1. Introduction
In reaction to the full-scale invasion of Ukraine in February 2022, the European Union (EU) and several States have imposed wide-ranging unilateral sanctions on the Russian Federation. In the financial sector, this included the freezing of assets of numerous individuals and entities with connections to the Kremlin, as well as the ‘immobilization’Footnote 1 of assets of the Central Bank of Russia (CBR). While not entirely unprecedented, the measures against the CBR are extraordinary in scale, implemented in over 30 States,Footnote 2 and concern an estimated total of around €300 billion.Footnote 3 These sanctions against the CBR have notably been brought through legislative and/or executive action, with no involvement of adjudicative bodies thus far.Footnote 4
Debates have since taken place in a number of sanctioning States on whether actions should go further than the mere freezing (or ‘immobilization’) of those assets. The political commitment to explore all options is reflected in a Statement on Ukraine from May 2023 by the G7 Leaders, pledging to:
continue to take measures available within our domestic frameworks to find, restrain, freeze, seize, and, where appropriate, confiscate or forfeit the assets of those individuals and entities that have been sanctioned in connection with Russia's aggression. … We reaffirm that, consistent with our respective legal systems, Russia's sovereign assets in our jurisdictions will remain immobilized until Russia pays for the damage it has caused to Ukraine.Footnote 5
Some States have pushed for the outright confiscation of Russian sovereign assets. Following lengthy debate, in April 2024 the United States (US) passed legislation granting the President authority to seize Russian sovereign assets and transfer them to a ‘Ukraine Support Fund’.Footnote 6 Similar legislative proposals have been or are being pursued in CanadaFootnote 7 and the United Kingdom (UK).Footnote 8
The Parliamentary Assembly of the Council of Europe (PACE) has called on States to ‘co-operate and transfer [frozen Russian State financial assets] to an international compensation mechanism’.Footnote 9 Within the EU, such steps were endorsed by the High Representative Josep BorrellFootnote 10 and the Baltic States together with Slovakia.Footnote 11 However, in light of legal and political concerns surrounding confiscation, much of the discussion has turned to finding other ways to use frozen or immobilized assets.Footnote 12 Thus, political actors have considered the ‘temporary active management’ of CBR assets,Footnote 13 or taxing windfall profits of asset holders and potentially using those tax returns to secure a loan extended to Ukraine.Footnote 14 Such a windfall tax would in particular affect central securities depositories (CSDs), most important among them being the Belgium company Euroclear, which (according to media reports) holds around €200 billion of Russian assets.Footnote 15
The Council of the EU has since acted on proposals concerning windfall profits. It first prohibited the disposal of such profits,Footnote 16 before introducing a tax on 21 May 2024. Thus, CSDs holding CBR assets of more than €1 million are subject to a special financial contribution of 99.7 per cent of their net profits. These revenues will be used to support Ukraine, mainly through the European Peace Facility,Footnote 17 with the first payment of €1.5 billion having been made in July 2024.Footnote 18
The adoption of these sanctions against Russian sovereign assets has reinvigorated an existing debate on the legal protection of sovereign assets under international law, which thus far has largely focused on the law of State immunity. In most instances, sanctions are taken by executive and/or legislative bodies of the territorial State, without the involvement of the judiciary. At the heart of that debate is thus whether State immunity protects foreign State property from such sanctions, insofar as they qualify as ‘measures of constraint’. This article argues that such a customary norm exists, but that its content should be construed differently than in relation to judicial proceedings.
2. Current debate on State immunity
2.1. State immunity at the intersection of territorial sovereignty and sovereign equality
The law on State immunity, as explained by the International Court of Justice (ICJ) in the Jurisdictional Immunities case, exists at the intersection of two competing principles: the principle of territorial sovereignty and the principle of sovereign equality.Footnote 19 While the former militates for a restrictive understanding of State immunity, the latter provides support for greater protection of the foreign State's interests.
