G7 nations are stepping up their efforts to reach consensus on redirecting a portion of the $300 billion in "frozen" assets, primarily held by the Russian central bank and other sovereign entities, to Ukraine.
According to Financial times, this initiative gains significance as U.S. and EU support proposals face resistance.
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Some officials suggest that channeling these assets towards Ukraine could support its defence efforts, facilitate reconstruction, and encourage an end to the 21-month-old full-scale Russian invasion.
“G7 members and other specially affected states could seize Russian sovereign assets as a countermeasure to induce Russia to end its aggression,” the Financial Times quoted a U.S. discussion paper circulated in G7 committees as saying.
In recent weeks, as cited in the report, the United States has taken a firm stance during private discussions, emphasising the viability of asset confiscation "in accordance with international law."
An unnamed official, cited by FT, revealed Washington's belief in the soonest agreement on this matter, with potential discussions during an upcoming G7 leaders' meeting, dedicated to the second anniversary of the war.
The Central Bank of Russia holds approximately $300 billion in frozen assets in Western countries, primarily in Europe.
Countries in Europe, like Germany, France, and Belgium, have still been hesitant to take control of the assets. They're worried about legal issues, particularly the protection that international law offers to sovereign assets.
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Consequently, the EU has explored alternatives, considering reinvesting frozen funds to contribute to Ukraine's reconstruction.
Political discord within the EU and the U.S. has disrupted the allocation of tens of billions of dollars in aid to Ukraine. On Dec. 14, the European Union failed to reach an agreement on a $50 billion aid package for Ukraine, with Hungary exercising its veto.
In the U.S., a two-month-long debate persists over the proposed transfer of $60 billion to Ukraine. While the Biden administration supports the initiative, Congressional Republicans have withheld their support for the relevant bill.
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