The White House is struggling to persuade even its closest allies to support a plan to seize Russian assets. Members of NATO hold hundreds of billions of dollars in frozen Russian funds, with the Biden administration arguing they should be sold off to arm or rebuild Ukraine.
The Financial Times reports Washington’s plan to seize Moscow’s assets was a topic of concern at the summit of the Group of 20 (G20) finance ministers in Brazil earlier this year. After Russia invaded Ukraine in 2022, the US and its allies in the Group of 7 (G7) and NATO froze $300 billion in Russian assets.
As the war has dragged on into its third year, the White House has strained to continue funding Kiev’s war machine. Part of Washington’s solution is to begin seizing those frozen Russian assets to fund the proxy conflict, an unprecedented move.
While the US and Canada support the plan, other allies – Japan, France, Germany, Italy, and the European Union – are skeptical. The divide in the G7 has become a stalemate, but the Biden administration does not plan to act alone. “We immobilized the assets together; we would like to mobilize them together as well,” White House deputy national security adviser Daleep Singh explained.
The Europeans feel Washington is only willing to take such a hardline approach because the US only holds a small amount of the frozen Russian assets, about $5 billion. “They have little skin in the game,” an unnamed European diplomat told FT.
G7 officials also expressed concern that seizing the assets would violate international law, open their nations up to reparation demands from former colonies, and cause some countries, such as Saudi Arabia, to pull their own sovereign assets from Western financial institutions.
Some members of the G7 argued that the seizure of the Russian funds was no longer on the table, and said they were exploring other methods of using those assets to benefit Ukraine. One proposal calls for using profits generated by the frozen assets to arm Ukraine, estimated at $3 billion per year.
That plan is also likely a violation of international law, and Moscow is sure to seek to reclaim those funds in the future. “If there is ever a peace negotiation and Ukraine decides to participate, there might be a situation where Russia demands its frozen assets back and in exchange agrees to make territorial concessions to Ukraine,” a German official said. “You can’t do that if you’ve already mortgaged those assets.”
However, US officials say that Kiev badly needs the funds. Singh argued that the “risk that Ukraine is not sufficiently funded and one of the most egregious violations of international law in recent history occurs with impunity.”
Besides US allies, a number of other countries have voiced concerns about the potential asset seizure, with representatives from China, Saudi Arabia, and Indonesia all expressing their opposition to the Biden administration’s plan.
