3rd March 2022
Yesterday’s short post turned out to be rather popular, with a number of informed and insightful comments.
(Perhaps that is a hint that I should keep these blogposts succinct!)
The question puzzling me today is whether those clamouring for United Kingdom sanctions against oligarchs realise that it is not a good thing for the government to have summary powers to deprive individuals of possessions and other property.
When the government uses summary powers, say, to deport members of the Windrush generation, or to remove a person’s British citizenship, then liberal rightly are concerned.
Individuals have rights, and there are things no person or group may do to them, without violating their rights.
And if all individuals have rights, and oligarchs are individuals, then it follows that oligarchs have rights.
These rights may not be absolute – and property rights especially can be subject to interferences by the state.
But such interferences need to have a lawful and reasonable basis and follow due process.
And this is the same for oligarchs, as it is for anyone else.
That the government cannot just deprive people of possessions and property by mere ministerial diktat is not a bad thing in a liberal society.
And those who clap and cheer at the prospect of possessions and property being taken by the state without any lawful and reasonable basis, and without due process, should be careful what they wish for.
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Time to wheel this out, yet again. https://www.youtube.com/watch?v=PDBiLT3LASk
If you’re going to “wheel [thing] out” even once you might mention what it is. Not sure why this doesn’t rate as “irksome” and passes moderation: many of us never click youtube links without some manner of title or description.
It’s a pertinent clip from the film “A Man for all Seasons”.
But I agree with your basic point. It makes life a lot easier if this is referenced in the initial post.
Very good point. One I had not really considered properly – We want pressure to be brought to bear on those who support, prop up and benefit from Putin. But if our Government acts illegally on this not only are they acting incorrectly but also they can do it again I. Other circumstances. To be honest they seems to need little encouragement to act in a high handed and highly questionable manner so let’s not legitimise this sort of action. Do it but fo it right.
Let’s let the people who’ve stolen the loot use legal process to keep the stuff that they’ve stolen. That ties in rather nicely with London being the money laundering capital of the world.
And Kondon Generously donating a big portion of Palestine for a zionist political platform to wreak havok.
Another good question and one I’ve struggled with.
The interesting thing for me is trying to decide the root cause.
I’ve very little doubt that the riches of some of the oligarchs (if they are really oligarchs, but that’s another question) may have a shady background – but that was, presumably, in Russia.
In which case, is it for us to impose our standards if the Russians aren’t?
The other element is that the oligarchs get away with it because they are not shunned as being dodgy people – they are welcomed into society (and into political parties, come to that).
I wonder how you would come up with a fair system for dealing with riches that were unfairly gained?
Would the process be managed fairly and consistently, or would some oligarchs be more equal than others.
I think this is another question that will draw a lot of interesting comment.
(For the avoidance of doubt, few things would give me as much pleasure as much as some oligarchs / plutocrats suddenly finding themselves with the same financial cares as the rest of us.)
“I wonder how you would come up with a fair system for dealing with reaches that were unfairly gained?”
I do appreciate that this may not be universally applicable (jurisdiction and all that), but isn’t there POCA – the Proceeds of Crime Act?
But can / should POCA deal with ‘earnings’ from abroad – it’s tricky because what is illegal here may not be illegal in other countries. (And vice versa.)
If it is legal – it shouldn’t be legal? These are ill-gotten gains. Where oligarchs = kleptocrats. In these exceptional circumstances emergency laws/regulations with sunset clauses would seem to be an acceptable answer – with thresholds for renewal which escalate over time to ensure these are not abused.
In the 20 years since the POCA was passed there have apparently been just 9 successful Unexplained Wealth Orders
It would seem that unimaginable wealth insulates one from the law
KLEPTOMANIA by Tom Burgis. Also , The Creature from Jekyll Island by G. Edward Griffin
Whilst your points are well made it seems hard to understand why HMG should threaten sanctions in conjunction with its allies when it cannot fulfil its own due process. If they cannot provide the evidence for seizure why can’t they at least freeze the assets and let the lawyers argue about it in due course. If sanctions are to work in a time of war, what’s the point unless you can damage the intended target. Otherwise we just look like useless idiots.
