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Introducing new legislation could give us the power to use sanctioned oligarchs’ assets to help re-build Ukraine

3 min read

The fishing net of asset freezes on oligarchs, Vladimir Putin sympathisers and Russian perpetrators of war on Ukraine is closing.

With some justification, it had been argued that the UK was behind the curve in terms of instigating sanctions against Russia.  This was correct in terms of individual sanctions, but less so when it came to sector based sanctions, such as finance and military sales, where the UK very much led from the front.  But the UK has now also caught up with individuals. 

Following the rapid enactment of the Economic Crime Act earlier this week, new categories of individuals became eligible for sanctioning including whole collective groups, such as members of the Duma and individuals who had already been processed for sanctions by the EU and the US.

The key sanctioning countries have more or less remained united and in lock-step.  At the same time effective and concerted efforts have been made by those same countries to ensure compliance by other key countries who historically may not have been so keen on sanctions; Japan for instance.

But with this effective phase of sanctions in place, a further issue is becoming more apparent, namely what should be done with sanctioned assets.  It is important to keep in mind that these assets, bank accounts, houses and boats for instance, have been frozen but not sequestrated. 

I would personally certainly support sequestration laws

Whilst the public may assume that these assets will be put towards the rebuilding of Ukraine, I do not currently see how this would be the legal position. Indeed, in the event of the cessation of war I imagine there would be a flood of requests for assets to be returned.  Well-funded court cases would soon follow.

It may be that some of the sanctioned individuals have committed crimes or would be valid subjects for Unexplained Wealth Orders – but many of them may not.  Buying nationalised Russian assets cheaply, is not in itself a crime and nor are occasional meetings with the President of your country – even if he happens to be Putin.  Many of those sanctioned will have had little to do with Ukraine, let alone involvement in the war.

We are freezing these people’s assets as part of our strategy to undermine Putin, the Russian State and its war machine. 

There comes a point when the crimes of a country become so heinous that we need to take the view that individual rights become subsumed by the need to defeat the perpetrators. Of course, this goes well beyond direct action on oligarchs, as almost every Russian citizen will be indirectly affected by financial sanctions placed on Russia and its businesses.  However, if we take the view that this should include the sequestration of assets for the purpose of rebuilding Ukraine, then that will most likely need to be reflected in new legislation.

As things stand, the government has made no comment on this issue, let alone announced new legislation; although there have been murmurings that Secretary of State for Housing, Michael Gove, is interested in sequestering Russian homes. I would personally certainly support sequestration laws.

Sources advise me that this matter is being discussed by ministers and internationally between allies.  This is of course a relevant question for other countries as well as the UK.  I hope that a decision is made quickly as the public and MPs are certainly likely to have strong views on the issue.


Jonathan Djanogly is the Conservative MP for Huntingdon.

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