When it comes to the notion of sovereignty, States are free to decide on the organization of their economic system.Footnote 20 This entails the right to regulate property rights with regard to assets present in their territory as they see fit.Footnote 21 While international law provides for important qualifications thereto—such as in the context of human rights or international investment law—it still stands as a matter of principle. Thus, as noted by the ICJ in the Asylum case, any ‘derogation from territorial sovereignty cannot be recognized unless its legal basis is established in each particular case’.Footnote 22 This likewise applies to State immunity, which constitutes ‘a departure from the principle of territorial sovereignty’.Footnote 23 Given that there is generally no applicable treaty,Footnote 24 the relevant rules stem from customary international law. Thus, both the existence of as well as the scope of any rule must be established by virtue of sufficiently widespcread and uniform State practice, accompanied by opinio juris.Footnote 25
At the same time, ‘[e]xceptions to the immunity of the State represent a departure from the principle of sovereign equality’.Footnote 26 Thus, the sovereignty of a State implies that it should not be subjected to the sovereign authority of another State. This is often expressed by the legal maxim par in parem non habet imperium (meaning ‘equals have no sovereignty over each other’Footnote 27), which stems from fourteenth-century political thought.Footnote 28
Modern State jurisdiction takes three forms: prescriptive jurisdiction (or the power of a State to legislate, typically within its own territory); adjudicative jurisdiction (the power for a State's courts to hear and decide cases); and enforcement jurisdiction (the State's authority to compel compliance with its own laws).Footnote 29 In principle, foreign States are subject to prescriptive jurisdiction, remaining bound by the domestic law of the territorial State.Footnote 30 However, the principle of State immunity protects a State from the exercise of adjudicatory jurisdiction by the territorial State (jurisdictional immunity stricto sensu), with exceptions to that immunity depending on what type of conduct is being adjudicated. In addition, State immunity protects against enforcement jurisdiction insofar as it is connected to adjudicatory proceedings (immunity from enforcement), regardless of whether the specific enforcement measure is taken by a court itself or an executive body on order of a court. Exceptions to immunity from enforcement depend on the use of property against which ‘measures of constraint’ are being taken.Footnote 31
However, what remains in dispute is whether and, if so, to what extent State immunity applies to other types of enforcement jurisdiction: thus to ‘measures of constraint’ adopted in a non-judicial context. This is of particular relevance in the context of sanctions regimes, which often include a range of measures taken by executive and/or legislative authorities against foreign State property. Thus, whether and to what extent these assets are protected by immunity against such measures is crucial to determine the legality of those types of sanctions. While the question has attracted new attention in recent years, it is not itself new. In the initial stages of the International Law Commission's (ILC) work on codifying the rules on jurisdictional immunities, some members considered that State immunity could ‘cover other types of power of the State, such as the power of the executive and legislative authorities, not necessarily linked to judicial power’, while others ‘thought there was little or no evidence’ in State practice for that assertion.Footnote 32
2.2. Two theories on State immunity from ‘non-judicial measures of constraint’
Two different theories have developed in reaction to this question. The first considers the law of State immunity equally applicable in a non-judicial context. The underlying assumption is that this field of law serves to safeguard sovereign equality,Footnote 33 and that its purpose would be frustrated if other (non-judicial) measures of constraint were excluded from its scope. Sompong Sucharitkul—later to become the first ILC special rapporteur on the topic—argued that:
[t]he same set of principles governing waiver of territorial jurisdiction, or non-exercise of sovereign authorities by the judicial branch of the government appear to be equally applicable with respect to the suspension or non-use of power by national authorities other than a court of law[.]Footnote 34
Similarly, Alfred Verdross and Bruno Simma contended that:
it is undisputed that no state is authorized to subject the activities of another state as a sovereign to its legislature, judiciary and executive, as all states are of equal status among themselves under international law[.]Footnote 35
More recent scholarship has also applied this understanding in the context of sanctions by executive or legislative organs against foreign central banks. Scholars making this argument generally simultaneously assert that such sanctions could or should be justified as countermeasures under the law of State responsibility.Footnote 36
The counter-theory contends that the law on (State) immunity only applies in the judicial context.Footnote 37 This would follow from existing State practice and opinio juris being limited to immunity before domestic courts, and a purported lack of materials suggesting that immunity would protect against measures taken independently by the executive or legislature.Footnote 38 In that vein, Robert Jennings and Arthur Watts noted that:
there does not seem to be any general requirement in international law that all such [foreign state's] property be granted, just because it is state owned, any special inviolability or other exemption from governmental action by the state in which it is situated. Thus it would seem to be liable to temporary seizure or to expropriation, may be the subject of orders restricting the foreign state's freedom to deal with the property or requiring it to deal with the property in a certain way, and may be subject to taxation.Footnote 39
In the context of unilateral sanctions, Ingrid Brunk contended:
Freezing assets does not implicate immunity under domestic or international law because it does not involve the assertion of jurisdiction by domestic courts, nor is an asset freeze necessarily related to the enforcement or execution of a court judgment.Footnote 40
This position is also supported by the contention that the principle of sovereign equality enshrined in Article 2(1) of the United Nations (UN) Charter cannot create norms in the absence of State practice.Footnote 41 In the current debates surrounding the legal protection of CBR assets, this argument—even if not explicitly endorsed—has found considerable traction.Footnote 42
The ICJ has addressed a number of immunity issues, particularly immunity from jurisdiction and enforcement in civil proceedings,Footnote 43 as well as the immunity of high-ranking officials in criminal proceedings.Footnote 44 While not directly concerned with it, one dictum in the Jurisdictional Immunities case might be read as addressing the question at hand: ‘[t]he rules of State immunity are procedural in character and are confined to determining whether or not the courts of one State may exercise jurisdiction in respect of another State’.Footnote 45 However, it can hardly be interpreted as resolving it, as it addresses jurisdictional immunities (rather than immunity from enforcement), and was concerned with an alleged conflict between jus cogens norms ‘and the rule of customary law which requires one State to accord immunity to another’, rather than the distinction between judicial and non-judicial measures of the territorial State. While the matter was an object of the dispute in the Seizure and Detention of Certain Documents and Data case—with Timor-Leste arguing for, and Australia against, the existence of immunity from non-judicial measures of restraint—the case was settled before the Court adjudicated on the merits.Footnote 46
2.3. The thesis of this article
This article contends that the question must be examined on the basis of customary international law, rather than solely relying on the purpose of norms on State immunity. In the context of State immunity, evidence of State practice and opinio juris primarily stem from domestic legislation, the case law of domestic courts, pleas of immunity advanced by States (before domestic and international judicial bodies), as well as other forms of diplomatic protests or public assertions on the (non-)existence of norms.Footnote 47 However, when it comes to non-judicial measures of constraint, the relevant materials often also stem from administrative, diplomatic and parliamentary practice. Their limited accessibility (in comparison to legislative or judicial practice) creates notable practical difficulties when seeking to evaluate the exact state of the law.
