How Estonia Sets an Example for the West in Seizing Russian Assets

Tallinn has been unequivocal in supporting Ukraine long before the Russian invasion.

This Baltic state today can play a major role in the global process of seizing Russian assets. Estonia has every chance to become the first country to transfer funds from the sale of confiscated Russian assets to Ukraine.

Estonia has also taken a proactive position regarding the fate of the frozen Russian assets following the full-scale invasion.

Thus, in May 2022, Estonia, together with Latvia, Lithuania, and Slovakia, called for spending frozen Russian assets - both state and sanctioned oligarchs - to rebuild Ukraine.

In their declaration, the EU and other countries called on "to introduce an international mechanism of compensation for the war, using Russian assets to finance the use of confiscated private or corporate assets to fund Ukraine's reconstruction and recovery."

The year 2023 began with an unexpected statement by a representative of Estonia's Ministry of Foreign Affairs, Mihkel Tamm, who said the legislative framework would be in place by the end of January. The country's government tasked ministries back in late December to develop an asset confiscation plan.

This initiative has every chance to find support in the Estonian parliament - the Riigikogu. After all, both the parliamentary majority and the opposition declare a clear pro-Ukrainian position.

Currently, neither the content of the Estonian legislation nor the tools are unknown.

However, the value of the Estonian experience of confiscating Russian assets may be greater than it seems.

Estonia's decision and experience as a pioneer will have important practical significance for further working with Russian assets. It may become a model for other EU member states sooner than Brussels develops its own mechanism.

At the same time, EU membership also restricts Tallinn from confiscating Russian assets.

Although official Brussels welcomed Estonia's efforts to confiscate Russian assets, it asked not to hurry with its implementation. The representative of the European Commission, Christian Wiegand publicly called for a delay in foreign asset confiscation legislation for Estonian legislation to comply with future EU regulations on the matter.

The European Commission's concerns may be related to the risks of a potential conflict between Estonian and European legislation.

If Estonia's actions are successful, it will start the process of real confiscation of Russian assets. It could open the possibility for Ukraine to receive sums that exceed ten times the Estonian GDP.