US steps up efforts to confiscate Russian assets in favour of Ukraine amid congressional blockade – NYT

US President Joe Biden's administration has stepped up efforts to confiscate about US£300 billion in sovereign Russian assets frozen in Western countries, attempting to counteract Congress's failure to allocate additional funds to help Ukraine. Source: The New York Times, as reported by European Pravda Details: Although the US had previously adamantly opposed any confiscation of the sovereign assets belonging to Russia's Central Bank, the White House has now become more active in discussing within the Group of Seven whether it can use its existing authority to utilise these funds or whether it must seek approval from Congress.

NYT's sources say the US is exerting pressure on the UK, France, Germany, Italy, Canada and Japan to have a strategy for using sovereign wealth assets ready by 24 February 2024, the second anniversary of Russia's full-scale invasion of Ukraine.

Biden himself has not yet fully endorsed this option, the newspaper reports. The New York Times' sources point to a range of issues that the G7 has yet to resolve. One is whether the confiscated assets will be sent directly to Ukraine or used for its benefit in other ways.

Another concern is whether these funds will be directed to Ukraine's recovery and budgetary support or directly to the war effort. Furthermore, since confiscating sovereign assets of such magnitude would be unprecedented, Moscow may retaliate, including through lawsuits and "mirror confiscation". The NYT noted that these debates have become even more urgent after the US Congress failed to approve additional funding for Ukraine by the end of this year.

Moreover, even if the funds are eventually approved, the White House needs an alternative source of funds for Kyiv to prevent similar situations. The article mentions that earlier, US officials considered the confiscation scenario to be a lever of influence on Russia to force it to sit down at the negotiating table with Ukraine and stop the war. Yet Moscow has not signalled any interest in such talks.

Background: On 12 December, the European Commission approved a legislative proposal to use the proceeds of frozen Russian assets to help Ukraine recover, which the European Council took note of on 14 December.

Learn more: Euroclear Will Help Us: Will Investment Income from Russian Assets in EU Become Compensation to Ukraine

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