You are of course right, with exceptions for (and only for) Chelsea and Birmingham City football clubs.
There are measures commonly sought from and granted by courts by which those claiming that their legal rights are being infringed or threatened with infringement can apply for injunctions (subject to appropriate cross undertakings).
Indeed it seems the objects of the clamour “to do something” readily avail themselves of this possibility to protect their reputations.
It is surely not beyond the matrix wit of a QC or two, if so instructed by the Government, to contrive a case to enjoin these objects of sanctions from dealing with or disposing of their property in the UK or transferring it out of the UK until the determination of the issues between the parties unless with the approval of the Court.
Indeed there is delicious irony in the knowledge that such a solution satifies the very liberal rule laid down in the Russian Constitution protecting parties from the absolute deprivation of their property
Here the current Home Secretary can be a help, as the answer to “what’s the worst that could happen?”
Just imagine what happens when in a flurry of something-must-be-done the oligarch database system hastily set up by Crapita identifies you as a former judo sparring partner of Putin, and you find yourself appealing to Priti Patel’s temperance and innate decency.
As ever, even the odious must have their right to a proper hearing for any of us to have confidence in our rights.
“And if all individuals have rights, and oligarchs are individuals, then it follows that oligarchs have rights.”
This form of deductive reasoning is not reflecting the underlying complexity of the issue. Oligarchs are individuals, but they are hardly sanctioned in that regard, as any other individual. They have a more or less quasi state-like character, due to their links to the Russian government.
Furthermore, there is a difference between an asset freeze ex parte, which hardly will put their living conditions in any serious jeopardy, and expropriation.
If the government had a working definition of “oligarch” which could be used to establish at least a probable relationship to the de facto power structure of a targeted government — irrespective of any formal and possibly fictive power structure that government supposedly has — and if furthermore legislation were in place that allowed such persons to be targeted, I wouldn’t see a problem. I’d be interested to know if anything even approaching the above actually exists.
Well, ain’t this the kicker. Painfully reminiscent of Churchill’s ‘collar the lot’.
Any kind of emergency powers are terrifying. From Roman Iustitium (why does nobody study Iustitium!!) to Bodin’s essay on sovereignty in the C16th, to Nissen’s essay on Iustitium, to Carl Schmitt in the 1920s and 30s, advocating Dictatorship, and the misuse by the German right of the infamous Article 48 of the Weimar constitution, to Giorgio Agamben in ‘State of Exception’. There is a whole tradition of political thought, about sovereignty and the state of exception and emergency powers which, somehow, incredibly, seems hardly to be known in the UK.
Sovereignty consists in the power to suspend law, not to make it. Sovereignty lies with whoever has the power to create the state of exception. It is lethal. If we understood it better we’d be more terrified.
The last thing we need is a Iustitium. You read about the times when the Senate declared Iustitium and what followed was wholesale slaughter. And yet .. come the day of emergency .. and we are in an emergency .. we need decisive action fast.
I guess the nearest we have in the UK to a major thinker who’s considered this stuff is Hobbes. Sometimes we need Leviathan. The last thing we need is Leviathan.
Apologies. Raw nerve touched.
Thanks for all those references! A comment well worth archiving.
cheers. Gregory Golden’s book ‘Crisis Management in the Roman Republic’ is the go-to for modern discussion of Iustitium.
The boundary must be crystal clear between arbitrary confiscation and the operation of properly constructed law. And, of course, there must be an appeals process, although assets should be frozen during such.
Should there be a distinction between freezing an asset temporarily to prevent it being taken from a jurisdiction and confiscating it permanently? Surely there should. We can be more accepting of the first as it allows proper process to take place and the rights of the individual are not unduly harmed.
This article from NBC News about how the US uses the Civil Asset Forfeiture Reform Act to seize oligarchs’ assets might be of interest.
https://www.nbcnews.com/politics/politics-news/us-wants-seize-russian-oligarchs-yachts-homes-jets-legal-rcna18278
It will be interesting to see if the seizure of Russian assets has a chilling effect on foreigners seeking to buy assets in the UK. The Chinese might start to think it may be their turn next. London has long been regarded as a safe haven for assets and investments. That might have changed now.