The increasing use of sanctions against foreign State property—typically taken by executive and/or legislative authorities, without involvement of judicial bodies—has led to additional State practice and opinio juris on the matter. The following two sections provide an examination of these materials in the context of immunity from non-judicial measures of constraint, demonstrating that there is sufficient support for such immunity in State practice and opinio juris. However, the content of the norm concerning non-judicial measures of constraint differs from immunity in the context of judicial measures of constraint.
3. Immunity from non-judicial measures of constraint: ascertaining the existence of a norm
3.1. State practice in domestic legislation and case law
Scholarship has highlighted that the materials that are typically referenced in the context of State immunity cannot provide a conclusive answer to the question at hand. They are generally limited to regulating immunity from (civil) court proceedings, as well as from enforcement measures taken by or on the order of courts. For instance, the 2004 UN Convention on Jurisdictional Immunities of States and Their Property (Jurisdictional Immunities Convention), not yet in force, only addresses ‘the immunity of a State and its property from the jurisdiction of the courts of another State’.Footnote 48 In the context of immunity from enforcement of foreign State property, the ILC Commentary to the relevant provisions clarifies that it ‘concerns immunity from measures of constraint only to the extent that they are linked to a judicial proceeding’.Footnote 49
Similarly, domestic immunity legislation generally provides that foreign States are ‘immune from the jurisdiction of the courts’ of the respective States.Footnote 50 However, formulations concerning immunity from enforcement of foreign State property vary more widely. Examples in domestic legislation provide that property of a foreign State: ‘is not subject to any process for the enforcement of a judgment or an arbitration award’,Footnote 51 ‘shall not be the subject of judicial enforcement’,Footnote 52 or have immunity ‘in respect of measures to secure a claim and immunity in respect of enforcement of a court decision’,Footnote 53 ‘from proceedings for execution of a judgment or other decision of a court’,Footnote 54 ‘from jurisdiction with respect to proceedings of a civil execution’,Footnote 55 ‘from attachment, arrest and execution’Footnote 56 or ‘in the case of an action in rem, from arrest, detention, seizure and forfeiture’.Footnote 57 Such differences notwithstanding, this legislation addresses the issue in the context of court proceedings, where immunity from enforcement is generally adopted as the basic premise and an exhaustive list of exceptions is provided.Footnote 58
There are only two instances where domestic legislation might be read as addressing non-judicial measures of constraint. While not explicitly concerning State immunity, French law generally provides for the protection of (foreign) central bank assets from seizure.Footnote 59 In comparison, Spanish Organic Law No 16/2015 includes provisions on the various types of immunities, including the immunity of foreign States. Its introductory provisions define ‘immunity from execution’ broadly as ‘a prerogative whereby a State, organization or person and its property may not be subject to coercive measures or to the enforcement of decisions rendered by the courts of another State’.Footnote 60 Despite the formulation suggesting that immunity from execution may also apply to ‘coercive measures’ (‘medidas coercitivas’) taken in a non-judicial context, the Part of the legislation on State immunity only applies ‘before Spanish courts’ (‘ante los órganos jurisdiccionales españoles’).Footnote 61 Moreover, although the law explicitly exempts the property of international organizations from any ‘coercive measure of an executive, administrative, judicial or legislative measure’ (‘medida coercitiva de carácter ejecutivo, administrativo, judicial o legislativo’), it contains no such provision on the inviolability of the property of foreign States.Footnote 62
Leaving aside the above two examples, care should be taken when evaluating the relevance of this domestic practice: although not providing support for the existence of a norm on immunity from non-judicial measures of constraint, it does not prove its non-existence. The Jurisdictional Immunities Convention was deliberately limited to disputes stemming from ‘relations between a State and foreign natural or juridical persons’Footnote 63 and does not address how State immunity applies in public law settings which essentially involve the application of domestic law in inter-State relations.Footnote 64 However, its Preamble suggests that customary law provides for immunities outside of the context of court proceedings.Footnote 65
There are certain areas of public (administrative) law in which domestic practice awards immunity to foreign States, such as competition lawFootnote 66 and, most importantly, tax law.Footnote 67 While the latter primarily concerns the exercise of prescriptive jurisdiction, it shows that immunity plays a role in a non-judicial setting. For instance, the UK has traditionally accorded a wide degree of immunity to States from domestic tax law. In the context of a recent consultation on whether to adjust that approach, the Secretary of the Treasury defined sovereign immunity broadly as ‘the principle that one sovereign State should not seek to apply its law to another sovereign State’.Footnote 68 Similarly, the Canadian Supreme Court considers that the sovereign immunity of States and their property ‘extends to all processes of Courts, all invasions of or interferences with their persons or property, and all applications of coercive public law brought to bear affirmatively, including taxation’.Footnote 69
The most pertinent case to the present discussion is Controller and Auditor-General v Sir Ronald Davison before the New Zealand Court of Appeal.Footnote 70 It concerned the powers of a Commissioner of Inquiry, appointed by an order of the executive and charged with examining allegations of tax fraud and evasion in which the Cook Islands were implicated. More specifically, the petitioners sought a declaration that sovereign immunity meant that the Commissioner had no power to require the production of documents belonging to the Cook Islands and held by them. The issue thus did not concern immunities applicable in court proceedings as such, but rather the violation of immunities applicable to the exercise of sovereign authority by an organ of the executive. While the judges relied on different arguments to find that immunity was not applicable in the specific circumstances (partly relying on the exception for ‘commercial transactions’), none of them suggested that it was of no relevance whatsoever.Footnote 71
