The US reportedly wants to create leverage for Ukraine before President-elect Donald Trump is sworn in
Washington has tried to convince the EU to confiscate frozen Russian assets before US President Joe Biden leaves office but this seems unlikely to happen, according to CNN.
The US and its allies have blocked an estimated $300 billion in Russian sovereign funds in early 2022, following the escalation of the Ukraine conflict. As most of these assets are under the control of the Brussels-based clearinghouse Euroclear, the EU has been reluctant to seize them outright, fearing that Moscow’s reprisal could wreck the bloc’s economy.
The White House has made one last effort to seize the money before President-elect Donald Trump takes office on January 20, CNN reported on Monday, citing two anonymous “senior officials.”
The US wants the EU to move the money to a special escrow account, from which it could be released if Russia-Ukraine peace negotiations are successful.
“If you want your money back, you’re going to have to come talk,” one of the officials told CNN.
Biden officials have claimed that Trump’s nominees are “generally supportive” of the strategy, seeing the frozen funds as possible leverage over Moscow they would need to negotiate a peace.
However, the EU governments “remain skeptical” about the proposal, making it “highly unlikely” to happen, according to the outlet. The bloc is concerned that confiscating the money would violate international law.
The US has tried to argue otherwise for more than a year. Speaking at a conference in Washington last May, one of the architects of the US sanctions regime, Daleep Singh, argued that the decision to freeze Russian sovereign assets was already a major precedent that “did not lead to an appreciable shift away from G7 currencies,” but acknowledged that confiscation was a “red line” for several countries.
Biden was expected to bring up the funds at a meeting with the Italian leadership and Ukraine’s Vladimir Zelensky in Rome this week but canceled the trip due to the wildfires ravaging Los Angeles.
Zelensky demanded all of the frozen Russian funds for Ukraine, in an interview with podcaster Lex Fridman earlier this month.
“We will take it. Take money, what we need for our domestic production, and we will buy all the weapons from the US,” he told Fridman.
Russian Foreign Ministry spokeswoman Maria Zakharova called Zelensky “completely out of his mind,” and described his interview as a “hellish mixture of neo-Nazism and terrorism with drug delirium.”
Moscow has denounced the blocking of its sovereign funds as “absolutely illegal” and said any attempt to confiscate them would be outright theft. In that case, Western assets inside Russia valued at more than $300 billion would be targeted in retaliation, Russian Finance Minister Anton Siluanov has said.
