The US Considers handing over static Russian assets to Ukraine

The United States is considering an unprecedented move in which Ukraine could hand over assets from a frozen Russian state, offering Moscow a streamlined way to contribute to the war-torn country’s reconstruction.

What was considered a far-fetched idea two years ago, that frozen Russian assets could be used to finance Ukraine’s post-war reconstruction, is moving closer to becoming a reality, potentially setting a historic precedent in international law. According to the prestigious American magazine foreign policy.

There are financial institutions in the United States and Europe About $300 billion in Russian state assets that were frozen at the start of the conflict with Ukraine. If these assets were seized, they could contribute significantly to avoiding reconstruction costs, estimated at more than $400 billion according to the World Bank.

Although US Treasury Secretary Janet Yellen dismissed the idea of ​​seizing Russian assets as “illegal” at the start of the war, it has gained momentum recently. This situation is due to Russia’s continued attacks on Ukraine’s civilian infrastructure and growing concerns about the future of Western aid to Kiev.

The United States Senate last week approved legislation that would authorize the seizure of these fundsEndorsed by the Biden administration after a thorough analysis of its legal implications.

Likewise, Canada already has similar legislation and the European Union has accepted in principle the idea of ​​confiscating at least interest on frozen Russian assets to finance the reconstruction of Ukraine. The G-7 will continue to discuss the use of the funds at a meeting next month, and a group of leading foreign policy figures advocated for the move.

Although this measure would be unprecedented and would pose a number of legal and economic challenges, some international law experts argue that it would set a positive precedent for similar situations in the future, while failure to do so would limit future efforts.

For their part, Russian authorities are already preparing for a possible asset seizure, threatening legal action in the courts of Europe and the United States. Putin already signed a decree in December to seize Russian assets from European companies such as Danish brewer Carlsberg and French yogurt maker Danone, and the Kremlin has warned it has a list of Western assets that could be seized in retaliation.

However, confiscation of assets is not yet a fact. Although the United States owns a small portion of fixed Russian assets, most are located in Europe, where there are Reluctance for fear of retaliation from Russia. Proponents of the measure believe it would be more effective if carried out collectively. Moreover, this debate over the confiscation of frozen Russian assets mirrors the decisions made by Western countries during the war, including the supply of arms to Ukraine.

Although doubts remain about the legality of asset confiscation, The United States already has the right to seize state funds under certain circumstances, And new legislation in Congress seeks to clarify and clarify the use of this power to rebuild Ukraine.

Proponents of the measure argue that Russia has forfeited its sovereign immunity by committing war crimes and violating international law. However, critics point out that the move could undermine confidence in Western currencies and trigger retaliation from Russia and its allies.

foreign policy warns that, as the war between Russia and Ukraine enters its third year, Moscow’s actions are not only reshaping borders and battlefronts, but may also have significant implications for international law.

On the other hand, European Union (EU) countries reached a political agreement on Monday Extraordinary profits generated by frozen Russian assets in European entitiesBecause of the sanctions imposed on Russia for invading its neighbor.

The current Belgian Presidency of the Council of the EU has reported the agreement between the ambassadors of the Community in its X account. According to community sources, the President presented his latest proposal on the measure to the countries and none of them observed much. They added that The agreement will be ratified in the EU Council through written process in the shortest possible time.

The supported proposal focuses on agreeing on the use of benefits generated by fixed Russian assets but does not, for the moment, enter into them. How they will be transferred to Ukraine, an aspect that will be addressed laterSources pointed out.

The European Union has about 200,000 million euros in Russian central bank reserves and close to 30,000 million in private assets frozen by sanctions against Moscow, mostly in securities depository financial institutions in Belgium. Euroclear.

These depositories are not transferable approved Their assets generate coupon or amortization payments, which generate an accumulation of cash on their balance sheet that they have to reinvest to comply with risk management norms, bringing them interest benefits.

In December, the European Commission presented the Motion that twenty-seven should be unanimously accepted In the long run, to be able to use the “exceptional benefits” generated by the assets of the Central Bank of Russia, in the reconstruction of Ukraine, because, according to the organization’s sources, they would not exist without them. Stabilization of assets as determined by the EU.

To this end, the Community proposal forces central securities depositories to manage and record these revenues separately and prohibits the distribution of the net profits they generate, so that they remain in the entity and can be used in the future.

(with information from EFE)