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Finance ministers of the Group of Seven (G7) countries on Thursday issued a communique saying that Russia will not gain access to its international assets frozen in 2022 (the amount of which EU authorities estimate at $300 billion) until “Ukraine will receive compensation for the damage suffered.”
International reserves of the Russian Federation are highly liquid foreign assets available to the Bank of Russia and the Russian government. They consist of foreign currency funds, special drawing rights, reserve position in the IMF and monetary gold. According to the Bank of Russia, as of October 6, 2023, their total amount was $562.8 billion.
The G7’s decision can be called interim, since US Secretary of State Antony Blinken previously stated that Western countries are looking for legal grounds to simply transfer the frozen assets of the Russian Federation to Kyiv.
At the same time, Estonia may soon become the first EU country to approve a plan for using frozen Russian assets. Her government, at a meeting on Thursday, approved and sent to parliament for approval an amendment to the law on international sanctions, which provides, among other things, for internal rules for the use of the assets of persons under sanctions “to compensate for the damage caused to Ukraine.”
Estonian Foreign Minister Margus Tsahkna explained that, according to the bill, Russian assets blocked by Tallinn (the amount of which is only 38 million euros) will remain frozen until “until the damage from military actions is compensated.” “To apply this mechanism, an international agreement with Ukraine or an international compensation mechanism is necessary,” he is quoted as saying.Interfax».
In turn, Estonian Prime Minister Kaja Kallas addressed Brussels with the wish that the European Union also “complete the work on using Russian frozen assets and developing practical solutions as quickly as possible.”
The architecture of currency trading is changing. Although even the State Duma admitted that the Central Bank works professionally, rising prices and the weakening of the ruble will remain the main problems for the economy for a long time.
It is worth noting that if previously Europeans tried to avoid the term “confiscation” as much as possible, now it is heard more and more often. For example, Estonia’s neighbor Finland is ready to go even further – even to the extent of confiscating real estate and other property from those Russian citizens who have problems paying bills and taxes or “don’t get in touch.” The Yle TV and radio channel reported this with reference to the Minister of Justice of Finland, Lina Meri.
As you know, Finland has already tightened entry restrictions for Russian citizens who own real estate in the country, while the accounts of Russians in Finnish banks are partially closed, and on September 16, the Finnish authorities joined the decision of the EU countries bordering Russia to ban the entry into their territory of cars with Russian numbers.
Moscow views Finland’s plans to develop mechanisms for confiscating real estate from Russian citizens as another intention to infringe on their rights. “At first there was a total restriction of travel, then a ban on the import of cars with Russian license plates with threats of confiscation of cars already in Finland, and a cessation of payments for financial instruments. Now things are heading towards complete absurdity. The Finns are inventing more and more new sanctions, and then they are “surprised” that Russians cannot transfer money to Finland or come to the country to ensure the proper maintenance of their real estate,” it says. statement official representative of the Russian Foreign Ministry Maria Zakharova.
Another high-profile “sanctions” news on Thursday was the decision of the US authorities to punish two foreign companies for violating restrictions on the sale of Russian oil. The US Department of the Treasury’s Office of Foreign Assets Control (OFAC) has added Lumber Marine from the UAE and Ice Pearl Navigation from Turkey to the SDN sanctions list. The sanctions imply a property freeze – the blocking of two tankers that transported Russian crude oil, the cost was above the price ceiling.
Let us recall that on December 5, 2022, an embargo on the supply of Russian oil by sea to the European Union came into force. At the same time, the EU, G7 countries and Australia introduced a regulated price ceiling for Russian oil supplied by sea at $60 per barrel, and also prohibited their companies from providing transport, financial and insurance services to tankers transporting oil from Russia at a price above the agreed level.
Life after 100 per dollar: forget or not be afraid While the Kremlin calls excessive attention to exchange rates a vestige of the past, the Bank of Russia makes it clear that it will act tough for at least another two years.
Following this, Russian President Vladimir Putin signed a decree on retaliatory measures, banning the supply of Russian oil and petroleum products to any foreign legal entities and individuals who agree to directly or indirectly use the maximum price fixing mechanism.
OFAC found that tankers owned by Emirati and Turkish shipowners were carrying oil prices above $75 and above $80 per barrel, respectively. An OFAC press release notes that both vessels that called at Russian ports used American service providers when transporting oil of Russian origin, which became the basis for imposing sanctions on these two companies.
This is a new turn in that part of the sanctions policy, which is aimed at limiting the income Russia receives from energy exports. As Rosbalt noted earlier, at first suppliers learned to bypass the imposed restrictions, and when the Russian Urals brand broke through the price ceiling, the United States de facto put the brakes on all initiatives to “fix” this sanction instrument, put forward, in particular, by some of the most anti-Russian countries of the European Union .
At the end of July, Reuters wrote that Washington decided not to resort to tough measures to comply with the price ceiling. The US Treasury Department’s idea was “to be gentle, not to hit the tanker owners with a hammer, but to quietly force them through letters and phone calls,” an agency source familiar with the discussion of the problem in the White House explained this position at the time.
It is quite possible that the United States has decided to grab the hammer after the International Energy Agency report that Russia in September managed to increase oil export revenues to the highest level since July 2022.
Mikhail Makarov
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2023-10-12 20:59:00
