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G7 ministers did not agree on the use of frozen Russian assets

Apr 18, 2024

The finance ministers of the Group of Seven countries at a meeting in Washington failed to agree on ways to use frozen Russian assets to support Ukraine. They will continue to work on possible options to present to G7 leaders before the summit in Italy in June.

This was reported by Reuters.

After the inconclusive debate, the G7 ministers said: " We reaffirm our determination to ensure that Russia pays for the damage it has caused to Ukraine. Russia’s sovereign assets in our jurisdictions will remain immobilized until then, consistent with our respective legal systems".

"We will continue to work on all possible ways in which frozen Russian sovereign assets can be used to support Ukraine in accordance with international law and our respective legal systems, with a view to informing our leaders before the Puglia summit in June," the statement said.

The FT explains that Washington has supported the idea of fully confiscating 260 billion euros in assets and transferring them to Ukraine. However, European officials fear that this could violate international law and destabilize financial markets.

Speaking before a meeting of G7 finance ministers, European Central Bank President Christine Lagarde said that the US proposals are causing serious concern among lawyers, including those in the US administration.

"The move from freezing assets to confiscating them and disposing of them is something that needs to be looked at very carefully," Lagarde said, warning that it could lead to "a violation of the international order that you want to protect and that you expect Russia to respect".

For now, the EU countries propose to give Kyiv only the profits earned from the underlying assets. But now Ukraine needs more money, as additional US aid is delayed in Congress.

"We are discussing several different options. One of them is confiscation, and the other is pledging or even using windfall profits or interest from these assets to finance the loan," said US Treasury Secretary Wally Adeyemo.

French Finance Minister Bruno Le Maire said that the interest on Russian assets is estimated at 3 to 5 billion euros a year, depending on the level of interest rates.

Author – Anastasiya Glotova, 18/04/2024

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