The three Baltic countries, or the Baltic states – Estonia, Latvia, and Lithuania – are held to have continued as independent states under international law while under Soviet occupation from 1940 to 1991, as well as during the German occupation in 1941–1944/1945. The prevailing opinion accepts the Baltic thesis that the Soviet occupation was illegal, and all actions of the Soviet Union related to the occupation are regarded as contrary to international law in general and to the bilateral treaties between the USSR and the three Baltic countries in particular.

This legal continuity has been recognised by most Western powers and is reflected in their state practice. The application of the Stimson Doctrine by the Welles Declaration where a significant segment of the international community refused to grant formal approval for the 1940 Soviet conquest during World War II, the resistance by the Baltic peoples to the Soviet regime, and the uninterrupted functioning of rudimentary state organs in exile support the legal position that sovereign title never passed to the Soviet Union, which implied that occupation sui generis (German: Annexionsbesetzung, lit. 'annexation occupation') lasted until the Soviet Union recognized the independence of the three countries in 1991. Thus the Baltic states continued to exist as subjects of international law. On that basis, the Baltic states maintained that they did not need to follow the process of secession outlined in the Soviet Constitution, since they were reasserting an independence that still existed.

The official position of Russia is a continuation of the Soviet position that Estonia, Latvia, and Lithuania were not annexed by the Soviet Union but joined of their own accord in 1940. Russia insists that incorporation of the Baltic states gained international de jure recognition by the agreements made in the 1945 Yalta Conference, the 1945 Potsdam Conference, and by the Helsinki Accords. They have also argued that in accordance with the internal Soviet laws and constitution, restoration of independence was illegal and the Baltic republics could become newly created sovereign entities only via the secession laws of the USSR. According to this position, all previous treaties, such as the Treaty of Tartu, are invalidated, and all possible claims by Baltic states for monetary compensation have no legal basis. This alternate thesis on continuity of the Baltic states and its related consequences has fueled a fundamental confrontation between Russia and the Baltic states.

The legal principle, ex injuria jus non oritur (law cannot arise from unjust acts), differs from the competing principle of ex factis jus oritur (the facts determine the law). On one hand, legal recognition of Baltic incorporation on the part of other sovereign nations outside the Soviet bloc was largely withheld based on the fundamental legal principle of ex injuria jus non oritur, since the annexation of the Baltic states was held to be illegal. On the other hand, de facto interruption of statehood due to foreign occupation for a period of fifty years did indeed occur, giving a place to the legal principle of ex factis jus oritur, as well as irrevocable territory and demographic changes that make the Baltic case much more complex than mere restitutio in integrum (a restoration of—in this case—territorial integrity).

Historical background

The four countries on the Baltic Sea that were formerly parts of the Russian Empire – Finland, Estonia, Latvia and Lithuania – consolidated their borders and independence after the Estonian, Latvian and Lithuanian independence wars following the end of World War I by 1920 (see Treaty of Tartu, Latvian-Soviet Riga Peace Treaty and Soviet-Lithuanian Treaty of 1920). The European Great Powers accorded de jure recognition of Estonia and Latvia on 26 January 1921 and Lithuania on 20 December 1922. The United States extended de jure recognition to all three states on 28 July 1922.

All three peace treaties between the respective Baltic states and Soviet Russia identically enshrined the right of self-determination and Russia renounced all previous rights and claims as final and permanent. This principle of self-determination reflected one of four key principles proclaimed by Lenin and Stalin on 15 November 1917 in the Declaration of the Soviet Government: "The right for Russia's peoples of free self-determination even unto separation and establishment of independent states."

After the creation of the Union of Soviet Socialist Republics in 1922, the new union had by 6 July 1923 adopted all treaties entered into previously by Soviet Russia and the original peace treaties continued to be a basis for relations between the USSR and Estonia, Latvia, and Lithuania, respectively.

