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5 Feb, 2024 15:47

Kremlin warns West against ‘deeply illegal’ asset seizure

The fallout from any theft of Russian funds would last for decades, spokesman Dmitry Peskov has said
Kremlin warns West against ‘deeply illegal’ asset seizure

Anyone who seizes Russian assets will face long-lasting consequences, Kremlin spokesman Dmitry Peskov warned on Monday. His comments came after the Financial Times reported that G7 nations are considering using frozen Russian funds as collateral to finance Ukraine. 

In an article published on Saturday, the newspaper claimed the Belgian government has proposed a plan under which Western governments would raise debt to finance the Ukrainian government, and then demand that Russia repay that debt. If Moscow failed to do so, the G7 would then seize frozen Russian assets being held in Europe and the US. 

The plan is seen as a way to circumvent the legal issue of confiscating Russian assets, a person with knowledge of the negotiations told the outlet. The idea is reportedly now the “leading option” to unlock frozen Russian funds and send them to Ukraine. However, none of the countries in question has officially confirmed any such plans.    

Commenting on the reported proposal, Peskov said it would be “deeply illegal” and stressed that Russia will defend its interests. 

“There will be very, very long – for many decades – judicial prospects both for those who make these decisions and for those who implement them,” the spokesman warned. “Encroachment on someone else’s property undermines the foundations of the entire economic system,” Peskov added.  

At the same time, the presidential spokesperson insisted on waiting for official statements on the FT’s claims, noting that “even the most serious publications, unfortunately, make many mistakes.” 

Shortly after Moscow launched its military operation against Ukraine, the US and its allies froze an estimated $300 billion of Russian central bank assets, most of which are being held in Europe. Since then, Kiev and its Western allies have floated the idea of seizing the assets and using them to fund the Ukrainian government. 

However, financial experts have warned that any such move could seriously damage the reputation of Western economic institutions and the euro’s standing as a global reserve currency, and would drive away foreign investors. 

Nevertheless, Brussels announced last week that EU member states had reached an agreement to transfer the income generated by Russia’s funds to Kiev without touching the assets themselves. 

Moscow, meanwhile, has repeatedly warned that any actions related to its assets by the US and its allies would amount to “theft” and would violate international law. The Kremlin has also cautioned that any seizures would trigger a tit-for-tat response from Russia.