US in talks with G7 over frozen Russian assets

The EU is already pursuing plans to transfer the interest accumulated on Moscow’s funds to Ukraine

The US is in discussions with other G7 nations on potential ways to seize frozen Russian sovereign funds, State Department spokesperson Matthew Miller has confirmed. His comments came shortly after the European Council enacted measures that could allow the interest earned by frozen Russian assets to be confiscated and sent to Ukraine.

The US and the EU have blocked an estimated $300 billion in assets belonging to the Russian central bank since the start of the Ukraine conflict in 2022. Of that amount, €196.6 billion ($211 billion) is being held by the Belgium-based clearing house Euroclear, which last year accumulated nearly €4.4 billion in interest on the funds.

While there have been calls to confiscate the money outright and hand it to Ukraine, skeptics have warned that this could erode global trust in the EU’s banking sector, as well as being dubious from a legal standpoint.

When asked to comment on the European Council’s decision during a press briefing on Monday, Miller said the US is “encouraged by any action the EU may take to use Russian assets for the benefit of Ukrainians.”

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“We continue to be in active conversations with our allies and partners, including the G7, on what additional steps may be possible within respective legal systems and under international law… to ensure Russia pays for the damage it has caused,” the US official added.

Earlier on Monday, the European Council ordered depositors holding frozen Russian assets to keep separate accounts of “extraordinary cash balances accumulating due to EU restrictive measures,” and prohibited them from disposing of any interest or profits from the funds.

“This decision paves the way for the Council to decide on a possible establishment of a financial contribution to the EU budget raised on these net profits to support Ukraine and its recovery and reconstruction at a later stage,” officials in Brussels explained.

Moscow has repeatedly denounced the freezing of its assets as illegal, warning of tit-for-tat responses and “decades” of lawsuits in the event that they are confiscated.

“[The EU’s] invention of openly fraudulent schemes for the seizure of income from Russian assets is dictated by the need to create the illusion of legitimacy over attacks on our property and thereby camouflage what is in fact an outright theft,” the Russian Foreign Ministry told RIA Novosti on Saturday.