Another practical problem stems from the fact that immunity from non-judicial measures of constraint constitutes a prohibitive norm. Thus, the relevant State practice to be evaluated consists of the absence of any measures of constraint taken against foreign State property.Footnote 72 While some scholars contend a relevant absence of practice,Footnote 73 customary law additionally requires a ‘parallel existence of explicit opinio juris’ that suggests that States feel legally obliged to abstain from taking a given measure.Footnote 74
A rare example of a particular inaction being explained based on State immunity may be found in the diplomatic practice of Austria. The Office of the Legal Advisor of the Austrian Foreign Ministry had to consider the immunity of a diplomatic building in Vienna in administrative proceedings given the proposed construction of an underground line passing below the premises. More specifically, it had to address whether the Vienna Transport Agency could initiate expropriation proceedings against the foreign State before an administrative authority, in order to be granted an easement. The Office of the Legal Advisor considered that the provisions of the Vienna Convention on Diplomatic Relations were in principle not applicable, as the ‘premises’ as such were not affected.Footnote 75 However, it then assessed the matter on the basis of State immunity, as reflected in the Jurisdictional Immunities Convention, and found that while expropriation proceedings could be initiated under Article 13(a), the outcome could not be enforced against the foreign State.Footnote 76 The administrative authority thus had to refrain from taking action and having the easement entered in the land register, without coming to a negotiated settlement.Footnote 77
As the next section will highlight, existing opinio juris largely stems from States protesting against non-judicial measures of constraint, in particular in the context of sanctions taken against foreign State property. In contrast, there is little to no opinio juris for the inapplicability of immunity. States that have taken such sanctions or are politically supportive of them have—even when asserting their lawfulness—abstained from claiming that immunity would not apply in the context of non-judicial measures of constraint.Footnote 78
3.2. Opinio juris in public statements, (diplomatic) protests and submissions in judicial proceedings
When examining the reactions to the freezing of central bank assets, scholars have contended that sanctions have been met ‘with no diplomatic protests or state practice suggesting that doing so violates international law of immunity’Footnote 79 or noted a ‘lack of any prominence that sovereign immunities occupy in those [affected] states’ public pronouncements’.Footnote 80 The absence of protest in such circumstances could, in itself, amount to opinio juris, if the affected State was ‘in a position to react’ to the measures.Footnote 81 However, many States voice their objections to such measures, often advancing a much more fundamental critique, by generally opposing unilateral or autonomous sanctions or so-called ‘unilateral coercive measures’. For example, in response to US measures following the Taliban's takeover of Afghanistan, a spokesperson of the Chinese Foreign Ministry condemned ‘the unreasonable and preposterous freezing of the assets of other countries’ central banks, an illegal act akin to banditry’.Footnote 82
However, criticism of non-judicial measures of constraint against State property as violating State immunity appears to be relatively consistent. The most explicit example is the reaction to the issuance of US Executive Order 13599, which blocked (i.e. froze) all property of Iran and Iranian financial institutions (including the central bank) within the US or held by a US person.Footnote 83 The Order was taken independently by the executive, even though—due to its interaction with statutory legislation—it also enabled courts to execute judgments against all blocked property, eventually leading to the Certain Iranian Assets case being brought by Iran before the ICJ.Footnote 84
A few months later the Iranian delegate to the Asian-African Legal Consultative Organization (AALCO) objected to the Executive Order in a statement:
Iran came under a most unprecedented economic coercive measure by the United States by blocking of the property of Central Bank of Iran and imposing other restriction [sic] on it. This unilateral act … contravenes all norms and principles of international law concerning the immunity of State and its properties as manifested also in the 2004 UN Convention on Jurisdictional Immunities and their Property. It is underlined therein, under article 21 and the preamble of this Convention that the jurisdictional immunities of States and their properties including property of central bank [sic] or other monetary authority of the State are generally accepted as a principle of customary international law.Footnote 85
At the same annual meeting, the 48-Member-State AALCO adopted a resolution ‘[c]ondemning the imposition of restrictions against AALCO Members States, Syrian Arab Republic and Islamic Republic of Iran by the Government of the United States of America’ as well as ‘the adoption of restrictive measures against states, especially in cases where the functional organs of a sovereign State, like Central Banks, are subjected to sanctions which violate immunity of State and its properties’.Footnote 86 Both the AALCO and Iranian positions thus explicitly frame the blocking of assets by the executive as a violation of State immunity. In the following two annual meetings of the AALCO, the Iranian delegate made similar commentsFootnote 87 and resolutions including the same paragraphs were adopted.Footnote 88
Subsequently, the US Supreme Court allowed the execution against Iranian assets in Bank Markazi v Peterson.Footnote 89 This triggered a more formal protest by Iran (prior to taking the case to the ICJ), which addressed both (alleged) violations of jurisdictional immunities, as well as the blocking of property by the executive branch, which contended that:
