FT: G7 countries no longer discussing full confiscation of frozen Russian assets

Despite Ukraineʼs insistence on the complete confiscation of Russian assets, G7 officials say in private conversations that this issue is no longer on the agenda. Instead, they are exploring alternative ways to withdraw funds from frozen assets.

Financial Time writes about it.

At a recent meeting of G20 finance ministers in Brazil, delegates were concerned about the potential seizure or use of frozen Russian assets.

Two ministers, Mohammed al-Jadaan from Saudi Arabia and Sri Mulyani Indrawati from Indonesia, expressed particular alarm. According to the publication, these two countries are lobbying for the idea that they should not confiscate Russian assets, fearing for the future of their own reserves stored in the West.

Proponents of a full confiscation of Russian assets, led by the United States, believe that this will provide a financial boost and potentially turn the war in Kyivʼs favor. According to opponents, such a step risks creating a dangerous precedent in international law, which can endanger not only the interests of any country that is at war with Western capitals, but also the international legal order.

Therefore, the G7 countries are looking for alternative options for withdrawing funds. The White House is promoting the idea, which it hopes will win the support of G7 leaders in June. It is about allocating about $50 billion to Ukraine in the form of a loan or bonds secured by future profits from frozen assets.

But the EU has another plan for this money: to use most of the current and future profits from Russian assets held by the Euroclear depository to jointly purchase weapons for Ukraine. All profits received until mid-February will be retained by Euroclear as a buffer against legal costs and risks.

The European plan will bring only about €3 billion a year, depending on the dynamics of interest rates.

• Since the beginning of the war in Ukraine, the EU has frozen the assets of the Russian Central Bank for more than €200 billion. Currently, the United States and the European Union are looking for legal opportunities to use all $300 billion of frozen Russian assets for the benefit of Ukraine.
• US President Joe Biden wants the G7 countries to make progress on implementing plans to use frozen Russian assets for the benefit of Ukraine before the leadersʼ meeting in June 2024. Biden privately told his allies that if Ukraine loses, the international order will be turned upside down for at least the next five decades.
• The Financial Times wrote that Ukraine may receive the first part of revenues from Russian assets frozen in the EU in July.