G7 ministers to release roadmap for using frozen Russian assets

Washington and its allies will discuss “potential schemes” to get the money to Kiev, Bloomberg reported

Finance ministers from the G7 economies will release a joint communique on Saturday expressing their support for using the revenue generated by roughly $300 billion in frozen Russian assets to aid Ukraine, Bloomberg reported on Friday.

The finance ministers of Canada, France, Germany, Italy, Japan, the UK, and the US will discuss Ukraine at a meeting on Saturday in the Italian town of Stresa, ahead of a summit of G7 leaders in June.

In the runup to the meeting, the US has been pressing its European allies to use future profits from immobilized Russian funds as a guarantee for a multibillion-dollar loan to Kiev. While Washington initially advocated the outright seizure of this money, the Europeans objected, citing legal issues and potential damage to the West’s financial credibility.

According to a draft communique seen by Bloomberg, the finance chiefs will state that they are “discussing potential schemes to bring forward the extraordinary revenues stemming from immobilized Russian sovereign assets to the benefit of Ukraine.”

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“We reaffirm that, consistent with our respective legal systems, Russia’s sovereign assets in our jurisdictions will remain immobilized until Russia pays for the damage it has caused to Ukraine,” the document adds.

The US and EU have blocked an estimated $300 billion in assets belonging to the Russian central bank since the start of the Ukraine conflict in February 2022. American banks are sitting on around $6 billion of this sum, with the rest held in Europe, according to media reports.

US Treasury Secretary Janet Yellen has said these assets could guarantee a loan of up to $50 billion for Kiev. 

However, multiple officials told Reuters that the European ministers remain unconvinced of the legality of such a move. Yellen too conceded that no concrete decision would be reached on Saturday, telling reporters on Thursday that she expected the communique to include a “general agreement on the concept” rather than any precise figures.

Russia has repeatedly warned that seizure of its assets would amount to theft and trigger a retaliation. Russian President Vladimir Putin signed a decree on Thursday that would allow any damages caused by the US plan to be offset by American-owned property in Russia. The Russian government and central bank would be empowered to seek redress for such losses through a Russian court.