[i]t is a matter of grave concern that the United States Congress, along with other branches of the United States Government, seem to believe that they can easily defy and breach the fundamental principle of State immunity by unilaterally waiving the immunity of States and even central banks in total contravention of the international obligations of the United States and under a groundless legal doctrine that the international community does not recognize.Footnote 90
The Coordinating Bureau of the Non-Aligned Movement (representing 120 States) addressed similar points in an almost simultaneous statement, condemning the ‘illegal practice’ of allowing lawsuits to be lodged against sovereign States, that the legislation ‘pav[ed] the way for illegally confiscating foreign assets’, and ‘the actions by the United States Government to unlawfully hold’ assets of foreign States.Footnote 91 Thus these objections apparently all concern the non-judicial measures by the executive branch.Footnote 92
Similarly, the Foreign Minister of Venezuela contended that as a result of unilateral sanctions—which also included the freezing of assets of the central bankFootnote 93—Venezuela ‘suffered the brunt of a multidimensional financial, economic and property attack … against all legal principles of sovereign immunity’.Footnote 94 However, in comparison to Iran, Venezuela has not consistently framed its opposition against such unilateral sanctions as an issue of State immunity.
As noted in the Introduction, these arguments have resurfaced in relation to the measures taken against assets of the CBR. The most ‘formal’ fora for such arguments were debates on a UN General Assembly (UNGA) resolution recognizing that the Russian Federation was under an obligation to make reparation for the invasion of Ukraine, as well as the need for ‘an international mechanism for reparation’ and recommending the creation ‘of an international register of damage’ by the Member States.Footnote 95 While most of the States voting against the resolution framed it as an opposition to ‘double standards’, two abstaining States referred to sovereign immunity. The United Arab Emirates expressed ‘concern over the resolution's implications for sovereign equality and sovereign immunity’ and Sri Lanka argued that the UNGA cannot ‘usurp the sovereign immunity of State property under international law’.Footnote 96 The Russian Federation also argued that ‘the funds for damage compensation will be drawn from frozen, or rather stolen, Russian assets’, that the UNGA could not ‘annul sovereignty immunity, which States assets have under international law’ and that the resolution would lead to the ‘illegal expropriation of sovereignty assets’.Footnote 97
The Russian Federation has reacted to the ongoing debate on the seizure of its assets by issuing bilateral statements or declarations together with China,Footnote 98 IranFootnote 99 and Nicaragua,Footnote 100 all of which refer to the impermissibility under international law of seizing foreign State property in light of its immunity.Footnote 101 In other public statements Russian officials have decried the blocking of assets as a violation of ‘all norms and rules both of … domestic legislation and international law’.Footnote 102
However, States have also referred to State immunity in other very different circumstances when their property was affected by executive action. For example, an incident in which ‘bags containing official correspondence and communications’ were opened by Spanish officials on the border to Gibraltar, was called a ‘breach of the principles underlying the Vienna convention on diplomatic relations, and the principle of state immunity’ by the British Minister for Europe.Footnote 103
What remains surprising though is that neither the affected States nor the central banks themselves have thus far challenged in court the legality of asset freezes on immunity grounds. In relation to proceedings before the ICJ, this may be explained by a potential lack of a jurisdictional basis. Notably, Iran was unable to plead violations of State immunity in Certain Iranian Assets, as such violations were not covered by the compromissory clause of the Treaty of Amity.Footnote 104
However, jurisdictional issues cannot explain the lack of legal challenges before the Court of Justice of the EU (CJEU). Article 263(4) of the Treaty on the Functioning of the European Union allows any legal person—including StatesFootnote 105 and their central banks—to bring an action for annulment against restrictive measures that are directly addressed to them. These measures may be annulled due to an ‘infringement of the Treaties or of any rule of law relating to their application’—which also includes norms of customary international law. While not in the context of a challenge against restrictive measures, the CJEU has held that:
[t]he principles of customary international law … may be relied upon by an individual for the purpose of the Court's examination of the validity of an act of the European Union in so far as, first, those principles are capable of calling into question the competence of the European Union to adopt that act … and, second, the act in question is liable to affect rights which the individual derives from European Union law or to create obligations under European Union law in his regard.Footnote 106
The case law of the CJEU thus suggests that a violation of State immunity under customary international law could lead to the annulment of the legal act imposing restrictive measures.Footnote 107 However, although the Central Bank of Iran has challenged restrictive measures—including the freezing of funds—before the CJEU, it notably has not raised any arguments concerning State immunity.Footnote 108 A challenge on the basis of State immunity may yet be brought before the CJEU, however, as the Chairwoman of the CBR has repeatedly affirmed that they are working on legal challenges, calling it ‘a rather complex legal process’.Footnote 109
At any rate, there seems to be no opinio juris clearly suggesting that State immunity is generally irrelevant in the context of non-judicial measures of constraint. This becomes apparent when examining statements of the actors that have taken such sanctions or are politically supportive of them. While the EU asserts that ‘[a]ll restrictive measures adopted by the EU are fully compliant with obligations under international law’,Footnote 110 it provides no explicit legal reasoning on the (non-)applicability of norms of State immunity, the existence of exceptions or the character of restrictive measures as countermeasures.
