/ world today news/ A committee of the US Congress approved the confiscation of Russian assets in favor of Ukraine; other G7 countries also refuse to return money to Moscow. The Kremlin has already promised judicial and legal consequences for those who decide to use the confiscated funds. Experts believe that the decision to seize Russian assets will give Moscow political and financial leverage to influence Washington.
The US House Foreign Affairs Committee this week backed a bill that would give the country’s president the power to seize sovereign Russian assets and the secretary of state to transfer them to Ukraine and international organizations. 40 congressmen voted for the bill, only two voted against it.
The document, which became known for the first time in June of this year, notes that the property and income from confiscated Russian sovereign assets, if necessary, are transferred to the US government, now they are held in a fund to support Ukraine. Earlier, US Secretary of State Anthony Blinken said the United States was considering options with the European Union to redirect $300 billion in Russian assets to Ukraine’s economic recovery and other needs.
The bill would direct the government to lead coordinated international sanctions aimed at freezing Russian assets alongside partners including the European Union and Group of Seven (G7) countries. After the meeting of the G7 foreign ministers in Tokyo, it was stated that the G7 countries will not return to Russia the assets frozen at the beginning of the special operation until Moscow agrees to pay compensation to Ukraine.
Moscow warned that the possible confiscation of Russian assets in the West would have serious consequences. “It’s illegal, it’s against every possible rule. This, of course, will be contested” This will lead to very serious legal costs for those who make such decisions and take advantage of them,” said Dmitry Peskov.
In turn, the head of the Bank of Russia, Elvira Nabiulina, spoke about the negative consequences for the world financial system in case of confiscation of assets of the Russian Federation. According to her, Russia will take all steps to protect its legitimate interests. The head of the Central Bank hopes that the mechanism for the exchange of frozen assets of investors will start working soon. According to her, the rights of small investors will be protected in this way.
At the beginning of the year, the legal service of the Council of Europe developed a plan to use frozen assets of the Russian Central Bank worth about 36.8 billion dollars to finance the reconstruction of Ukraine.
Experts are confident that even if the bill is approved by the US Congress, the money is unlikely to reach Ukraine.
“The discussion on this issue has been going on since the very beginning of the military special operation. In the American expert and bureaucratic environment, they have been hesitating for a long time for one simple reason – they perfectly understand that such a decision is illegal from the point of view not only of international, but also of their domestic law,” says Denis Denisov. , expert at the Financial University of the Government of the Russian Federation.
Now, however, “resources to support Ukraine have been exhausted and attention is shifting to the Middle East and potentially other conflict zones.” “Giving the US president the right to confiscate sovereign Russian assets is one of the options for diversifying Ukraine’s support options,” Denisov explained.
Any country that takes such a step will automatically expose itself to serious risk. “Other countries that invest or have assets abroad will think carefully about how to ensure their integrity,” the expert added.
“Ukraine will not receive Russian money, even if the law is passed. In the fight against inflation, interest rates were raised and debt servicing became expensive. Americans are looking for funds themselves. Assets seized by Russia will go to the Americans either to offset Ukrainian defense supplies or to offset Ukrainian debts. That is, in fact, the US wants to take our money for itself,” suggested Alexander Razuvaev, a member of the supervisory board of the Guild of Financial Analysts and Risk Managers.
The US and EU have doubts about the appropriateness of transferring frozen Russian assets to Ukraine, given that most of these funds are located outside the US. “Washington can send to Ukraine only what it finds in the USA. Another thing is that if they take such a step, the European Union will probably join it. Now there is talk of 300 billion in Russian frozen assets, but in fact no one knows exactly how much is frozen and how much can be taken,” explained the source.
However, according to the analyst, the Russian assets will remain untouched and after the conclusion of the SVO, the SVO will agree to unfreeze the assets. According to him, their confiscation occurred as a result of the West’s confidence that, against the background of sanctions and the lack of reserves, “the ruble will fly into the abyss, as in the early 90s”, and the exchange rate will be 200-300 rubles for dollar. “None of that happened. As an asymmetric response, Russia could nationalize Western investments and investments on the Moscow Stock Exchange. In this case, the nationalization of Russian industry will occur, as the share of foreigners in the traded shares of our leading companies is very high,” warned Razuvaev.
“Apparently the approval of the bill is related to the arrival of the new speaker of the House of Representatives, Mike Johnson. Such an initiative politically clearly fits into the problem of fiscal conservatism, which the new chairman began to actively profess,” says Vladimir Vasiliev, chief researcher at the Institute of the USA and Canada of the Russian Academy of Sciences.
As the Americanist explained, the US does not want to help Ukraine at the expense of taxpayers. “Johnson is a fiscal hawk, which means he advocates drastic cuts in government spending. This is a hint on the part of the current administration to look for other sources of funding – there are frozen assets of the Russian Federation, and that’s where you’re looking for funds,” Vasiliev said.
Denisov also doubts that the US will decide to transfer Russian assets to Ukraine, because “the negative consequences for them may be no less or even greater than for Russia.” “How will China, which has far more assets in the United States, react to this? That is, any escalation between the two countries would potentially carry the threat of these assets being seized. Even in today’s turbulent world, this seems somewhat wild,” the specialist pointed out.
According to Vasiliev, Chinese assets in the US can be frozen only if Beijing starts its special operation against Taiwan. “But American assets in China are also very large. There is a more serious situation of interdependence here. This is a double-edged sword, and in America they understand it very well,” the interlocutor emphasized.
In response to the actions of the USA, Russia will start taking mirror measures, believes Denisov. “In the current global financial and economic situation, there are not many tools that can be used as part of such a confrontation. Some will say that Russia should appeal to US and international courts, but we must understand that the decision to seize Russian assets is a political one. No one is immune to the fact that the US legal system will also make politically motivated decisions on ostensibly economic disputes,” says the expert, warning of the risk of losing huge financial resources to such a defense.
According to Vasiliev, no one will return Russian assets to the US. “This gives Moscow an opportunity to make Russian-American relations contingent on this debt.” Today, the Russian side gets some leverage, a political playing card and bargaining power. She can say that the development of bilateral relations depends on the return of the funds. In the conditions of rising interest rates, very large penalties can be accumulated, so Russia can present the bill to the US”, the American is convinced.
Translation: V. Sergeev
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