Slightly off topic but the way the financial system has been weaponised recently has also been very interesting. Russia, China and India all created their own interbank messaging systems after Iran was ejected from Swift 4 years ago. Now that the international banking and finance system has been shown to be a weapon that can be wielded by the West, eg. freezing central bank assets, we can presumably expect to see other countries seek to create their own financial systems, secure from such actions.
I think it was Rachel Maddox, in her book, Blowout, that suggested that in part the existence of the Oligarchs was to help Putin circumvent western sanctions. If Rosneft and Gazprom had remained in state hands the west would not have hesitated before sanctioning them.
But put them in private hands and now it looks as though the West is attacking free enterprise. In return for the facade, the oligarchs get to keep a significant amount of the revenue they generate – after Putin takes his slice, of course.
One thing I try and remember about both Putin and oligarchs in general… First, if there were any individuals capable of masterminding and funding a plot to oust Putin, it would be the Oligarchs. Second, if Putin wanted to get rid of *anyone*, they would be gone in an instant.
That he tolerates them should be as informative as a book on the subject…
For me, the issue is how legitimate the property is. And that begs the question of how governments (may have) colluded in legitimising such property, by turning a blind eye as to its source.
I’m not a lawyer, but my understanding is that criminals are not allowed to benefit from their crimes. What immediately comes to my mind is the Proceeds of Crime Act. And, given how many/most/all oligarchs have acquired their riches, it is reasonable to ask whether criminal activity was involved.
But then we come back to how governments have legitimised these riches. And how blind eyes have been turned – astute oligarchs having (very conveniently) provided funds to political parties.
So, yes, oligarchs have rights – but how many rights were trodden over to gain their riches? How legitimate are those riches?
Because I personally think these questions are need to be put to the ordinary people of Russia, who may have thoughts of their own.
Can non-physical propertly, like one’s British citizenship, which you mention, be removed by mere ministerial diktat?
Or are there legal things that must be done in order to effect that?
Thanks.
I very much enjoy your blog. It offers insight that I’d like to claim I share but I’m not sharp enough, to be honest.
But, for me, among the best things on every post is the use of the word ‘irksome’. It reminds me each time I see it of the value of the mot juste. It reminds me that language is important ….. and beautiful.
Government ministers depriving people of things by diktat is of course no different to mugging.
Is seems reasonable to prevent access to the sort of money that can make a difference to an active war effort if its owner is plausibly likely to support it. It might even be reasonable to freeze first and then attempt to seize in a court soon after: Judges exist for a very good reason.
In the absence of any post or pre action due process, there is no possible justification for giving ministers of state the power to dictate anything.
That’s the nub of the literally earth shattering mistake Russia has made.
On the specific point of your post, the sanctions against individuals rely on two things, as I see it.
One is that the affected individuals have power to effect change. This seems a little unlikely.
The second is that Putin himself is harmed by the sanctions. That would be true if some of the sanctioned individuals were holding property etc for him. But that also seems unlikely.
If he doesn’t feel the pain, and those who do, cannot do anything about the regime in Russia…..then what does it actually achieve?
It feels like a bait and switch, where a couple of houses are given up to great fanfare, so that huge assets can be squirrelled to the Caymans without any publicity.
It is an excellent point that our belief in rights is tested by whether we continue to believe in them when they benefit those we dislike.
However.
Part of what is going on here seems to be that the UK government is claiming that it will be introducing more sanctions against oligarchs, ramping them up over a period of time. This seems to imply that there are more oligarchs who can reasonably be subjected to those sanctions, i.e., that the government believes it will be able to establish the case that infringing their property rights is lawful.
And if so, it seems to be highly tactically misjudged to go about it slowly. Any wealthy Russians who fear they might be on the target list of potential sanctions in a few days or weeks gets that time to quickly move as many of their assets as possible beyond the reach of the UK government, therefore de-fanging the actions that the state has available to it.