A Committee of PACE has espoused the notion that State immunity would not protect foreign States’ assets from executive measures based on domestic legislation.Footnote 111 However, the PACE resolution passed on the basis of this Committee report only suggests that such measures would qualify as countermeasures, which would be ‘unassailable within the framework of sovereign immunity’.Footnote 112 Beyond this statement in the Council of Europe, States supportive of asset freezes on the political level have raised State immunity concerns themselves. Thus, in a public statement the Ukrainian Minister of Justice, when calling for the seizure of frozen Russian State assets, noted that they ‘are protected by sovereign immunity, but our understanding is that assets of a state (that) started a war, committed aggression, shall not be protected by sovereign immunity’.Footnote 113 In addition, a leaked non-paper of the EU's Ad Hoc Working Party on Frozen Assets argues that State immunity:
does not prohibit proportionate administrative restrictive measures which are temporary, reversible and not confiscatory in nature and which pursue the legitimate objectives of the Union's external action (hence the legality of the current restrictive measures adopted in respect of assets held, owned or controlled by the Russian state and its entities).Footnote 114
In both instances, the statements read as if State immunity is in principle applicable, but is not violated due to certain exceptions.Footnote 115 The non-paper cannot be considered to express the opinio juris of the EU (or its Member States) given its lack of publicity. However, it suggests that statements of the EU arguing that State immunity from non-judicial measures of constraint does not exist are unlikely to be forthcoming.
3.3. Conclusion on the existence of State immunity from non-judicial measures of constraint
The analysis above arguably shows that customary international law provides for a norm of State immunity from non-judicial measures of constraint. While somewhat scattered, State practice shows State immunity readily being applied in non-judicial settings, without this being considered as a peculiarity. Although not apparent in every instance, expressions of opinio juris appear to be predominantly in favour of State immunity from non-judicial measures of constraint, rather than against it. In particular, and in contrast to some scholars arguing for the existence of such a norm,Footnote 116 one does not have to rely on the principle of sovereign equality as its sole basis.
However, in many ways the force of the argument for a customary norm of State immunity from non-judicial measures of constraint depends on what the default rule is considered to be: the exemption from the application of domestic law, requiring the emergence of a new exception in non-judicial settings, or the precedence of sovereignty of the territorial State, requiring that such immunity is affirmatively shown.Footnote 117 From a historical perspective, this also relates to uncertainty whether the Latin maxim par in parem non habet imperium, as its wording suggests,Footnote 118 should be read as meaning that foreign States are generally free from the exercise of sovereign authority or whether that is limited to the exercise of adjudicative jurisdiction. As already alluded to above, scholarly opinion on the content of that ‘default rule’ is similarly divided to that on the (non-)existence of State immunity from non-judicial measures of constraint.Footnote 119 Likewise, judicial practice may be found for both a wider and more narrow understanding of the maxim of par in parem non habet imperium.Footnote 120
That being said, outside the field of State immunity, State property located abroad is unlikely to enjoy any other protection under international law: in particular, States have no substantive right to property under general international law or under treaties within international economic law.Footnote 121 Even when they hold property through separate legal entities, these have to meet additional requirements to qualify as ‘companies’ or ‘foreign nationals’ which might enjoy protection under certain treaties—a test which Iran's Central Bank notably did not meet in the context of the Iran–US Treaty of Amity.Footnote 122 Whilst the lack of alternative protection for State property has no legal bearing on the present question, such policy considerations will nevertheless shape the position of States in relation to immunity. Even assuming that a norm of State immunity from non-judicial measures of constraint exists does not imply that property of a foreign State benefits from absolute protection from the exercise of sovereign authority by the territorial State. The following section further analyses the norm and provides some indications as to its scope and content.
