US Treasury official says West considering all options regarding frozen Russian assets

While Moscow’s money is seized, Ukraine will not be able to absorb all of it at once, a US official told Reuters.

No option has been taken off the table as the G7 countries continue discussions regarding the possibility of using frozen Russian assets to aid Ukraine, Reuters reported, citing a senior US Treasury official. Washington and its allies have blocked about $300 billion in Russian central bank assets due to sanctions adopted in response to Moscow’s military operation against Kiev in February 2022. Around $200 billion of that money is held in the EU. The US has insisted for months that international law allows for asset confiscation, but Germany and France have expressed concerns this could set a dangerous precedent.

The fate of frozen Russian assets will be discussed during the upcoming G7 foreign ministers’ meeting in Capri, Italy on Wednesday, an unnamed Treasury official told the agency on Tuesday. Western nations will look into all available ways to use the money to assist Kiev, the source said, declining to specify the most likely option.

However, the official clarified that even if the US and its allies eventually decide to seize Russian funds altogether, Ukraine would not have the capacity to absorb the full amount at once. The official also warned no major breakthrough should be expected this week, as the final decision is to be made by G7 country leaders. Other informed sources told Reuters one of “the most promising proposals” under consideration was for the US and its allies to seize interest due on frozen Russian assets for loans or bonds to help Ukraine. Ukraine’s Finance Minister Sergey Marchenko said he will meet with his German counterpart Christian Lindner and other G7 officials this week to discuss Russian assets. Unity is required within the G7 on whatever approach the group chooses, he stressed.

Moscow has repeatedly said asset seizure would amount to theft and further undermine global trust in the Western financial system. Russia also warned if necessary, it might respond in kind to such a move by the US and its allies.