Washington reportedly wants to come up with a plan in time for the group’s February summit
The United States has called for working groups from the Group of Seven (G7) countries to explore ways to confiscate hundreds of billions of dollars in frozen Russian assets, the Financial Times reported this week.
The United States, backed by the UK, Japan and Canada, has proposed setting up preparatory work for expropriating over $300 billion in Russian foreign exchange reserves that were immobilized by Western nations after the start of the Ukraine conflict.
Washington wants to consider options for the confiscation at a G7 leaders’ meeting around February 24 next year, according to the outlet. Discussions on how to develop a policy regarding Russian funds, and what risks are involved, were reportedly held in December by G7 finance ministers and their deputies.
“The three working groups proposed by Washington would examine the legal issues around confiscation; the method of applying such a policy and mitigating risks; and options for how to best channel the support to Ukraine,” the FT wrote.
While no final decisions have been taken and the issue remains highly debated in the EU, the acceleration of work to seize Moscow’s assets and use them to help Ukraine highlights its “rising importance” for the West, the outlet noted.
Debates are ongoing on the details, and whether the frozen funds would be sent directly to Ukraine – notorious for its corruption – or used in some other way, like tapping the proceeds from the blocked assets or using them as collateral for loans.
The US has not publicly supported the takeover of Russian assets. However, according to the FT, Washington has “privately circulated a discussion paper this year within the G7 suggesting seizures of Moscow’s frozen assets would be lawful as ‘a countermeasure to induce Russia to end its aggression.”
The European Union has so far stopped short of seizing Russian money, instead seeking ways to tap profits generated from the frozen funds.
At the same time, the EU, where most of the assets are blocked, is more wary of a direct confiscation, fearing possible retaliation from Moscow if the money is taken.
Currently, €210 billion ($230 billion) of Russia’s reserves are held in the bloc’s financial institutions, with €191 billion in Belgium, €19 billion in France, and €7.8 billion in non-member Switzerland.
France, Germany, and Italy, which take over the G7 presidency in 2024, remain highly cautious about the idea, and have expressed reservations, urging to carefully assess the legality of confiscating Moscow’s assets before a decision is taken.
