G7 Leaders Acting Like Mobsters in Seizing Russian Assets as Collateral for Ukraine Loans

US President Joe Biden and the other leaders of the G7 are acting like a bunch of New York Mobsters, as opposed to being leaders of democratic governments and the upholding of international laws, in my opinion, and based on their combined actions of illegalizing the frozen Russian Assets as collateral for very questionable and substantial loans to Ukraine to further its war against Russia.

The G7 attempts to seize Russian assets as collateral for billions of dollars in loans for Ukraine pulled back the curtain to expose the most extraordinary attempt to seize power in modern history but with the pen rather than armies. 

Declassified documents, from the Clinton Administration, revealed a plot that has altered our thinking about the relations between the United States and Russia. The thirst for power comes seething through every line of these papers that alter our perception of reality, change the course of history, and now threaten us with World War III.

International law on the arbitrary seizure and liquidation of assets, particularly when one country seizes the assets of another country without due process, is complex and involves several principles and conventions.

Arbitrary asset seizure without due process or court decisions violates international law and can lead to diplomatic disputes, economic sanctions, and legal challenges in international courts or arbitration tribunals.

The complexities and far-reaching consequences of asset seizures in international relations shall involve prolonged legal battles, international arbitration, and diplomatic negotiations, resulting in financial compensation or the return of assets.

Further, using illegally seized assets as collateral for a significant loan would be highly problematic and risky for several reasons listed below.

In summary, using illegally seized assets as collateral for a large loan is fraught with legal, reputational, financial, and ethical risks. It is crucial for lenders to thoroughly vet and ensure the legitimacy and legal status of any assets used in such transactions to avoid severe consequences or possibly World War 3 atomic consequences.

Legal Challenges:

Ownership Disputes: If the assets are contested, the original owner can file legal claims to recover them. This could result in lengthy and costly legal battles, potentially voiding the collateral agreement.

Court Rulings: International courts or arbitration bodies may rule in favour of the original owner, leading to the seizure or return of the assets, making them unavailable as collateral.

Reputational Risk:

Credibility: Lenders or financial institutions accepting such collateral risk damaging their reputation and credibility. Engaging in transactions involving disputed assets can be seen as unethical or illegal.

Market Perception: Investors and stakeholders may view the institution as unreliable or engaging in risky behaviour, potentially leading to a loss of confidence and financial instability.

Sanctions and Penalties:

International Sanctions: Entities involved in the transaction could face sanctions from governments or international bodies, restricting their ability to operate globally.

Penalties: Financial institutions might face hefty fines and penalties for dealing with assets considered illegally seized or subject to international sanctions.

Financial Risk:

Asset Volatility: Disputed assets may be difficult to value accurately due to their contested status, leading to volatility and potential financial loss.

Liquidity Issues: If the collateral is seized or frozen due to legal disputes, it becomes illiquid, leaving the lender without recourse to recover the loan amount.

Ethical and Compliance Issues:

Due Diligence: Financial institutions must perform rigorous due diligence to ensure the legitimacy of the assets they accept as collateral. Failure to do so could result in compliance violations and regulatory scrutiny.

Ethical Standards: Using contested assets may violate ethical standards and corporate governance principles, leading to internal and external repercussions.

Here are a few significant examples:

Iran Hostage Crisis and U.S. Assets (1979-1981):

Background: In 1979, after the Iranian Revolution, Iranian militants seized the U.S. Embassy in Tehran, taking 52 American hostages. In response, the U.S. froze Iranian assets.

Legal Actions and Consequences: The Algiers Accords were signed in 1981 to resolve the crisis, leading to the establishment of the Iran-U.S. Claims Tribunal at The Hague to handle claims by U.S. nationals against Iran. The Tribunal has since resolved thousands of claims, often resulting in financial compensation.

Iraq and Kuwaiti Assets (1990-1991):

Background: During the Gulf War, Iraq invaded Kuwait and seized its assets, including gold reserves and other valuable properties.

Legal Actions and Consequences: Following Iraq's defeat, the United Nations Compensation Commission (UNCC) was established to process claims and compensate victims of Iraq's invasion of Kuwait. Iraq has been required to pay billions of dollars in reparations to Kuwait and other affected parties.

Libyan Assets (2011):

Background: During the Libyan Civil War, several countries froze the assets of the Libyan government and entities linked to Muammar Gaddafi.

Legal Actions and Consequences: The UN Security Council passed resolutions authorizing the asset freezes. After Gaddafi's fall, the assets were intended to be returned to support the rebuilding of Libya, although the process has been complex and ongoing.

Russian Assets in Ukraine (2014-present):

Background: Following Russia's annexation of Crimea and its involvement in the conflict in Eastern Ukraine, many Western countries imposed sanctions and froze Russian assets.

Legal Actions and Consequences: Various legal cases have been brought before international courts. For instance, Ukraine has pursued claims against Russia at the Permanent Court of Arbitration and the European Court of Human Rights (ECHR). These cases are still ongoing, with significant political and economic implications.

Venezuela and U.S. Sanctions (2019-present):

Background: The U.S. imposed sanctions on Venezuela and froze the Venezuelan government's assets, including those of the state oil company PDVSA.

Legal Actions and Consequences: The Venezuelan government has contested these actions in international courts, including the International Court of Justice (ICJ). The ongoing legal battles have significant impacts on Venezuela's economy and international relations.

Articles:

https://nsarchive.gwu.edu/briefing-book/russia-programs/2020-11-02/putin-clinton-transitions

https://www.aljazeera.com/news/2024/6/14/putin-calls-g7s-deal-on-frozen-russian-assets-for-ukraine-loan-theft