Europe they note would suffer the most, as the EU holds 200bn of Russian reserves while the US and other G7 hold very little. Russia will simply respond by confiscating the assets of European companies. “Foreign assets in Russia remain at US$285 billion, 105 of which are owned by European companies, three times more than those from the United States ($36 billion).”

From a legal point of view, the confiscation of sovereign assets causes a number of disagreements among legal experts, since it concerns the immunity of sovereign funds. Sanctions imposed against Russia should be “temporary” and “reversible.” Many attempts and legal loopholes have been proposed in the past to bring the confiscation of Russian assets into line with international law. One of them is to use Russian assets as real collateral for loans to Ukraine. However, this amounts to confiscation because it minimizes the economic value of these assets.

It is also necessary to take into account the risks associated with the associated litigation: Euroclear is already a defendant in Russian courts and will probably never see the money that Russian investors are claiming back. In addition, Belgium faces investment proceedings initiated by Russia under a bilateral investment protection agreement. The Belgian government has already taken Euroclear’s profits from its Russian assets, so the issue of ownership shares will be decided. It remains to prove that we are talking about “excess profits,” as trade union activists claim, and not about the typical income for an investor who owns similar securities.

Europe is dependent on open markets, so it fully adheres to international law and a multilateral approach to resolving issues. So if the EU considers confiscation on such a large scale to the point of legality, its reputation will be tarnished. There is hardly any cause for concern in such a dominant economy as the American one. But if the EU jeopardizes the rule of law on ownership stakes, it will lose investor confidence.

Finally, a boomerang effect is also possible. For almost two decades, Germany and Italy have been arguing in the International Court of Justice over the limits of state immunity in the matter of compensation for victims of crimes committed by Nazi troops on Italian territory or against Italian citizens. Indeed, if state immunity is revised, Germany may be forced to return to the practice of confiscating property for atrocities committed during the Second World War.