Portugal wobbles over EU proposal to use seized Russian assets to rebuild Ukraine
Image: REUTERS/Alexander Ermochenko

Portugal wobbles over EU proposal to use seized Russian assets to rebuild Ukraine

“Being on sanctions list does not mean sanctioned person loses his or her assets”, says minister

Portugal has shown ‘a major wobble’ with regard to the EU proposal to use seized Russian assets to help rebuild Ukraine.

Talking on the sidelines of the NATO meeting of foreign ministers in Bucharest yesterday, the country’s chief of diplomacy João Gomes Cravinho stressed “there is a distinction to be made between freezing and losing those assets to the state, for other purposes (…) the mere fact of being on a sanctions list does not mean that the sanctioned person loses his or her assets”.

It is a far cry from the bottom line put forwards by President of the European Commission Ursula von der Leyen yesterday, who said: “”Russia must … pay financially for the devastation that it caused (…) The damage suffered by Ukraine is estimated at €600 billion. 

“Russia and its oligarchs have to compensate Ukraine for the damage and cover the costs for rebuilding the country.”

Mr Gomes Cravinho told journalists that he had “not yet analysed the commission’s proposals”, but that “Portugal has laws that must apply”. 

There are circumstances in which the State takes possession of items, he conceded, citing as an example the case of drug traffickers who “see their vehicles or ships lost to the State.”

“But we have our laws; Portugal is a State under the rule of law and will operate according to its laws,” he said. “I don’t yet know what the European Commission’s proposals are; we will look at them for sure. But there is a distinction to be made between freezing and losing those assets to the State, for other purposes.”

This could very well be a situation of Portugal wanting to keep ‘everyone happy’. Authorities have gone from saying early on in the conflict that there was almost nothing in the way of assets to seize in Portugal, to admitting that they have frozen over €18 million-worth.

These assets will almost certainly be linked to Russians holding golden visas/ even Portuguese nationality according to the Sephardic Jew amnesty, etc. – and therefore the situation may be being seen as ‘delicate’.

Portugal has always been extremely coy in revealing how many Russians enjoy Portuguese citizenship, essentially refusing all requests at transparency.

The European Commission’s position however is unwavering: “The damage suffered by Ukraine is estimated at €600 billion euros. Russia and its oligarchs have to compensate Ukraine for the damage and cover the costs for rebuilding the country,” said Ms von der Leyen yesterday, albeit the legalities of this position will have to be debated further at a meeting, later this month, of the G7 taskforce.

What does seem likely is that assets could only be confiscated in the event of criminal convictions. To this end, the European Commission appears to be proposing the establishment of a specialised court, backed by the United Nations, “to investigate and prosecute Russia’s crime of aggression”.

According to a report by Reuters, Moscow has reacted to the words of Ms von der Leyen saying “seizing its funds or those of its citizens amounts to theft”. Russia continues to deny that its invasion of Ukrainian territory constitutes an aggression.

What did Ursula von der Leyen actually say?

Below sees the full text of the commission president’s extremely powerful message which suggests Portugal will now be under pressure to ‘come off the fence’:

“Russia’s invasion of Ukraine has brought death, devastation and unspeakable suffering.

“We all remember the horrors of Bucha.

“First, Russia must pay for its horrific crimes, including for its crime of aggression against a sovereign state.

“This is why, while continuing to support the International Criminal Court, we are proposing to set up a specialised court, backed by the United Nations, to investigate and prosecute Russia’s crime of aggression.

“We are ready to start working with the international community to get the broadest international support possible for this specialised court.

“Secondly, Russia must also pay financially for the devastation that it caused. The damage suffered by Ukraine is estimated at 600 billion euros. Russia and its oligarchs have to compensate Ukraine for the damage and cover the costs for rebuilding the country.

And we have the means to make Russia pay. We have blocked 300 billion euros of the Russian Central Bank reserves and we have frozen 19 billion euros of Russian oligarchs’ money.

In the short term, we could create, with our partners, a structure to manage these funds and invest them. We would then use the proceeds for Ukraine.

And once the sanctions are lifted, these funds should be used so that Russia pays full compensation for the damages caused to Ukraine.

We will work on an international agreement with our partners to make this possible. And together, we can find legal ways to get to it.

“Russia’s horrific crimes will not go unpunished”.

natasha.donn@portugalresident.com