One of the most pressing questions surrounding the West’s financial support for Ukraine is whether the $300 billion in Russian state assets frozen by Western governments can be seized or otherwise put to use. 

To answer that question, we first need to distinguish between Russia’s money and the piles of cash created by sanctions that do not, in fact, belong to Russia. 

There is only one legal way to take Russia’s money, and that is through a “transfer” intended to pay down the reparations that Russia owes to Ukraine. This would work much as it does when a tax authority takes money from someone’s bank account to settle a tax debt. It does not involve theft of money. The person’s debt and bank balance simply fall by the same amount. 

Likewise, if the European Union or the G7 transferred Russian assets to Ukraine, the amount that banks owe Russia would fall by the amount transferred. International law does not usually allow countries to do this, but many legal experts argue there is an exception when a state commits a grave violation, such as an act of aggression, and consequently owes reparations — a position supported by the Council of Europe.

Although transferring money to Ukraine under the present circumstances would be legal, Western politicians are reluctant to do so. They fear that other governments thinking about breaking international law — think China eyeing Taiwan — might stop purchasing bonds issued by countries who enforce international law this way. 

To avoid those risks, the EU has been considering ways to finance Ukraine with the pools of cash generated by sanctions rather than seizing and transferring Russia’s underlying assets themselves. 

These pools of cash are often described as “frozen Russian assets,” but they are not actually Russian money.

When depositors put money in a bank, they generally surrender ownership of the money itself. What they receive in return is a claim to withdraw an amount of money equal to what they deposited, sometimes with interest. 

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The largest custodian of the frozen Russian assets is Euroclear, the Belgium-based........

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