In the subsequent decade, several bilateral and multilateral treaties and agreements regulating relations were entered into:

Protocol to bring into force the Pact of Paris (to which all four parties were original signatories), signed in Moscow on 9 February 1929, renouncing war as an instrument of national policy

bilateral Treaties of Non-Aggression signed with the respective Baltic states and the Soviet Union between 1926 and 1932

Conciliation conventions related to the Non-Aggression treaties

Convention for the Definition of Aggression signed in London in July 1933

This Convention for the Definition of Aggression, an initiative of the Soviet Government, defined in Article 2 various acts as aggression, including naval blockades. The Convention also stipulates that "No political, military, economic or other consideration may serve as an excuse or justification for the aggression referred to in Article 2."

Estonia

Estonia adopted the Estonian Declaration of Independence on 24 February 1918. The document stated a number of principles such as freedom of expression, religion, assembly and association. These principles were further elaborated in the Provisional Constitution of Estonia (Estonian: Eesti vabariigi valitsemise ajutine kord) of 1919 and the first Constitution of 1920. Popular sovereignty was to be the basis of Estonia. Also, the second, presidential Constitution was based on popular sovereignty. Later the Constitution of 1938 was an attempt to return to democratic rule, but it still accorded powers to the president. Overall, in spite of internal political changes, Estonia was a legal, internationally recognized state in the years prior to 1940.

This independence was interrupted in June 1940, in the aftermath of the Molotov–Ribbentrop Pact between Nazi Germany and the Soviet Union of August 1939. The Soviet Union used a similar pattern with all three Baltic states, beginning with ultimatums on the basis of alleged failures to fulfill mutual assistance pacts signed the previous year. The ultimatums had to be obeyed within hours, and soon after the Soviet troops marched into the capitals. The Soviets proposed and approved their new governments. Now, the new local governments seemingly made decisions which led to the annexation. In order to create an image of legitimacy, new elections were imposed under the presence of Soviet troops. The United States, along with a number of other states, did not recognise the occupation and annexation of the Baltic states.

Latvia

Latvia adopted the Declaration Establishing a Provisional Government of Latvia on 18 November 1918. In 1920, the freely elected Constitutional Assembly adopted two basic laws. The Satversme was adopted in 1922. However, Prime Minister Kārlis Ulmanis took power by a coup d'état and the parliament was dissolved in 1934.

Lithuania

After a century of foreign domination the Council of Lithuania adopted the Act of Independence of Lithuania on 16 February 1918. During the first decades of the Republic of Lithuania, three Constitutions were adopted in 1922, in 1928 and in 1938. The legislative institution of Lithuania was the freely elected parliament. However, Antanas Smetona took power by a coup d'état in 1926. He adopted the Constitution of 1928 which increased presidential power and reduced the size of parliament from 85 members to 49. In the Constitution of 1938, the president received broader powers, but the parliament was entrusted with legislation instead of the previous system of presidential decrees. Furthermore, the president was elected by the people for seven years.

Soviet incorporation in international law

The forcible annexation of the Baltic states was an illegal act under both customary and conventional international law. Under customary law the annexation violated the basic principles such as state sovereignty and independence, the prohibition against violent seizure of territory and the prohibition against intervention. In conventional law the actions of the Soviet Union violated practically every provision of every major convention between the Soviet Union and the respective Baltic states. The Secret Protocols with Germany were a violation of Article 2 of the Estonian and Latvian Non-Aggression treaties. The threat to use force and the ultimatum to conclude the Treaties of Mutual Assistance violated the spirit and letter of the respective Peace Treaties, the Non-Aggression Treaties, the Conciliation Conventions, the Kellogg–Briand Pact and the Protocol for the Renunciation of War. The Soviet action in the military occupation, forcible intervention and annexation constituted an act of aggression within the meaning of Article 2 of the Conventions for the Definition of Aggression of 1933, nor was there any justification according to Article 3 and the Annex of that same convention.

