The G7 must give up on seizing frozen Russian assets

Officials in the G7 group of the world’s most industrialized nations are privately admitting that a full seizure of frozen Russian assets is no longer on the table, the Financial Times reported Friday.

Ukraine has been pushing for the West to seize frozen Russian assets, but the United States, the European Union and several other G20 countries disagree on whether asset confiscation should be an option, he notes the FT.

G7 officials are privately ruling out the idea of ​​a full asset seizure and are exploring other “ways to extract funds from frozen assets,” according to the financial newspaper.

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

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

While the United States has signaled that it may be willing to explore seizures of Russian assets, the European Union and many of its members – including G7 members Germany, France and Italy – are very wary of this approach. EU member states fear that anything appearing or approaching the seizure of assets could lead to retaliatory moves by Russia, according to the FT, which, for example, has already happened with companies such as Ariston and Bosh.

The United States is trying to resolve the standoff by proposing the release of around $50 billion in financing for Ukraine through loans or bonds that would be secured by future profits from frozen assets, Singh told the FT.
G7 leaders are expected to discuss the frozen Russian assets at their summit in Italy in June.

“Confiscation of sanctioned Russian state assets should be a last resort,” wrote Creon Butler, Director of Chatham House’s Global Economy and Finance Program, in a commentary this week.

It is not certain that the benefits of confiscating frozen Russian assets for the G7 will outweigh the costs it will incur, Butler said, adding that “financing support for Ukraine through normal government spending, at least for the time being, is probably the ‘best option’.