State Continuity of The Baltic States
The Baltic claim of continuity with the pre-war republics has been accepted by most Western powers. As a consequence of the policy of non-recognition of the Soviet seizure of these countries, combined with the resistance by the Baltic people to the Soviet regime, the uninterrupted functioning of rudimentary state organs in exile in combination with the fundamental legal principle of ex injuria jus non oritur, that no legal benefit can be derived from an illegal act, the seizure of the Baltic states was judged to be illegal thus sovereign title never passed to the Soviet Union and the Baltic states continued to exist as subjects of international law.
The official position of Russia, which chose in 1991 to be the legal and direct successor of the USSR, is that Estonia, Latvia, and Lithuania joined freely of their own accord in 1940, and, with the dissolution of the USSR, these countries became newly created entities in 1991. Russia's stance is based upon the desire to avoid financial liability, the view being that acknowledging the Soviet occupation would set the stage for future compensation claims from the Baltic states.
Read more about this topic: Occupation Of The Baltic States
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