriction of fundamental rights must be justified by the public interest”.
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