The administration of U.S. President Joe Biden, facing problems over the allocation of aid to Kyiv in Congress, has begun urgent talks with allies on using frozen Russian assets for military support for Ukraine, The New York Times reported, citing U.S. and European officials.
According to the officials, talks between finance ministers, central bankers, diplomats and lawyers on this topic have intensified in recent weeks: the White House insists that the G7 countries – Britain, France, Germany, Italy, Canada and Japan – work out a strategy for using Russian funds by February 24 – the second anniversary of the invasion.
Thus, the allies are asked to determine whether the money will be sent directly to Ukraine or used for its benefit in other ways, whether it will be used to restore and support the country’s economy or for military purposes.
After Russia’s attack on Ukraine in 2022, the G7 countries, the European Union and Australia froze the assets of the Russian Central Bank for €260 billion. The EU blocked most of it – €210 billion. The US, in turn, froze only $5 bln.
Earlier, Janet Yellen, the head of the U.S. Treasury Department, argued that it is illegal to seize blocked assets without congressional action. Some senior U.S. officials also expressed fears that countries around the world would no longer keep their funds in the New York Federal Reserve or in dollars if the U.S. set a precedent for confiscating money.
However, on December 20, it became known that Washington proposed that the G7 allies recognize themselves as “victims” of Russian aggression against Ukraine and on this basis confiscate $280 billion of Russia’s Central Bank. The document submitted by the USA for discussion said that all countries that financed Ukraine’s economy and its armed forces during the war could receive such a status.
After the confiscation of the Russian Central Bank’s assets, it is proposed to transfer these funds to Kyiv in tranches through the World Bank or the European Bank for Reconstruction and Development (EBRD). At the same time, the transfers will be counted as an “advance payment” as part of the compensation for war damage that Russia will have to pay to make peace.
In turn, Russian Finance Minister Anton Siluanov promised a mirror response if the country’s assets are confiscated in the West. “If such a decision is taken, an absolutely symmetrical response will follow. We also have enough assets that are frozen here”, he said.
The Kremlin has repeatedly said it would consider the seizure of Russian assets in favor of Kyiv as “direct theft”. Dmitry Peskov, a spokesman for the “Russian president”, threatened Western countries with legal action, calling the confiscation “legal nonsense”.
