The US convinces the G7 to support the transfer of profits from frozen Russian assets to Ukraine
US Treasury Secretary Janet Yellen plans to urge her G7 colleagues to approve the use of interest from frozen Russian assets to provide emergency aid to Ukraine.
He writes about it Reuters citing a senior US Treasury official.
Key points:
- The G7 countries are close to an agreement on the use of part of the $300 billion in frozen Russian assets.
- Yellen proposes to use interest from these assets to secure bonds or loans to Ukraine in the amount of up to $50 billion.
- The plan is an alternative to full asset forfeiture, which has raised concerns in Europe.
- European countries prefer a more conservative approach, distributing profits (about $3.5 billion per year) to a fund for Ukraine.
- Yellen’s plan is causing some controversy because it would require Western nations to hold assets for about 20 years.
- The G7 countries abandoned the idea of confiscating Russian assets, looking for more realistic alternatives.
- Belgium’s plan to create a special company that will issue debt obligations on behalf of Russia against its frozen assets is being considered.
Formerly the Financial Times reported that the G7 countries have abandoned the idea of direct confiscation of frozen Russian assets, despite long discussions on this matter. The Parliament of Estonia allowed the use of frozen assets of the Russian Federation for the benefit of Ukraine
European countries avoid direct confiscation of assets due to fears of possible negative consequences. According to the new G7 plan, a special company will be created to issue debt obligations on behalf of Russia against its frozen assets. The pledge will be used only in case of non-fulfillment of debt obligations.
