Monday, March 4, 2024

US supports seizure of $300 billion in Russian assets

The White House supports the idea of confiscating Russian assets that have been frozen since the outbreak of the Ukraine conflict, Bloomberg has reported, citing a US National Security Council (NSC) memo.

The NSC – which is the US president’s principal forum for considering national security, military and foreign policy matters – forwarded the document to the Senate Foreign Relations Committee in November, according to the report.

According to the memo, the Joe Biden administration backs “in principle” a bill that “would provide the authority needed for the executive branch to seize Russian sovereign assets for the benefit of Ukraine”.

Some $300 billion in Russian funds remain frozen in the West, more than $200 billion of which is held by the EU and the rest by the US.

The “shift” in the White House’s stance on the matter comes as Republican lawmakers continue to resist attempts by the Biden administration to push through another $60 billion in military support for Kiev, Bloomberg said. The EU’s €50 billion ($55 billion) aid package for Ukraine also remains stalled due to a veto by Hungary.

A senior administration official told the agency that Washington sees the confiscation of Russian assets as a tool with which to make Moscow pay for damage done to Ukraine. The World Bank estimated last year that the reconstruction of the country would cost at least $411 billion.

The White House wants to align the seizure of Russian funds with its G7 allies, especially those in the EU, where support for the measure has been “tepid”, Bloomberg added. Germany, France and the European Central Bank are worried that it could undermine the Eurozone’s stability and provoke Russia to retaliate and also confiscate foreign funds that it blocked in a tit-for-tat response, it added.

The issue is expected to be discussed at the G7 leaders’ meeting in February, close to the second anniversary of the start of Russia’s military operation in Ukraine, a source told the agency.

During his visit to Estonia on Thursday, Ukrainian President Volodymyr Zelensky again stated Russian assets abroad “need to be located, frozen and, after all, confiscated” before being channeled to Ukraine.

Commenting on the Bloomberg report, Kremlin spokesman Dmitry Peskov warned that the seizure of Russian assets by Washington would be a step towards “undermining the international financial authority and the confidence of the international investors” in the US.

By working to legalize the move at home, the Biden administration is trying to “pressure” the EU, which holds most of Moscow’s frozen funds, to commit similar “illegal actions” and face “the inevitable losses, fines and legal consequences” that will follow, Peskov claimed.

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