World leaders are considering using frozen Russian assets to support Kyiv’s reconstruction efforts following Moscow’s invasion, according to U.S. Secretary of State Antony Blinken. The Group of Seven (G7) has discussed the possibility of seizing Russian assets to assist in rebuilding Ukraine’s infrastructure, with the goal of complying with international law.
While the Kremlin has criticized this proposal as “theft,” Blinken argued that the real theft has been the loss of Ukrainian lives, destruction of infrastructure, and annexation of territory. He emphasized the importance of utilizing these assets to help Ukraine recover, calling it a critical step that will eventually come to fruition.
The discussion surrounding the liquidation of Russian assets began in February 2022 when the United States and its allies froze around $300 billion in Russian central bank assets. The Senate Foreign Relations Committee also approved the REPO Act earlier this year, which would authorize the confiscation of Russian assets to support Ukraine.
Treasury Secretary Janet Yellen has expressed support for using these assets to aid Ukraine, emphasizing the humanitarian, moral, and economic imperative of providing assistance. She warned that Russia may interpret any hesitation from the U.S. and its allies as a sign of weakening resolve, potentially prolonging the conflict.
However, some Republicans have raised concerns about the consequences of seizing Russian assets. Sen. Rand Paul warned that such actions could escalate the conflict and lead to further loss of life in Ukraine. Other lawmakers, like Sen. J.D. Vance, cautioned that this approach could have negative repercussions on the U.S. financial system and limit future negotiating leverage in resolving the Russia-Ukraine conflict.
Overall, the debate over seizing Russian assets to support Ukraine’s recovery efforts remains contentious among policymakers, with differing views on the potential implications of such a decision.
UK Foreign Secretary David Cameron announced that significant progress has been achieved in accessing frozen Russian sovereign assets to support Ukraine. He stated that the issue would be addressed at the upcoming G7 summit.
“We are well aware of the urgent need for financial resources, and we are on track to unlock the frozen Russian assets in a mutually agreed manner,” Cameron informed the press.
European Commission President Ursula von der Leyen indicated that the initial phase of liquidating the assets could take place by July 1.
“I have informed the leaders that if we act swiftly in finalizing the proposal, we could release the first billion by July 1. The timeline is within our control,” von der Leyen stated during the March EU summit in Brussels.
EU Chief Diplomat Josep Borrell proposed redirecting the interest earned from the frozen Russian assets to aid Kyiv. Under his plan, 90 percent of the funds would be allocated to a dedicated account in Ukraine for the procurement of weapons.
IMF Managing Director Kristalina Georgieva and Ukrainian Prime Minister Denys Shmyhal discussed establishing an international mechanism to seize Russian assets and allocate them for Ukraine’s defense.
IMF Deputy Managing Director Gita Gopinath emphasized the need for robust legal backing for any program to prevent future legal challenges. She clarified that the IMF would not be directly involved in the decision-making process.
