In the aftermath of the collapse of the USSR, all the former union republics subsequently became independent states. They also agreed on a formula for the disposition of Soviet debts and overseas property. They would permit Russia to claim all overseas property if Moscow also paid off all Soviet debt.
Although Ukraine was among those union republics, the Verkhovna Rada of Ukraine never ratified the accord. And, as tensions between Russia and Ukraine have escalated now to war, this dispute between Moscow and Kyiv is heating up. Each side is hardening its position, and Kyiv is expecting a more respectful response from other countries than it has received in the past.
Aleksey Uvarov, a Russian scholar at the University of Bonn, reviews this complicated history for Russian Riddle before suggesting that Ukraine may now have a better chance of winning its case in foreign courts. Some Western governments are prepared to support the confiscation of Russian assets abroad to compensate Ukraine for the destruction Russian forces have inflicted on Ukraine.
The fact that Vladimir Putin mentioned it in his February 21 speech recognizing the so-called Donetsk and Luhansk People’s Republics DNR/LNR highlights just how sensitive this issue is for Russia, according to Uvarov.
He noted that “Russia had paid off all Soviet foreign debt in 2017, while Ukraine had not ratified” the earlier accords and “simply refused to implement them.”
The Kremlin leader also blamed Kyiv for “making claims about the diamond fund, the gold reserve, as well as other property and assets of the former Soviet Union abroad,” the Russian researcher notes.
Although, Putin did not mention that Russia “had never provided Ukraine with information about those assets,” as the earlier accord specified and as demanded by Ukraine.
After Russia invaded Ukraine, Uvarov continues, “Western countries imposed economic sanctions on Russia, including the freezing of Russian assets.”
Additionally, some went even further, raising Ukrainian hopes. In July, Kyiv signaled its intention to go to court to claim one-third of Soviet property abroad. Russia had illegally seized this overseas property earlier.
And earlier this fall, some Verkhovna Rada deputies proposed establishing an investigation commission into this issue. This serves as a prelude to launching a major government campaign. It is to reclaim what Kyiv believes should have always been Ukrainian property. Russia will undoubtedly resist, countering that it, not Ukraine, has paid the Soviet debt. Therefore, it should have the property.
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