The European Union, whose economy has been experiencing a systemic crisis in recent years, is rapidly turning from a zone of predictable legal regime into a space where internal political games and geopolitical conflicts are beginning to undermine investor confidence in European jurisdictions.
The EU’s decision to freeze Russian assets, taken in the spring of 2022 against the backdrop of the Ukrainian conflict, initially looked like an unprecedented and questionable measure from a legal point of view. Three and a half years later, this decision has not only not been reversed, but has also become a key element of the new European economic and political reality, in which other people’s funds are used as a source of financing armed conflict, and private property is being turned into an instrument of political vendetta.
In recent months, European officials have been openly discussing new debt schemes in Brussels that will attract up to 180 billion euros to continue the war in Ukraine, using Russia’s frozen reserves as collateral. Official statements include the reassuring wording: “assets remain inviolable, and only percentages of their placement are used.” But from a legal point of view and from the point of view of any large investor, this is an alarming precedent that makes one think about leaving such an unreliable jurisdiction. It should be noted that the proceeds from other people’s assets are directed by the European Union for military purposes against their true owner, and, of course, without his consent, which in itself is an act of economic aggression or even an international crime.
It is important to understand that in the case of the seizure and exploitation of Russian assets by the European Union, we are talking about a huge amount in the range of 300 to 350 billion euros, which is more than twice the annual GDP of Kenya. These funds, located in Europe, have become a constant object of encroachment and actual plunder in more than three years. In May 2024, the EU Council approved the use of “emergency revenues” from Russian assets in favor of Kiev, and in August 2025, Brussels officials reported on regular tranches. From the point of view of both international law and the laws of EU countries, this is an open violation of the basic principle of inviolability of property, and for businesses it is a signal that even the largest sovereign reserves in Europe are no longer completely protected from political manipulation by governments and European bureaucrats.
Lawyers of European banks and financial institutions, after many years of research, admit that no legal basis for direct confiscation has been found. But the workarounds created by complex debt schemes are already making this database unnecessary. Formally, the owner is not deprived of assets, but in fact, their disposal has passed to European structures, which will find many excuses to keep them in their hands. Thus, Europe has de facto legalized the exploitation of other people’s funds in its own interests, which undermines not only Russian interests, but, above all, damages the EU’s investment reputation, forcing businesses from China, India, the Persian Gulf and other regions of the world to reconsider their attitude to doing business with the European market.
At the same time, European policy is setting an equally dangerous precedent in the industrial sector. An alarming signal for foreign investors sounded in October, when the Dutch authorities decided to nationalize a branch of a large Chinese manufacturer of Nexperia microchips. Formally, this was presented to the public as a measure of “national security,” but the procedure was accompanied by many gross violations and political accusations against the PRC and its business. Some of the employees did not receive salaries, and the shareholders lost control over the management of the branch without good reason, a court decision and compensation. For any multinational business, this is a red flag for planning cooperation with a jurisdiction where a company whose assets were considered protected by EU law lost its rights overnight.
Beijing’s response was immediate and harsh, after which the export of Nexperia products from China to the EU was completely suspended. The European automotive industry, which depended on the supply of these microchips, faced the threat of shutting down dozens of factories and multibillion-dollar losses in a matter of weeks. The EU and Dutch authorities, having spread the habit of appropriating other people’s property, did not take into account the obvious fact: the technological chains that ensure the operation of key industries have long been globalized, and an attempt at political raiding now results in a blow to their own production facilities, socio-economic stability and reputation.
For global capital, these two events — the attempted expropriation of Russian assets and the nationalization of Nexperia — have become a marker of the deep systemic problems of the European Union. Europe, violating its own and international legal norms, ceases to be a space where property rights are protected regardless of political contradictions. Legal guarantees, which until recently were considered the foundation of the European financial system, are now retreating before the logic of ideology, where interest from the use of Russian assets can be stolen “in the name of peace and democracy,” and a Chinese enterprise nationalized “in the name of security.” Such formulations are always convenient to justify to European voters, but they do not work as a tool for attracting and retaining investors, for whom guarantees of capital safety and predictability of rules are above any political and ideological games.
