EU leaders are meeting Thursday in Brussels to try to unlock €140 billion in frozen Russian assets that Ukraine could use for its own defence and reconstruction.
The meeting comes as Ukraine faces pressure from the Trump administration to cede territory to Russia in a peace deal. European states, which oppose such a concession, view a massive transfer of funds to Ukraine as one way to bolster its bargaining position.
But with the EU facing an uphill battle to unfreeze Russian assets, some experts are urging Canada to take the lead.
“The Russians are hiding behind law, and policymakers are hiding behind legal complications,” said Harold Koh, a professor of international law at Yale University and former legal adviser to the U.S. State Department. “Neither is a legitimate bar.”
“Canada’s strength lies in its tradition as a values-driven power committed to international law — this is where Canada punches above its weight.”
Frozen billions
Following Russia’s 2022 Ukraine invasion, Canada, the U.S., Japan and various EU countries imposed sanctions on Russia that resulted in more than US$300 billion of Russian foreign reserves being frozen in banks around the world. Experts believe Canadian banks hold about $22 billion of this total.
But making these funds available for Ukraine’s use has been politically fraught. States worry about violating state immunity, provoking Russia’s retaliation or destabilizing markets.
State immunity — an international legal principle that normally protects states from having their assets seized — is often cited as a legal barrier. But experts say this is a flimsy argument.
“Russia normally is entitled to state immunity over those assets,” said Robert Currie, a professor of international and transnational criminal law at Dalhousie University.
“But Russia is breaching an international law norm … Other states are entitled to roll off the immunity [attached to those assets] temporarily while Russia continues its illegal invasion of Ukraine.”
The Kremlin has threatened legal action if the frozen funds are redirected to Ukraine.
Belgium, which holds most of Russia’s frozen assets through its Euroclear depository, has so far refused to release the funds without assurances that other EU members would share any potential losses from Moscow’s legal challenges.
The risk of market destabilization is also a concern.
“We don’t know what the reactions will be [to the frozen assets being confiscated] … [and] we can forecast some destabilization of the business interests,” said Currie.
But he does not view any of these arguments as compelling.
“I don’t think any of that holds a candle to the need to stop Russia by arming Ukraine and bringing this atrocity to an end,” he said.
Europe’s fragile sanctions
Since mid-2024, Europe has used a limited workaround to redirect some Russian money to Ukraine. Its Extraordinary Revenue Acceleration scheme has enabled it to send €50 billion in interest accrued on lapsed Russian bonds to Ukraine.
But the scheme depends on the EU renewing sanctions against Russia every six months.
Anton Moiseienko, a senior law lecturer at Australian National University who grew up in Ukraine, says the scheme is vulnerable.
If a single EU member state were to veto the sanctions — as Hungary’s pro-Russian leader Victor Orban could do — it could unravel the scheme.
“The freezing of the central bank reserves has been the biggest success story,” said Moiseienko.
“If suddenly it becomes clear that Russia just managed to outlast it because of the way that EU decision-making is structured … it’ll be utter madness.”
Canada’s opportunity
As a non-EU member, Canada does not face the same constraints of collective decision-making. Experts say Canada could set an important international precedent by taking the lead in sending its frozen Russian assets to Ukraine.
“Canada … is a single state … and one that’s shown leadership in supporting Ukraine,” said Moiseienko, of the Australian National University.
“It would be a more natural country to take that bold action than a coalition of 27 member states with their different fears and priorities.”
And Canada already has the tools to do so.
Since 1992, Canada’s Special Economic Measures Act has allowed the federal government to freeze assets belonging to foreign states and connected individuals.
Following Russia’s 2022 invasion of Ukraine, Parliament amended this act to permit Ottawa to seek a court order authorizing the forfeiture and repurposing of frozen assets. The move made Canada the first G7 country to explicitly allow forfeiture of sanctioned assets.
However, Ottawa has so far never sought such a court order. Experts say this is largely due to the legal and practical complexities involved.
Applying for a court order would require navigating untested legal territory; any misstep could trigger legal challenges, trade retaliation or diplomatic fallout.
“Most domestic lawyers are uncomfortable operating in this world where international law is kind of interpolating directly into Canadian law,” said Currie, of Dalhousie University.
Identifying which bank accounts belong to the Russian state — as opposed to individuals — is also difficult, and the process would likely be lengthy, with court proceedings potentially dragging on for years.
At a Senate foreign affairs committee hearing on Oct. 22, Alexandre Lévêque, assistant deputy minister for Europe, the Middle East and the Arctic at Global Affairs Canada, acknowledged the government does not have firm figures on how much Russian sovereign money is actually held in Canada.
He said the amount is “very low” — likely “in the tens of millions” — but added, “I don’t have the exact numbers.”
‘Move slowly’
Some experts and politicians are pushing for Ottawa to gain the ability to seize Russian state assets by executive order alone.
In May, Senator Donna Dasko introduced Bill S-214, a law that would amend the Special Economic Measures Act to allow for this.
“[Bill] S-214, would remove the uncertainty on the particularities of Canadian law,” said Currie. “[It would give] clear parliamentary authorization to do this, and Parliament’s feeling would be we are not breaching international law.”
The bill is awaiting second reading in the Senate.
“I hope we can get the bill to committee by early spring, but Senate public bills move slowly,” Dasko told Canadian Affairs in an email.
Michael Cholod, executive director of The Peace Coalition, a non-profit coordinating international efforts to rebuild Ukraine, told Canadian Affairs during a recent meeting in Kyiv that he supports the change Bill S-214 aims to bring about.
But he favours the proposed amendments being fast-tracked into law. Parliament could do so, he says, by embedding them into the Budget Implementation Act, which will accompany the Nov. 4 federal budget.
‘Political will’
Experts say Canada’s willingness to act will ultimately be a political, rather than legal, question.
“Legal barriers are a mirage — the real obstacle is political will,” said Koh, of Yale University.
But some worry Canada lacks the political will to move ahead.
Aaron Gasch Burnett, a German-Canadian security analyst at the European Resilience Initiative Center in Berlin, told Canadian Affairs that Canada’s failure to make moves on Russian assets so far stems from the Trudeau government’s lack of urgency and understanding of the issues.
At last year’s Halifax Security Forum, chessmaster and noted Russia critic Garry Kasparov publicly pressed then foreign minister Mélanie Joly on Canada’s inaction on using frozen Russian assets to support Ukraine. Observers said the exchange showed Joly did not fully grasp the Ukraine file or its stakes.
“We are dealing with a government that hasn’t done its due diligence,” Burnett said, expressing hope the new cabinet will act faster.
Cholod says using an executive order to seize Russian assets would be an appropriately targeted measure.
“If you’re just a regular slob, I’m not taking your money. This law isn’t for that,” he said. “If you are a genocidal maniac who’s already been convicted of breaking all of the UN Charter of Human Rights — yeah, you deserve to have your stuff taken.”
Canada has already committed nearly $22 billion in multi-faceted assistance to Ukraine since 2022.
“Now, the Canadian taxpayer doesn’t pay the next $22 billion worth of aid to Ukraine,” said Cholod.
“It comes out of Russia’s bank.”
It is past time for Canada to take action on this. Leadership is needed.