Another relevant point seems to me to be that with property rights, the options available include freezing assets rather than outright confiscating them. Swiftly moving to freeze assets could prevent them from being moved out of reach, whilst ensuring that the person whose assets were frozen could be easily made whole again by unfreezing them, should it be subsequently established that the sanction against them was unfounded.
And finally, power is important. Maybe even against the richest of oligarchs the state remains powerful, so will always be ‘punching down’. But there is surely something qualitatively different between the power imbalance between the state and a billionaire compared to the power imbalance between the state and those other examples you mention (Windrush generation; Britons being stripped of citizenship). The resources a billionaire can bring to bear in ensuring every inch of their rights are observed are unimaginably greater than the resources others would be able to deploy if the state started trying to interfere with their rights.
What if, instead of seizing their assets, the government were to impound them temporarily in exchange for a receipt token – perhaps a unique NFT of Monkey Putin, with a notional value equivalent to their asset valuation. They could be left with the option of selling or trading those (& forfeiting the seized items) – but only to one another
Fascinated as always with the drift of comments. I would start with the observation that emergency legislation is nearly always bad legislation.
Standing back are we addressing the right issues?
Are we taxing expensive property properly? No.
Are we ensuring that such target residents are being properly taxed on all their earnings? No.
Are we ensuring that private education is being completely paid for (VAT, charitable status)? No.
Are we ensuring that elites are being excluded from political decision making? No.
Are we ensuring that proper due diligence is carried out prior to acquisition of assets in the UK? No.
There are many issues that need addressing that are universally applicable without trying to define who is an “oligarch”.
I am reminded of Blair whose main justification for invading Iraq was that Saddam was a “bad man”.
I agree with you Alan and can’t help suspecting the motives of this particular government. Is it implausible to suggest that having blown a load of cash, they’ve seized Putin’s gift of political cover to steal some of it back from Russians and make political hay in the process without scaring off ‘nice’ billionaire donors because of it? Acting opportunistically with scant regard to ethics, law or common sense has become a bit of a Tory trademark after all. As your list makes clear, they don’t do the useful things they could and should either.
It is important to acknowledge that men like Roman Abromavic are in fact nice people who broke no laws in acquiring their wealth. In fact, Jonathan Sumption successfully argued in court that no laws could have been broken in Russia where fortunes were made stripping public assets, as there weren’t any laws to speak of at the time it happened.
Words are important and the main reason I wrote this is to point out that Tony Blair’s main justification for invading Iraq wasn’t that Saddam Hussein was a ‘bad man’: It was that he was a positively evil proven genocidal maniac with form for the most serious sort of breaches of the Geneva convention. In addition to rape and torture as overt policy, the man actually televised himself forcing one half of his parliament murder the other! He was in fact obstructing weapons inspectors who ‘could not be certain’ he had nothing to hide even if they doubted it. SH was responsible for the violent demise of more Iraqi’s than the most powerful invading army the world has ever seen. Prosperity is poor justification for war, but have a look at this chart and see if you can identify the point at which SH rose to power and when he was deposed from the shape of it alone? https://en.wikipedia.org/wiki/Economy_of_Iraq#/media/File:Historical_economic_growth_of_Iraq.jpg
In no way, even with the benefit of hindsight, is it a slam dunk winning the argument that Iraq and the world are worse off in the long run for Bush and Blair’s collusion in making a stronger case for invasion than the available ‘intelligence’ actually supported stand alone.
Maybe Blair and Bush are ‘bad’ men, maybe not; but just like those nice Russian oligarchs, and unlike many of our current government’s actions, what they did was at least legal and remains possible to justify on reasonable grounds without squinting too much.
I agree it’s a bad precedent, constitutionally and commercially, especially if any oligarchs targeted here were UK citizens and the forfeitures are permanent and not just pro temp frozen assets.
George II signed away in perpetuity the Crown’s right of escheat without due compensation (“compulsory purchase”), and security of property tenure during good behaviour has been a major factor in Britain’s past and present prosperity.
