The Ministry of Foreign Affairs and the Ministry of Justice are developing a legal basis to transfer frozen Russian assets in Estonia. A draft proposal will be presented to the government next month.
Estonian politicians and other western nations have discussed using the assets of Russian oligarchs and the central bank, frozen under western sanctions, to rebuild Ukraine which is expected to cost €350 billion.
However, an agreement has not yet been reached.
Legal experts have said that, under common law, it is difficult to seize assets from a state in a foreign court. But, at the same time, Russia's repeated violation of international law may make it easier to find a solution.
Minister of Foreign Affairs Urmas Reinsalu (Isamaa) said: "This will set a precedent in international law. The same applies to the creation of an extraordinary tribunal to hold the Russian Federation accountable for crimes of aggression. This is certainly a step that will significantly weaken Russia, deter the aggressor, and therefore there is a political justification for it."
The ministries are currently trying to find a legal justification for the transfer of assets.
One possibility is the general principle under international law that stipulates the actor causing the damage must pay reparations.
"I think that, on the basis of this principle, it is legally possible and politically imperative to do so," the foreign minister said.
The first proposal will be made to the government in February.
"There is no doubt that this will also require a clearer legislative framework, but then it must be done without delay," Reinsalu said.
Both money and physical assets such as real estate should be considered under the framework, he said.
"The fact that assets may be held in other items, whether immovable or movable, should not in itself prevent this scheme from being implemented," said Reinsalu.
The impact of this measure, if Estonia works alone, would be small, he said, but the European Commission is also working to find a pan-European solution.
There are tens of millions of euros worth of frozen Russian assets in Estonia, ERR reported in November. Over 90 percent are tied to two Russian oligarchs – Andrei Melnichenko and Vyacheslav Kantor.
Last year, Estonia sold 12,000 tonnes of sanctioned Russian ammonium nitrate fertilizer stored at Tallinn's Muuga Harbor.