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Peter Davis

An writer at FOMOdrive

  • Dec 23, 2023
  • 3 min read

The scandal surrounding the confiscation of Russian assets is gaining momentum

Urgent negotiations have been initiated by the United States regarding the utilization of Russian resources for Ukraine.

Congress is increasingly in favor of this action.

Ukraine wants to receive Russian assets, and the West is attempting to portray itself as a victim in order to facilitate this transfer.

Most of the assets that are frozen in Europe are held in Euroclear (Belgium).

In response to the confiscation of Russian assets, the Russian Ministry of Finance pledged to suspend the funds of foreign investors in C accounts.

Negotiations between the US administration of President Biden and US allies have started urgently concerning the utilization of approximately $300 billion of the Russian Central Bank's frozen assets.

According to sources cited by The New York Times (NYT), they are looking to use the funds for military aid to Ukraine in light of diminishing financial support.

US Treasury Secretary Janet Yellen previously declared that Congress must take action in order for asset confiscation to be possible. Furthermore, American authorities were concerned that other countries might withdraw their assets from the US if such measures were taken.

The US authorities, in conjunction with the G7 countries, have decided to investigate the feasibility of utilizing existing mechanisms and powers to access Russian money, or if they should seek authorization from Congress. According to the New York Times, there is increasing support for such measures in Congress.

In recent weeks, the debate has become more heated as the US Congress was unable to come to an agreement on a new military aid package for Ukraine before the end of 2020.

The Financial Times (FT) previously reported that the G7 countries are exploring options to unfreeze the assets of the Russian Central Bank and use them to fund Kyiv.

It is possible to recognize European countries as "victims of the conflict" and transfer Russian assets to Ukraine in installments through the World Bank or the European Bank for Reconstruction and Development (EBRD).

The Financial Times (FT) viewed a document from the European Commission which revealed that in the previous year, approximately €260 billion of Russian Central Bank assets were situated in the G7 countries, the EU, and Australia. The majority of this sum was in the EU, amounting to €210 billion. The US only froze $5 billion. Euroclear holds €191 billion of the assets that have been blocked in Europe.

In June, the European Central Bank (ECB) cautioned the European Commission that the seizure of Russian assets or proceeds from them could harm the standing of the euro as an international currency and destabilize financial stability.

Anton Siluanov, the head of the Ministry of Finance, cautioned the West that if they choose to seize Russian assets, Moscow will take a "symmetrical response" in return.

If a "unfriendly" country takes a step, Russia will respond by withdrawing funds from accounts C, which are used to fulfill obligations on securities and dividends to foreign counterparties.

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