Dispute between Moscow and Kyiv about Soviet Property Abroad Heating Up

Paul Goble

            Staunton, Dec. 3 – In the wake of the collapse of the USSR, all the former union republics that then became independent states agreed to a formula for the handling of Soviet debts and property abroad. They would allow Russia to claim all the property abroad if Moscow also paid all the Soviet debt.

            Ukraine was among them, but the Verkhovna Rada never ratified the accord. And as tensions between Russia and Ukraine have escalated now to the point of war, this dispute between Moscow and Kyiv is heating up with each side hardening its position and Kyiv expecting a more respectful hearing from other countries than it 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 to win its case in foreign courts because 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 (ridl.io/the-heavy-legacy-of-the-soviet-regime/).

            Just how sensitive this issue is for Russia was highlighted by the fact that Vladimir Putin in his February 21 speech recognizing the Donetsk and Luhansk people’s republics mentioned it, Uvarov says. 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 blamed Kyiv also 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; but Putin did not mention the fact that Russia had never provided Ukraine with information about those assets” as the earlier accord specified and Ukraine has demanded.

            After Russia invaded Ukraine, Uvarov continues, “Western countries imposed economic sanctions on Russia, including the freezing of Russian assets” and some went even further, raising Ukrainian hopes. In July, Kyiv signaled it plans to go to court to claim one third of Soviet property abroad that Russia had illegally seized earlier.

            And earlier this fall, some Verkhovna Rada deputies proposed creating an investigation commission about this issue as a prelude to launching a major government campaign to seek the return of what Kyiv believes should always have become Ukrainian property. Russia is certain to resist, countering that it and not Ukraine has paid the Soviet debt and should have the property.