Western non-recognition of annexation

Baltic diplomatic sphere 1940–1991

Most of the countries in the Western Bloc refused to recognise the incorporation of the Baltic states de jure and only recognised the Soviet local "governments" in Estonian SSR, Latvian SSR and Lithuanian SSR de facto or not at all. Such countries recognized Estonian/Latvian/Lithuanian diplomats and consuls who still functioned in the name of their former governments. These aging diplomats persisted in this anomalous situation until the ultimate restoration of Baltic independence.

During the period 1940–1991 the US continued to receive Baltic diplomats, first appointed in office by the Baltic governments before 1940, after 1980 by the Baltic diplomatic services’ senior members. The Soviet Foreign Ministry issued formal protests against the Baltic diplomatic missions remaining open in Washington, DC, and elsewhere.

In 1947 a joint communication on the occupation of Baltic nations to the UN was sent by the Estonian, Latvian and Lithuanian diplomats abroad. The Baltic Appeal to the United Nations (now "Baltic Association to the United Nations") was formed in 1966.

On 26 March 1949, the US State Department issued a circular stating that the Baltic states were still independent nations with their own diplomatic representatives.

In Canada, the official list of diplomats included the offices of Estonia, Latvia, and Lithuania that in the early 1960s caused the Soviet Embassy in Canada to refuse to receive the lists distributed by the Canadian Department of External Affairs.

Eventually, the UK excluded the Baltic diplomats from the Diplomatic List, but, as a compromise, Baltic diplomats continued to be accepted as possessing a diplomatic character by His/Her Majesty's Governments.

The UN received numerous appeals from the Baltic diplomatic missions, Baltic refugee organizations, resistance groups in Baltic countries and the US diplomats and policy makers concerning the Baltic question. Due to the presence of the USSR in the Security Council, the questions were never raised on the official agenda of the UN. A joint appeal to the UN was made by the resistance groups in Baltic countries, calling the United Nations to denounce the Soviet occupation that resulted in the 1983 resolution of the European Parliament on the restoration of Baltic independence.

Baltic assets 1940–1991

After the invasion of Denmark and Norway by Nazi Germany on 9 April 1940, President Franklin Delano Roosevelt issued Executive Order 8389, under which the United States Department of the Treasury froze all financial assets of occupied European countries in the US. After the Soviet occupation of Estonia, Latvia, and Lithuania, Executive Order 8389 was extended to the assets and properties of the three Baltic countries. During the first Soviet occupation in July 1940, the United States issued Executive Order 8484 which froze Latvian, Lithuanian and Estonian financial assets, including gold reserves. The freezing of Baltic assets by the US was condemned by the Soviet Union, and it was declared that there should not be any legal basis for delaying the transfer of the Baltic gold from the US Federal Reserve to the State Bank of the Soviet Union.

Gold reserves

Estonia, Latvia and Lithuania also kept gold reserves in banks in the United Kingdom. In July 1940, the Bank of England sequestrated the Baltic gold reserves deposited in the UK, partly as a retaliation of the nationalisation of British owned property in the Baltic countries by the USSR, but also because Britain considered annexation of the three countries unlawful. During the 1950s, the USSR claimed the gold regularly but was rejected. In 1967, the Labour government used the reserve in settling mutual claims with the Soviet Union. On 5 January 1968, an agreement between the UK and USSR was achieved, and the Soviet Union renounced all claims to the Baltic gold held in the Bank of England in return for the waiving of all claims by the UK arising from nationalizations in the USSR. In 1992 and 1993, the United Kingdom government transferred an equal amount of gold reserves equivalent to £90 million back to the Baltic countries.

The three Baltic governments' assets deposited in Sweden were released to Soviet Union immediately after the Soviets demanded the Baltics' gold reserves to be handed over in 1940. The amount was compensated in 1992 by Sweden to the three countries soon after they had regained full independence. In 1991, Sweden promised Estonia to restitute the gold, and, in 1998, the Swedish government discovered the bank accounts belonging to Baltic nationalities.

The French government refused to turn over the three tons of gold deposited in the Bank of France by Latvia and Lithuania to the USSR.

