The necessary legal framework has already been created, and Estonia is coordinating further steps with Ukraine.
Estonia’s intentions are of a pre-emptive nature. Tallinn assumes that if after the end of the conflict in Ukraine the damage to the country is fixed in international instances in The Hague, Ukraine sues Russia and Moscow refuses to pay compensation, then Estonia will be able to use the frozen private assets of Russian citizens through this mechanism. This was stated by Foreign Minister Margus Tsakhkna, who was quoted by iz.ru.
The law has been adopted, but its application is becoming more complicated
Estonia has been one of the most active lobbyists for such a decision in the EU for several years. In 2023, the country was the first to start drafting national legislation on the subject.
The relevant law has been adopted, but its application in practice faces limitations. Property subject to EU sanctions can be frozen, but the law itself does not create an automatic procedure for its confiscation.
At the same time, Russia warns that a response is inevitable. It may concern the regime of Estonian economic activities in the border zones, including fishing and shipping, as well as the revision of Estonian vessels’ access to Russian territorial waters, which are critical for the logistics of certain ports.
The Estonian side estimates the total amount of blocked assets at €37-39 million. As Margus Tsahkna specified earlier, a significant part of these assets is related to the transit of Russian fertilizers.
There is no unanimity in the European Union on the issue of confiscation
The topic of using frozen Russian sovereign and private assets to support Ukraine has been discussed since the beginning of the war. The bulk of them – over €200bn – are blocked in the EU.
Brussels emphasizes that the direct seizure of assets is difficult due to the lack of a unified legal framework. In particular, the accounts of the Belgian depository Euroclear hold $224.5bn of them.
So far, there is no unanimity in the European Union on full confiscation. While Estonia, Lithuania, Latvia, Poland and a number of other countries are actively promoting a hard line, Belgium (where the bulk of sovereign assets are kept), Italy and France express serious concerns due to legal and financial risks.
