G7 Acknowledges Russian Asset Seizure Not on the Table

Officials from the G7 group of the world’s most industrialized nations are privately admitting that an all-out seizure of frozen Russian assets is no longer on the table, the Financial Times reported on Friday.

Ukraine has been pushing for the West to seize the frozen Russian assets, but the U.S., the EU, and various other G20 countries disagree on whether confiscation of assets should be an option, FT notes.

G7 officials are privately ruling out the idea of outright asset seizure and are exploring other “ways of extracting funding from the frozen assets,” according to the financial newspaper.  

Billions of U.S. dollars and euros of Russian central bank assets have been frozen at various Western banks, mostly in the G7 countries, as well as in Belgium and Switzerland.

“We immobilized the assets together; we would like to mobilize them together as well,” Daleep Singh, White House deputy national security adviser for international economics, told FT.

While the U.S. has signaled it could be willing to explore Russian asset seizures, the EU and many of its members – including G7 members Germany, France, and Italy – are very wary of this approach. The EU member states are concerned that anything appearing or close to asset seizure could lead to retaliatory moves from Russia, according to the FT.

The U.S. is looking to resolve the stalemate by proposing the release of around $50 billion of funding for Ukraine via loans or bonds that would be secured against future profits from the frozen assets, Singh told FT.

The G7 leaders are expected to discuss the frozen Russian assets at their summit in Italy in June.

“Confiscating sanctioned Russian state assets should be the last resort,” Creon Butler, Director of Global Economy and Finance Programme at Chatham House, wrote in a commentary this week.

It is not certain that the benefits of confiscating the frozen Russian assets to the G7 will outweigh the costs it will bear, Butler said, adding that “Financing support for Ukraine through normal public expenditure, at least for the time being, is likely to be the better option.”

By Charles Kennedy for Oilprice.com

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