The gold reserves deposited by the three Baltic states prior to 1940 into the Bank for International Settlements in Switzerland remained intact. After the Baltic countries regained independence in 1991, the Baltic gold was released to the central banks of Estonia, Latvia and Lithuania.

Property

After the 1940 occupation, there were issues related to the property of Baltic citizens abroad. The majority of foreign states refused to send Baltic ships in their ports to the Soviet Union. The Soviet government brought lawsuits against Canada, Ireland, the United Kingdom and the United States without results. American and British courts did not recognise the Soviet authority to the property of Baltic nationals. However, states gave Baltic legations and consulates to the Soviet Union, although some of transfers stipulated that the process did not involve legal title.

At the end of the Second World War, the building housing the Estonian Legation in Berlin was placed under guardianship by the German authorities. On 23 September 1991, a German court lifted that guardianship and restored the property to Estonia.

Liabilities

On 4 December 1991, leaders of the "constituent republics" of the Soviet Union (which ceased to exist a few weeks later) signed the treaty on the division of the Soviet foreign debt. The three independent Baltic countries refused to participate in the process, and never signed the treaty. In 1993, the Russian Federation announced it would alone be responsible for the debt.

Helsinki Accords

The Baltic question was raised during the negotiations of the Final Act of the Conference on Security and Cooperation in Europe in 1975. During the negotiations, the Soviet Union advocated for any attempt of territorial claims to be deemed an act of aggression. West Germany, Spain, Ireland and Canada opposed this; the Canadian representatives stated that accepting the Soviet proposal would mean de jure recognition of the Soviet incorporation of the Baltic states. Supported by other NATO members, the final act instead stated that the current "frontiers"—boundaries of territorial control, as opposed to "borders" which would signify boundaries of sovereign jurisdiction—of the Soviet Union would not be violated. The president of the United States and leaders of other NATO member states confirmed in statements that the provision did not entail recognition of the incorporation of the Baltic states into the Soviet Union. Nevertheless, Russia insists that the international community legally recognised the incorporation of the Baltic states into the USSR at Yalta, Potsdam, and Helsinki, characterizing Helsinki as recognizing sovereign borders.

List of recognition and non-recognition of annexation

In terms of the annexation of the Baltic states, the nations of the world form five groups: 1. countries that explicitly and consistently did not recognise the Soviet occupation and annexation, either de jure or de facto; 2. countries that never recognised the Soviet occupation de jure but occasionally recognised the Soviet occupation and administration in the Baltics de facto; 3. countries that at some point of time also recognised the incorporation of the Baltic states into the USSR de jure; 4. countries that have not expressed their position in any way. 5. countries under communist rule that considered the annexation of the three Baltic countries into the USSR legal without reservation.

1. De jure and de facto non-recognition

United States – maintained official diplomatic relations, neither de jure nor de facto recognition accorded. After the opening of the US consulate in Leningrad in 1973, whose consular district included Tallinn, Riga and Vilnius, US officials began contacts with Soviet officials in Estonia, Latvia and Lithuania. The US consul general would not directly engage with the highest level Soviet state and Communist party officials in the three countries, but conducted visits to the three capitals and met with the deputy leaders in the state and party hierarchies.

Vatican City – maintained official diplomatic relations, neither de jure nor de facto recognition accorded.

Ireland – no official relations, neither de jure nor de facto recognition accorded.

2. De jure non-recognition, recognition of de facto control

Afghanistan – no final decision on non-recognition policy, no official relations with Baltic representatives

Australia – semi official relations maintained with Baltic representatives, though de jure recognised for 17 months between July 1974 and December 1975 by the Whitlam government on Whitlam's personal initiative as prime minister and acting foreign minister Recognition was withdrawn by the subsequent Fraser government in 1975.

Belgium – no final decision on non-recognition policy, no official relations with Baltic representatives

Brazil – official relations with Baltic representatives, save for the Política Externa Independente era.

Canada – semi official relations maintained with Baltic representatives. De facto recognition accorded, de jure denied

China

Republic of China (Taiwan)