G7 Ministers Set to Unveil Roadmap for Utilizing Frozen Russian Assets

Finance ministers from the G7 economies are set to release a joint communiqué on Saturday, expressing their support for using revenue generated from approximately $300 billion in frozen Russian assets to aid Ukraine, according to a Bloomberg report on Friday.

The finance ministers of Canada, France, Germany, Italy, Japan, the UK, and the US will convene in the Italian town of Stresa to discuss Ukraine, ahead of a G7 leaders’ summit in June.

In the lead-up to the meeting, the US has been urging its European allies to use future profits from immobilized Russian funds as collateral for a multibillion-dollar loan to Kiev. Initially, Washington pushed for the outright seizure of these funds, but European nations objected, citing legal concerns and potential damage to the West’s financial reputation.

A draft communiqué obtained by Bloomberg indicates that the finance ministers will state they are “discussing potential schemes to bring forward the extraordinary revenues stemming from immobilized Russian sovereign assets to the benefit of Ukraine.”

“We reaffirm that, consistent with our respective legal systems, Russia’s sovereign assets in our jurisdictions will remain immobilized until Russia pays for the damage it has caused to Ukraine,” the document adds.

Since the start of the Ukraine conflict in February 2022, the US and EU have blocked an estimated $300 billion in assets belonging to the Russian central bank. American banks are holding around $6 billion of this total, with the remainder held in Europe, according to media reports.

US Treasury Secretary Janet Yellen has suggested these assets could guarantee a loan of up to $50 billion for Kiev. However, several officials told Reuters that European ministers remain skeptical about the legality of such a move. Yellen also acknowledged that no concrete decision would be made on Saturday, telling reporters on Thursday that she expected the communiqué to include a “general agreement on the concept” rather than any specific figures.

Russia has repeatedly warned that seizing its assets would be considered theft and would prompt retaliation. On Thursday, Russian President Vladimir Putin signed a decree allowing any damages caused by the US plan to be offset by American-owned property in Russia. The decree empowers the Russian government and central bank to seek redress for such losses through a Russian court.

These discussions and potential actions reflect the ongoing complexities and high stakes in the international response to the Ukraine conflict.