Russia has responded sharply to the threat that Russian assets in the West may be frozen, seized, and possibly sent to Ukraine. Taking to Telegram, Russian Foreign Ministry spokeswoman Maria Zakharova promised a “severe response” that could result in what she called “tit-for-tat” measures. Zakharova also made it clear that Moscow would not give up territories from Ukraine in return for the seized assets
“Our motherland is not for sale,” Zakharova wrote on the Telegram messaging app.
“All Russian assets must remain untouched because otherwise there will be a severe response to Western thievery. Many in the West have already understood this. Alas, not everyone.”
Zakharova’s response comes after President Biden recently signed into law a $95 billion bill which included aid to Ukraine, Israel, Taiwan, and other areas. Along with this aid is the question of $300 billion of now blocked Russian holdings in both Europe and the US. Though most of these holdings are in Europe, the US could pave the way by using the Rebuilding Economic Prosperity and Opportunity for Ukrainians Act (REPO) act which was passed along with the bill. Currently, the US has only $5 billion of Russian holdings but seizing, freezing and sending this $5 billion to Ukraine could pave the way for Europe to follow suit.
The move is not without complications, the first of them is retaliation. Kremlin spokesman Dmitry Peskov said in a separate comment that there was still a lot of Western money in Russia that could be targeted. “The prospects for legal challenges (against the confiscation of Russian assets) will be wide open,” he said. “Russia will take advantage of those and will endlessly defend its interests.”
The other problem is the legal ramifications. Christian Lagarde, president of the European Central Bank, believes that seizing a foreign country’s assets is fraught with legal risks. According to a report in the Financial Times, Lagarde, who was speaking at an event in Washington earlier in the month, stated that many people, some within the US administration itself, who were unhappy with the proposals, as it could violate the “legal international order.”
“I have seen four different schemes or proposals to circumvent what many other jurists or lawyers — including in some administrations in this country — regard as a very serious legal obstacle that can be construed as a violation of the legal international order.”
The US which is in favour of seizing all the $300 billion Russian assets and sending them to Kyiv, says it will wait till the G7 meeting in Italy in June to discuss the issue.
Critics of the US’s move say the action will harm Washington’s interests. Moscow has already made it clear that should the US or Europe move in this direction, the economic well being of their citizens living in Russia are at risk with private assets likely to be seized. The other problem is that seizing Russian assets may have knock-on-effect with other countries pulling out their assets from the US. China is the biggest holder of US treasuries.
(With inputs from Reuters & other agencies)