4. Sketching the contours of the norm
As with the existence of a customary norm, its content is to be assessed on the basis of State practice and opinio juris.Footnote 123 However the scarcity of (publicly available) practice in this context renders this task somewhat more difficult. Despite this, there is evidence to suggest that immunity against measures of constraint in a non-judicial context differs from that applicable in a judicial setting. If, taking the ICJ approach in Jurisdictional Immunities, immunity is conceptualized as balancing two competing principles, it is easy to understand that the balance is different in the judicial context than in the non-judicial context. In both instances, measures of constraint taken against State property that is in use for ‘governmental non-commercial purposes’Footnote 124 may be considered an encroachment on the foreign State's sovereignty.Footnote 125 Which branch the responsible organ of the territorial State belongs to appears immaterial to the existence of that encroachment as such. However, the sovereign interests of the territorial State may be implicated to a greater degree in a non-judicial context, where what is at stake may be more fundamental than merely an interest in ensuring the proper functioning of civil proceedings. The subject matters falling within the purview of administrative bodies (rather than civil courts) generally touch upon public policy objectives of the State,Footnote 126 such as health and safety regulations or export and import restrictions. It thus appears inappropriate to adopt the same legal standards developed in the context of judicial proceedings.Footnote 127
The following discussion seeks to elucidate the content of State immunity from non-judicial measures of constraint. In particular, this article argues that the norm is subject to a public policy exception, meaning the territorial State may take extraordinary measures against foreign State property to safeguard certain vital interests. Such interests would include preventing the commission of crimes, ensuring the investigation of crimes directed against the StateFootnote 128 and preventing other threats to public safety. Rather than relying on the traditional exception of ‘commercial’ use of property, the analysis considers the specific purpose of the measure of the territorial State, rather than the purpose of the property of the foreign State.Footnote 129
Moreover, as this public policy exception is contingent on the existence of a crime or a threat, certain determinations would be required, which could take account of the broader conduct of the foreign State. First, there must be a sufficient connection between the specific foreign State property and the particular crime or abstract threat. Second, measures might only be permissible on a temporary basis for the duration that the specific foreign State property poses a threat to public safety or is likely to be used in the commission of a crime. Acknowledging the existence of a public policy exception in the context of non-judicial measures of constraint also means that the territorial State may take certain measures against foreign State property through executive or legislative acts, which would be unlawful in the judicial context.Footnote 130 From a policy perspective, this is justified by the fact that the sovereign interests of the territorial State tend to be affected to a much greater degree in matters in which it acts through its executive or legislature. Thus, formulating and ascertaining what specific ‘public policy’ concern is sufficiently important to allow for measures of constraint to be taken is crucial to prevent eroding State immunity protections.
Given the scarcity of practice on State immunity, the argument also draws on case law on inviolability, with some caveats.Footnote 131 Most importantly, and despite some arguments to the contrary,Footnote 132 inviolability has no general relevance for State property, but rather is limited to those fields (such as diplomatic or consular law) in which it is provided for by treaty law.Footnote 133 While immunity is repeatedly invoked in the context of non-judicial measures, references to inviolability in State practice and opinio juris are limited to the aforementioned fields of law. However, the case law on inviolability might still assist with determining the content of State immunity from non-judicial measures of constraint for two reasons. First, their scope of application overlaps insofar as both are concerned with the exercise of enforcement jurisdiction against foreign State property. Notably, judicial bodies, including the ICJ, often refer to both inviolability and immunity when concerned with judicial measures of constraint. Second, the (quasi-)absolute nature of inviolabilityFootnote 134 suggests that its level of substantive protection will never fall below that provided by State immunity. Therefore, it is reasonable to assume that any measure in conformity with inviolability would likewise not provoke a claim of State immunity from non-judicial measures of constraint, rendering the case law on the former useful for ascertaining the content of the latter.
With regard to the content of State immunity from non-judicial measures of constraint, the first question concerns the definition of ‘measures of constraint’. This allows determining the minimum level of interference required in order for measures taken by the territorial State in relation to foreign State property to prima facie qualify as a breach of State immunity. In the judicial context, the term ‘measure of constraint’ is used as a:
generic term intended to embrace all measures capable of being taken against or in relation to property in connection with, and subsequent to the handing down of judgment in, court proceedings, with a view to executing that judgment.Footnote 135
A comparable matter was also addressed by the ICJ in the Arrest Warrant case, where it found that a Minister for Foreign Affairs:
enjoys full immunity from criminal jurisdiction and inviolability. That immunity and that inviolability protect the individual concerned against any act of authority of another State which would hinder him or her in the performance of his or her duties.Footnote 136
In a subsequent case, the Court clarified that ‘the determining factor’ was whether the person enjoying immunity was subjected ‘to a constraining act of authority’.Footnote 137 The same considerations should apply to non-judicial measures taken against foreign State property. Therefore, a measure is not contrary to State immunity if the person, entity or property enjoying immunity is not subjected to (or threatened with) the coercive powers of the State, but rather retains freedom of action.Footnote 138 Thus conducting investigations may not fall foul of the principle of immunity, even when such coercive powers are used vis-à-vis third parties in this context.Footnote 139 States therefore remain free to gather information about any foreign sovereign assets present in their territory, including through requiring the actual asset holders—insofar as they are distinct from the foreign State—to report them.
