G7 ministers to release roadmap for using frozen Russian assets

RT
Fri, 24 May 2024 21:01 UTC

© Gabriel Bouys/AFP

G7 Finance Ministers Meeting in Stresa, Italy • May 24, 2024

Washington and its allies will discuss "potential schemes" to get the money to Kiev, Bloomberg reported.

Finance ministers from the G7 economies will release a joint communique on Saturday expressing their support for using the revenue generated by roughly $300 billion in frozen Russian assets to aid Ukraine, Bloomberg reported on Friday.

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

In the runup to the meeting, the US has been pressing its European allies to use future profits from immobilized Russian funds as a guarantee for a multibillion-dollar loan to Kiev. While Washington initially advocated the outright seizure of this money, the Europeans objected, citing legal issues and potential damage to the West's financial credibility.

According to a draft communique seen by Bloomberg, the finance chiefs will state:

"We 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 US and EU have blocked an estimated $300 billion in assets belonging to the Russian central bank since the start of the Ukraine conflict in February 2022. American banks are sitting on around $6 billion of this sum, with the rest held in Europe, according to media reports.

US Treasury Secretary Janet Yellen has said these assets could guarantee a loan of up to $50 billion for Kiev.

However, multiple officials told Reuters that the European ministers remain unconvinced of the legality of such a move. Yellen too conceded that no concrete decision would be reached on Saturday, telling reporters on Thursday that she expected the communique to include a "general agreement on the concept" rather than any precise figures.

Russia has repeatedly warned that seizure of its assets would amount to theft and trigger a retaliation.

Russian President Vladimir Putin signed a decree on Thursday that would allow any damages caused by the US plan to be offset by American-owned property in Russia. The Russian government and central bank would be empowered to seek redress for such losses through a Russian court.

Comment: Putin orders American Express bank to liquidate:

Russian President Vladimir Putin has granted American Express bank the right to 'voluntary liquidate' its business in Russia, according to a document published on the portal of legal acts on Wednesday. The order did not specify how and when exactly the liquidation process will take place.

According to the document, the decision comes in accordance with a decree signed by Putin in August 2022 concerning special economic measures in the financial and energy sectors in connection with the 'unfriendly actions of some foreign states and international organizations'.

In October 2022, Putin approved a list of 45 foreign-owned credit institutions, including American Express, transactions in the shares or share capital of which were banned without the president's special permission.

American Express announced in March 2022 that it was suspending all operations in Russia and Belarus in light of Western sanctions over the Ukraine conflict. The decision followed a similar move by fellow US payments firms Visa and Mastercard.

Since then, globally issued AmEx cards no longer work in Russia, while cards issued locally in Russia don't work outside the country on the American Express global network. American Express had been operating in Russia since 2008, as part of the American Express Global Corporate Payments business division.