How long before the government will start seizing property of UK subjects for relatively trivial crimes, or simply deemed too large for the number of occupants, to house the illegal immigrant hordes that the Government seems unable or unwilling to stem?
“illegal immigrant hordes”?
How did this comment get past the moderation process?
I missed that – deleted.
Perhaps evidence and procedure here are getting mixed up with primary law?
That the State should be able to expropriate the assets of X could be done under SI or ,dare it be mentioned, martial law.
If disputed in Parliament there would be the possibility of a GE or with an 80 seat majority given it by the people the Government could waive through an enabling Act which would legalise everything perfectly.
Arguing whether X owns a particular asset or not raises evidential matters which could be decided in Court based on the wording in the enabling Act and/or SI
In conversation with Stephen Colbert, Fiona Hill points out that the people with the power to depose Putin are not the yacht-owning billionaires but his inner circle of ministers and generals, whom sanctions leave unaffected.
https://www.youtube.com/watch?v=i-xuQLPEeZk
at 6:00
Are you (DAG) aware of the recent court decision putting Sova Capital investment bank into the Investment Bank Special Administration regime, i.e. third party control? Judgment of Leech J. awaited and some commentary on LinkedIn. Could be some interesting analysis of current State legal powers in there.
No – and a quick look indicates the judgment is not (yet) publicly available – but I did find https://www.fca.org.uk/news/news-stories/sova-capital-limited-enters-special-administration
Special Administration does not constitute a state seizing of assets. It replaces the directors with Court Appointed Administrators and it is “special” as distinct from ordinary administration in that there are provisions to look after client money and assets.
A more interesting FCA power is its ability to prevent authorised firms from making payments from their own assets including to shareholders, directors and third parties. This could be a useful means of making sure that assets cannot be disposed of pending a resolution of issues affecting proper use of sanctions.
One could perhaps have a registrar of foreign owned assets empowered to order that their ownership should not be altered within a time period without the registrar’s consent – thus giving time for an order for expropriation to be properly considered.
The FCA and/or PRA might be able to do this already for Russian owned companies authorised by them to operate in the UK. A temporary (and challengeable) freezing of assets is not open to the objections that apply to an arbitrary seizure of assets and would give time for the High Court to consider any case over seizure.
Thank you, that is most helpful. I think the case is noteworthy as a swift and significant example of the collateral financial damage of sanctions (legitimate or otherwise). This was a highly regulated entity whose directors, shareholders, creditors and customers are presumably not oligarchs and have, presumably, done nothing wrong. Creditors of this entity may not be paid in full, promptly or at all, causing a domino/ripple effect. Those directors and shareholders have effectively lost their company that was, presumably, fine only a week ago. This aspect was at least a process subject to judicial supervision, but the extended consequences will probably be far-reaching and unseen. And this could happen to any legitimate business with perfectly legitimate and lawful contractual relations with entitles that just happen to have Russian links that get swept up in the economic sanctions. That is nothing to do with whether the underlying sanctions or seizures are right or wrong per se.
Plainly letting HMG loose with property seizure orders looks a very bad thing.
I am not a lawyer but my limited experience of land suggests one can buy and sell land in 1 square inch portions ten times a minute. Nothing to do with the Land Registry and the contract can be verbal or on the back of an envelope.
Then anyone with any sense would have put the money/ownership offshore or in bitcoin long before HMG gets off its bottom. And I don’t think HMG really wants to do this anyway.
I may be wrong but look forward to HMG trying, I have the popcorn ready.
In normal times I would agree with these sentiments but these clearly are not normal times. Whether we like it or not the UK has surruptitiously been in a war using such hidden tactics as cyber and financial corruption of at least morals if not vested interests with many of those currently in power and there lies the problem.
To define these as non normal times this government will more or less have to admit to it being financially corrupted by Russian money over time and with a cyber war which was persuasive in making the UK leave the EU which means more or less admitting that Brexit is one big mistake.
I therefore see little chance of any serious action by the UK government in confiscating or impounding the possessions of the those numerous oligarchs as was mentioned in parliement recently.
