Introduction: locating the legal problem beyond headlines

The announcement by the Central Bank of the Russian Federation that it intends to sue European banks in Russian courts over the continued immobilisation of Russian sovereign assets has reignited a complex and unresolved debate in public international law. The issue does not concern banking law in isolation, nor can it be reduced to a bilateral economic dispute between Russia and Europe. Rather, it lies at the intersection of state immunity, international sanctions, and the law of state responsibility, within the broader framework of the United Nations Charter system.

The critical legal misstep in much public commentary is the implicit assumption that Europe is a party to the armed conflict. It is not. The war is between Russia and Ukraine. Europe’s actions are legally derivative: they arise from its position as a third party responding to what has been widely characterised as a grave breach of international law—namely, Russia’s unlawful use of force against Ukraine. This distinction fundamentally shapes the legality of asset freezes and explains why Europe has adopted an unusually cautious legal architecture rather than outright confiscation. 

The legal object of the dispute: immobilisation versus confiscation

At the centre of the controversy is not confiscation but freezing (immobilisation) of assets. This distinction is doctrinally essential.

Freezing entails restrictions on access, transfer, and economic use while leaving legal title intact. Confiscation, by contrast, permanently divests the owner of property rights. Contemporary EU measures, as reported, are framed explicitly as indefinite immobilisation, often accompanied by proposals for guarantees, offsets, or asset-backed loan mechanisms, rather than direct expropriation.

This design choice reflects sensitivity to the Articles on Responsibility of States for Internationally Wrongful Acts (ARSIWA). Under ARSIWA, countermeasures must be temporary, proportionate, and reversible “as far as possible,” and must aim at inducing compliance with international obligations rather than punishing the responsible state (ILC, 2001, arts. 49–53).

Permanent confiscation would sit uneasily with these requirements. Indefinite freezing, while legally uncomfortable, occupies a narrower and more defensible space: it preserves formal ownership and can be justified as contingent upon cessation of the wrongful act and the establishment of a reparations framework. This explains why the EU has resisted calls for outright seizure despite political pressure.

Why the Russia–Ukraine character of the war is legally decisive 

The legality of Europe’s actions cannot be assessed in abstraction from the underlying armed conflict. Russia’s invasion of Ukraine constitutes a prima facie violation of Article 2(4) of the UN Charter, which prohibits the use of force against the territorial integrity or political independence of another state (UN Charter, 1945). 

This characterisation is reinforced by UN General Assembly Resolution ES-11/1, which expressly deplores Russia’s aggression against Ukraine, and subsequent resolutions affirming Ukraine’s right to remedy and reparation (UNGA, 2022; UNGA, 2023). While General Assembly resolutions are not binding, they carry significant normative weight in identifying opinio juris, particularly where Security Council action is blocked. 

Under ARSIWA, a state responsible for an internationally wrongful act is under an obligation to make full reparation for the injury caused, a principle famously articulated in Factory at Chorzów and incorporated into modern codification (PCIJ, 1928; ILC, 2001, art. 31). Reparations are therefore not a political aspiration but a legal consequence.

The central legal question thus becomes: 

            May third states, within whose jurisdiction the responsible state’s assets are located, temporarily immobilise those assets as part of a lawful response to an ongoing internationally wrongful act? 

This question is categorically different from whether Ukraine may seize Russian assets abroad, or whether belligerents may confiscate enemy property in wartime. It concerns the lawfulness of third-state, non-forcible measures taken in support of Charter enforcement and future reparations.

Central bank assets and the doctrine of state immunity 

Russia’s strongest legal shield lies in state immunity, particularly the enhanced protection accorded to central bank reserves. Customary international law has long recognised that central bank property enjoys special immunity from enforcement measures, reflecting the systemic importance of reserve stability to the international financial system (Fox and Webb, 2015).

Russia’s argument is likely to proceed on three interlinked bases:

1. Central bank assets are immune from execution.

2. ⁠Immobilisation and any economic “use” of those assets violate that immunity.

3. ⁠Private custodians (banks and depositories) incur liability by participating in such violations.

The EU’s counter-argument rests on a different legal axis. European banks are not autonomous actors; they are complying with binding EU legal instruments. In international law, responsibility for such measures attaches to the state or supranational entity that mandates them, not to private intermediaries acting under compulsion. 

