The Kremlin has suggested that the use of Russian foreign reserves to finance the reconstruction of frozen Ukraine would be used as a “direct theft”.
Germany is hosting a meeting of G-7 finance ministers this week, and Berlin’s finance minister, Christian Lindner, has told four European news agencies that he is willing to consider seizing Russia’s central bank assets. But he warned that confiscating the assets of private citizens, such as Russian oligarchs, could be legally more complicated.
Ukrainian Foreign Minister Dmitry Kuleba said in a Facebook video posted over the weekend that the idea of relocating seized Russian assets to Kiev was gaining traction in the G-7, a gathering of economic powers.
“It’s literally hundreds of billions of euros,” he said.
Russia’s central bank’s reserves are a threat to the economy
Russia has accumulated reserves internally and in friendly countries since the annexation of Crimea in 2014, but its finance minister says Moscow has lost access to less than half of its nearly 40 640 billion foreign reserves. The ability to tap these funds was quickly cut off as part of an international sanctions program following the February 24 invasion of Ukraine.
Moscow’s inability to use foreign funds has created a challenge for its central bank, which has imposed capital controls to prevent a race against the Russian ruble. (It has recently relaxed some of the limits on foreign exchange movement.)
As Ukraine’s economy collapses as a result of the aggression, calls for the use of frozen Russian resources to help Kiev rebuild are growing. Last month, President Biden proposed to Washington to allow Russian oligarchs to liquidate their assets and donate money to Ukraine. The Biden administration is also considering how to legally use frozen Russian state funds in the United States to rebuild Ukraine, Secretary of State Anthony Blinken told lawmakers in April.
But the proposals have raised concerns among some international legal experts, who have warned that the administration could not properly fund Russia because the Kremlin has not attacked the United States directly. Proponents of her case have been working to make the actual transcript of this statement available online.
The United States has in the past allocated frozen foreign state resources, although it is uncommon for third parties to send funds for use. The Trump administration freezes Venezuela’s resources by providing an opposition figure whom Washington recognizes as the country’s legitimate leader, while the George W. Bush administration confiscates Iraqi funds to help rebuild there after the fall of Saddam Hussein’s regime. The Supreme Court has allowed victims of US terrorism to freeze state funds in Iran.
Most recently, Biden announced in February that he plans to allocate $ 3.5 billion to the frozen Afghan reserve fund for humanitarian and other assistance in Afghanistan. Another 3.5 billion will be reserved for the families of 9/11 victims who have legal claims against the Taliban.
Karen Dying and Annabel Chapman contributed to this report.