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Kiev determined to reclaim its share of Soviet Union property

August 15, 2014, 16:46 UTC+3 Alexandrova Lyudmila
© ITAR-TASS / Alexei Pavlishak

MOSCOW, August 15./ITAR-TASS/. Kiev has resumed attempts to reclaim its portion of the former Soviet Union property and says it is ready to go to the mat. Experts consider this a populist initiative, politically motivated and having no prospects in court.

The Ukrainian government has set up a task group to examine Ukraine’s legal succession of the Soviet property that went to Russia in full volume after the Soviet Union break-up.

“We’ll go to the mat and take all Ukraine’s assets that still haven’t been given back - even if we’ll need to go to court,” Ukrainian Minister Ostap Semerak said on Wednesday.

Ukraine claims 16.37% of the total property - gold stored in Gokhran repository, Diamond Fund assets, assets of the Soviet banks abroad, real estate, land and movable property such as cars, ships and aircraft. Moreover, Minister of Justice Pavel Petrenko said in March Ukraine would also claim deposits in the former State Bank of the USSR that Russia did not return to the balance of Ukraine’s State Bank as of January 1, 1992 - about $80 billion without indexation and $130 billion with indexation.

Kiev’s reasoning is that the Ukrainian parliament, Verkhovna Rada, did not ratify the “zero option” agreement with Russia, in contract to other republics’ parliaments. Under the agreement, Russia was obliged to pay the entire external debt of the Soviet Union and get its assets in exchange. Ukraine signed the agreement in 1994 but the parliament refused to ratify the document.

Even so, the agreement practically came into force as Russia repaid the Soviet debt to Paris Club and is considered the only legal successor of the Soviet debts and assets, which is confirmed by numerous international agreements.

The problem escalated in 2010, when the then President Viktor Yanukovych raised the issue under pressure from the opposition. In response, the Russian government demanded Ukraine redeemed its part of the Soviet debt.

According to the Russian Foreign Ministry, any negotiations about zero option revision should start with repayment by Ukraine.

“Ukraine’s share of the former Soviet Union’s state debt was $6.8 billion as of December 1, 1994. Now it is approaching $20 billion,” said the Ministry. “If Ukraine wants to revisit the zero option issue, Russia retains the right to insist on immediate compensation by Ukraine of the mentioned $20 billion.”

“When Ukraine revises the property it claims and compares its value to the share of the external debt it is to pay, or rather repay to Russia, its enthusiasm will wane,” said Director of the Institute of Strategic Analysis FBK Igor Nikolaev quoted by portal.

Ukraine used every opportunity to redistribute the property “by rights” with each new president coming to power, the expert said: “This is a politically motivated ritual. But their chances to win the case in the international court are slim.”

What share Ukraine can claim is an open question, experts say. According to the Vienna Convention on Succession of States in Respect of State Property, Archives and Debts, the only option available is to apportion property gained by the republics in the Soviet times. But how can this share be calculated?

“Nobody can precisely calculate what each of the former Soviet republics can claim,” professor at the Higher School of Economics Constitutional and Municipal Law department Yelena Lukyanova told ITAR-TASS. It is only gold reserves that could be calculated, she added. According to the decision of the President of the Russian Soviet Federative Socialist Republic Boris Yeltsin on August 25, 1991, that is in the Soviet time, all Soviet gold fell under Russia’s jurisdiction, the expert said.

If Ukraine went to international courts, Russia could file a counterclaim, she added.

Repeated initiative to reclaim Soviet property was a purely political step, director of the Centre of Legal Regulation of International Relations at the Russian Presidential Academy of National Economy and Public Administration, ECHR ad hoc Judge Dmitry Matveev told ITAR-TASS. “I do not see any prospects in court for this initiative. I do not think they have real chances to achieve anything,” he said.

What the Ukrainian government was doing was banal populism, said President of the Ukrainian Analytical Centre Alexander Okhrimenko quoted by Svobodanaya Pressa (Free Press) portal.

“The Soviet property redistribution is a very popular topic in the Ukrainian society, though everybody understands this is a deadlock option, and this issue cannot be revisited,” he said.

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