The U.S. has proposed that G7 working groups explore ways to seize $300 billion in frozen Russian assets, as allies rush to agree on a plan for the second anniversary of rf's full-scale invasion of Ukraine, the Financial Times reports, UNN writes.
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"While no decisions have been made and the issue continues to be hotly debated in European capitals, the acceleration of work to confiscate moscow's assets for Ukraine underscores its growing importance to the West," the publication writes.
The sources said the topic was discussed this month by both G7 finance ministers and their deputies, in which they talked about how to develop such a policy and assess the risks involved.
The U.S., backed by Britain, Japan and Canada, has offered to continue preparatory work to prepare options for a potential meeting of G7 leaders around Feb. 24, the publication noted.
The three working groups proposed by Washington will reportedly consider the legal issues associated with confiscation; a method for applying such a policy and mitigating risks; and options on how best to channel support to Ukraine.
Germany, France, Italy, and the EU were quoted as expressing some reservations and stating that the legality of Moscow's asset forfeiture should be carefully assessed before decisions are made. According to reports from the meeting, several European ministers also emphasized the need to maintain a high level of secrecy during the proceedings.
Options being explored in Western capitals range from outright confiscation and spending of Russian central bank assets to using the proceeds from frozen assets or using them as collateral for loans.
The EU has yet to seize Russian assets itself, instead exploring ways to seize profits from financial institutions such as Euroclear, which holds 191 billion euros worth of sovereign assets.
The U.S. privately circulated a G7 discussion paper this year suggesting that confiscation of Moscow's frozen assets would be legal as "a countermeasure to encourage Russia to stop its aggression," the publication notes.
But Europe, where most of the assets are located, is much more cautious, fearing possible repercussions for financial stability as well as retaliation from russia.
Italy, which will chair the G7 in 2024, is among those concerned about a possible crackdown on its companies operating in russia, which moscow has already threatened to do. russia has also warned it would cut diplomatic relations with the U.S. in response to any asset confiscation.
The EU, UK and France have also emphasized that the money will not be readily available or sufficient to cover Ukraine's reconstruction needs, and that asset forfeiture should not come at the expense of financial support for Ukraine in 2024. Some ministers are concerned that the debate over asset confiscation will mean that there is an alternative to traditional funding packages for Ukraine, which have stalled due to opposition in the U.S. Congress and Hungary's refusal to support the EU agreement.
But the drive to seize Russian sovereign assets reflects a general desire to show Muscovy that it cannot survive the West's determination to help Ukraine, both economically and militarily.
Over the past two years, the G7 has managed several times to overcome disagreements among its members on economic measures against Russia, including on the initial comprehensive package of sanctions and on setting a ceiling on Russian oil prices, the newspaper said.