If the executive or legislative conduct of a territorial State in relation to foreign State property qualifies as a measure of constraint, this article argues that it may still be lawful based on a public policy exception. This finds explicit support in the New Zealand Court of Appeal case Controller and Auditor-General v Sir Ronald Davison. The Court was concerned with whether in the light of sovereign immunity, a Commissioner of Inquiry had the power to require the production of documents belonging to another State for the purpose of investigating violations of domestic tax law. The judges employed various arguments to deny the plea of sovereign immunity but they all noted that in principle, considerations of ‘iniquity and public policy’ may provide for a separate exception.Footnote 140 For instance, Judge Richardson stated that:
[w]here the conduct of the foreign state is in question, refusal of a claim to sovereign immunity could be justified only where the impugned activity, if established, breaches a fundamental principle of justice or some deep-rooted tradition of the forum state.Footnote 141
Such a public policy exception is not generally accepted in the context of jurisdictional immunities and court orders requiring the production of sovereign property as evidence would not be enforceable under the current law of State immunity.Footnote 142
However, there is support for the proposition that interferences for the purpose of gathering evidence can be permissible in the case law on inviolability: the Slovenian Supreme Court found that drawing blood from a diplomat (with their consent) after a traffic accident did not violate their inviolability.Footnote 143
Moreover, the prevention of crime may constitute a public policy concern that allows executive authorities to take extraordinary and temporary measures. In Tehran Hostages, the ICJ held that:
the observance of this principle [of inviolability] does not mean … that a diplomatic agent caught in the act of committing an assault or other offence may not, on occasion, be briefly arrested by the police of the receiving State in order to prevent the commission of the particular crime.Footnote 144
There is also an indication in practice that territorial States may temporarily seize property of a foreign State if necessary to prevent crimes in domestic law or ensure their prosecution. The property in question is passports, which are typically property of the issuing State, but might be seized by local authorities inter alia to prevent a suspect from leaving the country.Footnote 145
The existing case law thus shows that certain public policy objectives of the territorial State may allow it to take measures of constraint in relation to foreign State property that would otherwise violate State immunity. These public policy objectives arguably include the prevention of crimes, ensuring the investigation of crimes directed against the State, and preventing other threats to public safety. The following conclusion will further address how this norm of State immunity from non-judicial measures of constraint relates to the specific example of measures taken or proposed to be taken against Russian sovereign assets.
5. Conclusion
The above analysis demonstrates that the law of State immunity applies to measures of constraint, regardless of whether they are adopted in a judicial or a non-judicial setting. In addition to reflecting existing State practice and opinio juris, this outcome is also preferable for reasons of practical expediency—largely removing the need to discern from which organ a particular measure originated—as well as conceptual coherence. However, practice also indicates that the normative content of State immunity differs in a non-judicial context, given the differences between (civil) court proceedings and matters before executive organs.
The renewed interest in the concept of State immunity in relation to non-judicial measures of constraint has been prompted by the sanctions taken against the Russian Federation in response to its invasion of Ukraine. A comprehensive assessment of this particular situation requires consideration of certain other legal issues. As a preliminary matter, immunity protections are contingent on the existence of (property) rights of a State in the respective assets. Their existence is in principle determined by the lex situs, and may also require consideration of contractual arrangements. As noted in investment tribunals (and no less pertinent in the present circumstances): ‘[p]ublic international law does not create property rights. Rather, it accords certain protections to property rights created according to municipal law.’Footnote 146
Thus, insofar as the applicable domestic law does not result in (property) rights of a State to certain assets, these assets are prima facie not protected by immunity. This matter is at the heart of the debate surrounding the legality of taxing the windfall profits of CSDs stemming from income generated by CBR assets. While determination of the existence of rights ultimately depends on (confidential) contractual relationships, publicly available information suggests that the CBR does not have a proprietary claim to these profits and thus they are not protected by State immunity.Footnote 147
In addition, the Russian Federation will not be protected from the executive and legislative conduct of sanctioning States that falls below the threshold of ‘measures of constraint’. In particular, there is no reason to believe that the creation of an international register of damage relating to the invasion of Ukraine—even if outside the framework of the UN—would raise any issues under immunity law.Footnote 148
In contrast, sanctions involving the freezing or immobilization of assets in principle fall within the scope of application of State immunity. This is where the public policy exception suggested above would become relevant, as sanctioning States may seek to show that that these measures serve a sufficient sovereign interest. The case law discussed above has accepted that measures of constraint may be taken to prevent (certain) violations of domestic law, and this may also extend to the prevention of violations of international law. Thus, sanctioning States would have to show that the specific foreign State property would likely be used in furtherance of violations (such as financing the aggression against Ukraine). However, as the public policy exception largely allows for preventative measures, they must be temporally limited to the duration of the existence of a threat of violations.Footnote 149
However, State immunity will arguably still prohibit measures going beyond that. Thus, domestic legislation of the territorial States prescribing a particular use of CBR assets (as suggested by the ‘temporary active management’ option) or actually confiscating them is unlikely to be lawful under State immunity. With regard to these measures, the relevant legal question does not lie in the law on State immunity, but rather under the law of State responsibility. The question of whether they may be justified as countermeasures has also been the subject of much scholarly debate.Footnote 150
In conclusion, State immunity from non-judicial measures of constraint should be conceptualized as a norm with distinct content. This contributes to assessing the lawfulness of sanctions, as well as a wide range of other situations in which the executive and legislative authorities of a territorial State may take measures affecting foreign State property.
Acknowledgements
The author is grateful to the anonymous reviewers, the editorial team of the International and Comparative Law Quarterly, and to numerous colleagues who commented on earlier versions of this article in the context of the 2023 pre-conference workshop of the European Society of International Law (ESIL) Interest Group on Peace and Security, as well as the 5th Munich Public International Law Early Career Researcher Forum in 2023.
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