The administration of US President Joe Biden has supported a bill that would allow the confiscation of Russia’s frozen assets worth about $300 billion to be used to rebuild Ukraine. This follows from a note by the US National Security Council (NSC) to Congress, where the initiative was prepared, Bloomberg writes with reference to the document.
“The draft law will provide the executive branch with the powers necessary to seize Russian sovereign assets in favor of Ukraine,” the note says. A senior agency official confirmed the White House’s position.
Biden’s support for the move comes as Republicans in Congress are blocking more than $60 billion in aid to Ukraine, partly because of concerns that Washington is bearing too much of the financial burden, the newspaper notes.
According to the article, the White House is trying to balance this with concerns that such a move could damage the reputation of the US financial system and provoke a flight from the dollar.
The presidential administration also wants to coordinate this step with G7 allies, especially in Europe, where about $200 billion of Russia’s frozen assets are stored, and where there is less support for their seizure, especially unilaterally, the authors note.
The issue will be discussed at a meeting of G7 countries before the second anniversary of the beginning of the war in Ukraine.
Earlier, Washington instructed three working groups to study ways to confiscate Russian assets by February 24, 2024, the Financial Times reported. Canada, the United Kingdom, and Japan have joined this work. However, Germany, France, and Italy voiced their objections and called for a thorough examination of the legality of such a step.
According to the FT, various options are being considered: from direct confiscation and spending of Russia’s frozen assets to using the proceeds from them or using these funds as collateral for loans.
According to the European Commission, the G7 countries, the EU, and Australia froze €260 billion worth of securities assets in 2022, including cash and government bonds in euros, dollars, and other currencies. The vast majority of the assets blocked in the EU, amounting to about €191 billion, were frozen in the Belgian depository Euroclear. Another €19 billion was seized by France. The share of other countries is much smaller – for example, Germany has assets worth about EUR 210 million. At the same time, the United States has blocked assets worth only $5 billion, the FT reported.
- In October 2023, the EU and the US confirmed their intention to transfer to Ukraine the proceeds of frozen Russian assets.
- Using the profits from frozen Russian assets to help rebuild Ukraine could damage the euro’s reputation, the ECB said.