And of course, this makes a mockery of the aims of Brexit which was to regain in absolute, UK sovereignty.
Quite agree, the state should not be allowed to act arbitrarily to confiscate private property – unless acting within the law. [For instance] in the case of Abramovitch, one only needs to ask how he could afford to ‘spend’ and potentially write off £1,500,000,000 in a ‘business’ deal for Chelsea FC. I know League football tends to defy the laws of gravity, but it should not be too difficult to raise the question as an Unexplained Wealth Order – don’t know if this allows for a temporary freezing of assets until matters are clarified.
The dangers are already there in our society: My local council CPO’d my family home of 24-years. They did this in the face of 20-years of Parliamentary intent (to support and not penalise Carers), because I was forced to leave my home empty to live with my parents to provide them with care and support. In 2004, Lord Rooker even when as far as saying that in this specific example, it “did not warrant state intervention”, but my local bureaucrats disagreed.
Perhaps its easier to get these sorts of matters sorted out if you’ve got expensive lawyers…?
Seize?
Probably not.
Freeze?
Why not?
I seem to remember that, in time of war, the property of enemy aliens may be forfeit. It is hard to deny that Russia already is engaged in war against the World Order. Morally and logically, Russian property should be forfeit. If the Law does not so provide, the Law should be corrected forthwith.
Arguably, property rights are not inalienable, they exist by national Law and hence by consent of the sovereign.
OR I would rather edit the last sentence of yours to end like this
And those who clap and cheer at the prospect of possessions and property being taken by the state without any lawful and reasonable basis, and without due process, are being evil in their response, and should be careful God doesn’t decide to make them suffer the same.
Following on from yesterday’s reflections on consequentialism, it’s worth reminding ourselves of the difference between Rule Consequentialism and Act Consequentialism. Briefly, the former recommends actions which tend to result in the best consequences, even when they don’t, while the latter recommends diverging from actions which normally generate the best results on those occasions when they don’t.
To test your intuitions, and determine which camp you fall into, I suggest the following question: if it could be guaranteed that the unlawful seizure of an Oligarch’s property (which, let’s stipulate, is an ill-gotten gain of Putin-friendly activity) wouldn’t in any way increase the probability or frequency of future expropriations of property, would you be for or against?
If you’re against, then you actually think that it would be a bad thing for an individual oligarch to have his property confiscated unlawfully per se. If you’re for, then that suggests that you are queasy about the precedent set, rather than the action itself.
I am very happy with the concept that honestly acquired property should be sacrosanct.
However dishonestly acquired property is in no way sacrosanct.
Oligarchs, by definition became wealthy by various means of dishonesty, thus their ‘property’ never belonged to them in the first place.
Confiscate.
And by mere assertion, rather than with proof and a process?
Using the law to do illiberal things in a ‘good’ cause is almost always to be avoided.
But don’t let’s close the door to helping us deal with things we can’t yet imagine (like an invasion of Ukraine might have appeared some time ago…)
So under what conditions could we tolerate it ?
Don’t let the current roguish occupancy of the government machine fool us.
Let’s just remember a more ‘liberal’ (or at least ‘reasonable’) time, when ministers used anti-terror legislation to declare Iceland ‘terrorist’ in order to protect financial assets during a crisis.
If anyone thinks that was necessary, let alone acceptable, then how did a more reasonable system deal with the same problem ? Norway convened its Parliament in a night-time session and passed specific legislation. Publicly, and subject to the checks on abuse of power in their system.
In Britain, however, there are simply not enough adequate checks on ministerial power. At least in the tyrannical interpretation of ‘parliamentary supremacy’ we have to live under. So ministers can more or less do what they want – misuse terror legislation, deprive their citizens of fundamental rights, restrict voting, restrict freedoms to protest. With no comeback.
Feel good for five minutes, regret for years.
But if we did have a system with checks on such power, the proper oversight and the possibility to remedy the effects of abuse, then it becomes safer for liberals to accept certain exceptional measures.
If you think the current state of our system in Britain allows this, dream on….