G7 divided over how to handle Russia's $300 billion

The US wants to seize Russia's overseas assets, while France says there is not enough legal basis to do so.

After Russia launched a military campaign in Ukraine in February 2022, the West imposed a series of sanctions on the Russian economy and froze about $300 billion in foreign exchange reserves and assets of the country's tycoons. The EU had planned to seize the frozen Russian assets and find a legal solution to use the money to support Ukraine, but so far the parties have disagreed.

On February 28, before a meeting of G7 financial officials in Sao Paulo (Brazil), US Treasury Secretary Janet Yellen said that finding ways to profit from the $300 billion of Russian assets frozen abroad is "appropriate legally, economically and morally".

Yellen said the West could seize them or use them as collateral. She added that Ukraine urgently needed assistance as the war entered its third year.

However, at the meeting that followed, French Finance Minister Bruno Le Maire rejected this view. He said France did not see enough international legal basis to do so and the G7 needed to consider it further.

Le Maire said similar moves would need to comply with international law and have the support of G20 members - including Russia, China and countries that are not US allies. Yesterday's meeting took place on the sidelines of a meeting of G20 finance ministers.

French Finance Minister Bruno Le Maire at the G20 finance leaders meeting on February 28. Photo: Reuters — French Finance Minister Bruno Le Maire at the G20 finance leaders meeting on February 28. Photo: *Reuters*

For more than a year, G7 officials have been unable to agree on what to do with these Russian assets. The debate on February 28 showed that the possibility of consensus is still far from being reached.

"We are discussing to aim for a common goal, while still complying with international law," Japanese Deputy Finance Minister Masato Kanda told reporters after the meeting.

However, Le Maire said the European Union's (EU) proposal on February 28 to use the profits generated from the assets was an important step forward. German Finance Minister Christian Lindner called it a "practical and legal step that can be implemented quickly".

Kanda also said that using the profits from Russian assets would likely be approved by the G7 and the international community. Canada agreed that it was necessary to speed up the seizure of Russian assets to help Ukraine. Russia has so far threatened to retaliate if the West continues with this intention.

Reuters , citing sources familiar with the matter, said G7 officials agreed that Russia should pay for the damage it caused. A growing number of experts believe there are legal ways to seize the assets.

The issue has become increasingly important as the US government’s proposal to provide an additional $61 billion in aid to Ukraine was rejected by the House of Representatives. Experts say it will take the West a year or more to unlock the value of these assets, as countries holding Russian assets will have to pass domestic legislation to do so.

Ha Thu (according to Reuters)

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