This explains the EU’s internal focus on guarantees and offset mechanisms, particularly in relation to Belgium, where Euroclear holds a significant portion of immobilised Russian assets. These measures are not mere political gestures; they are legal risk-management tools designed to shield private actors from retaliatory exposure while maintaining the integrity of sanctions compliance. 

The countermeasure dilemma: third-state action and “indefiniteness”

The most intellectually contested issue concerns countermeasures by third states. Classical doctrine conceives countermeasures as actions taken by an injured state against a responsible state (ARSIWA, art. 49). Ukraine clearly qualifies as the injured state. EU member states, formally, do not.

However, modern international law has increasingly grappled with the permissibility of collective or third-party responses to grave breaches of fundamental norms, particularly where obligations breached are erga omnes or erga omnes partes in character (Crawford, 2013).

Scholarly opinion remains divided. One line of argument holds that third-state countermeasures undermine the bilateral structure of responsibility and risk-normalising economic coercion. Another contends that strict bilateralism is inadequate in the face of aggression and that limited, non-forcible collective measures are necessary to preserve the Charter system.

The EU’s reluctance to move beyond freezing into confiscation reflects this unresolved doctrinal tension. By framing asset immobilisation as temporary pressure linked to compliance, settlement, or reparations, the EU attempts to remain within a defensible—if contested—legal envelope. 

The descriptor “indefinite” remains problematic, as it strains the requirement of reversibility. Yet it remains easier to justify than permanent seizure, particularly if explicitly tethered to legally recognisable endpoints such as cessation of hostilities or the establishment of a reparations mechanism.

Russian litigation in Russian courts: jurisdiction and enforceability

Russia’s decision to pursue claims in its own courts raises immediate questions of recognition and enforcement. Judgments rendered in Russian courts against European banks are unlikely to be enforced within EU jurisdictions where the underlying conduct constituted lawful compliance with EU sanctions and where enforcement would offend public policy. 

Nevertheless, the effectiveness of litigation cannot be measured solely by transnational enforceability. Even domestically confined judgments can function as instruments of retaliatory pressure, enabling asset seizures within Russia, increasing compliance costs, and reinforcing narratives of illegality and economic destabilisation. 

In this sense, the lawsuits are less about judicial vindication than about economic statecraft—using legal process to impose friction within global financial infrastructure.

The deeper legitimacy question: responsibility versus systemic stability

The underlying moral-legal question persists: why should Europe bear economic risk for a war it did not start?

International law does not require third states to remain neutral in the face of aggression. On the contrary, the Charter system presupposes collective responses to serious breaches. At the same time, international law fiercely protects sovereign immunity and the integrity of central bank reserves because these norms underpin global financial stability.

The EU’s current approach—freezing without confiscation, leveraging assets without transferring title, and embedding responses in institutional mechanisms rather than ad hoc seizures—reflects an attempt to reconcile these competing imperatives. 

The December 2025 developments demonstrate continued caution: substantial financial support for Ukraine has been agreed upon, yet direct use of frozen assets remains legally contested, with Belgium’s position remaining pivotal due to Euroclear’s exposure. Parallel efforts to establish claims and reparations frameworks further suggest a preference for institutionalised legality over expedient confiscation. 

Conclusion: international law under strain, not in silence

The dispute over frozen Russian central bank assets is not evidence of a legal vacuum. It is evidence of international law operating at its limits.

Europe’s legal defence is strongest when asset immobilisation is framed as a non-forcible, proportionate, and conditionally reversible response supporting Charter enforcement and future reparations. Russia’s legal challenge is strongest when it frames the same measures as violations of central bank immunity and de facto expropriation, deploying domestic litigation as a tool of retaliation and leverage. 

Ultimately, the law is not silent; it is conflicted. It is balancing accountability for aggression against the systemic stability of sovereign immunity. How this balance is struck in the Russian asset context will shape not only the outcome of the Ukraine war’s financial aftermath but also the future credibility of the international legal order itself. 

Key references (indicative)

International Law Commission (2001) Articles on Responsibility of States for Internationally Wrongful Acts.
United Nations Charter (1945), Article 2(4).
UN General Assembly Resolution ES-11/1 (2022).
UN General Assembly Resolution ES-11/5 (2023).
Factory at Chorzów (Germany v Poland) (1928) PCIJ Series A No 17.
Crawford, J. (2013) State Responsibility: The General Part. Cambridge University Press.
Fox, H. and Webb, P. (2015) The Law of State Immunity. Oxford University Press.