The fate of Russia's $300 billion frozen assets.

The headquarters of the Central Bank of Russia in Moscow (Photo: CBR).

The European Union (EU) is seeking to legalize the exploitation of profits from those funds, but Moscow warns that any such move would constitute theft.

Russian officials have repeatedly stated that the seizure of state and private assets goes against all principles of a free market. Russian Finance Minister Anton Siluanov warned of "a completely symmetrical response," noting that there are "enough assets" in "Type C" accounts, specialized bank accounts denominated in rubles.

Minister Siluanov added that all those assets were frozen, "the amount of money was not small," and the revenue generated from their use was substantial.

Kremlin spokesman Dmitry Peskov also echoed Minister Siluanov, who has strongly stated that Russia will challenge any seizures in court.

He went on to assert that the seizure of Russian assets by Western countries would be "illegal" and "extremely dangerous" for the global financial system and the world economy , adding that any such move would be considered theft. "If something of ours is seized, we will consider what is being seized and respond immediately," the Kremlin spokesman warned.

According to official estimates, Russia's central bank reserves fell by 8.4% in 2022 after assets were frozen in G7 countries, the EU, and Australia.

Currently, approximately €210 billion ($232 billion) of Russia's foreign exchange reserves are believed to be held in the EU, including €191 billion in Belgium, €19 billion in France, and another €7.8 billion believed to be in Switzerland, a non-EU member state. The EU aims to raise €15 billion for Ukraine from proceeds of frozen Russian assets, subject to unanimous approval from all member states. Meanwhile, the US is believed to have frozen around $5 billion in Russian state assets.

In July 2023, Euroclear, the EU's largest clearinghouse based in Belgium, revealed that of the €2.28 billion it earned in the first half of 2023, it had accumulated over €1.7 billion in profits from frozen Russian assets. According to estimates, Euroclear holds €196.6 billion of Russian funds, the majority of which are held by the country's central bank.

Notably, approximately 5 million Russian private investors have had their assets frozen in accounts held by international financial institutions. The value of securities frozen in these private investors' portfolios amounted to $3.4 billion as of July 2022.

For months, Western nations have been considering how to seize this money and transfer it to Kyiv, despite numerous warnings that such measures could jeopardize the credibility of the Western financial and monetary system.

EU policymakers have discussed imposing an unexpected tax on profits generated from fixed-rate funds, estimated to generate around €3 billion in returns. Meanwhile, Reuters, citing sources, reports that G7 leaders are expected to discuss a plan to allow the seizure of frozen Russian assets when they meet in February 2024.

Several EU member states also oppose the idea of ​​using frozen Russian funds. According to a recent Financial Times report, countries including France, Germany, and Italy remain "extremely cautious" about the idea. Some EU officials "fear potential retaliation" if the Russian reserves are seized.

The European Central Bank (ECB) has previously warned against the use of Russia's frozen foreign exchange reserves, emphasizing that this could jeopardize the reputation of the euro.

Source: https://dantri.com.vn/the-gioi/so-phan-300-ty-usd-bi-phong-toa-cua-nga-20240102094526246.htm