G7 countries will continue to freeze Russian assets until the end of the conflict in Ukraine

The G7 countries will keep Russian assets frozen until the conflict in Ukraine ends. About it says in a joint statement by the G7 foreign ministers following their meeting in Japan.

“We are determined, in accordance with our legal systems, that Russia’s sovereign assets in our jurisdictions will remain immobilized until a resolution is reached to the conflict related to Russia’s violation of the sovereignty and territorial integrity of Ukraine. Any settlement of the conflict must ensure that Russia pays for the damage it has caused,” the statement reads.

Earlier, the German newspaper Die Welt, citing an internal document of the European Commission (EC) informedthat the EC has come to the conclusion that after the end of the conflict in Ukraine, the frozen assets will have to be returned to Russia. At the same time, European officials are considering the possibility of investing blocked assets of the Central Bank in European government bonds with an annual yield of 2.6%. The EC believes that such an “emergency measure” will finance the restoration of Ukraine. The agency notes that it is possible to take this step from a legal point of view, “especially given Russia’s gross violations of international law.”

The risk of losing funds is “very small”, according to the EC. According to the agency, in the worst case, if the “extreme scenario” develops, losses could amount to 4 billion euros.

Die Welt also notes the “difficult situation” with the frozen assets of Russian businessmen. By October 2022, EU countries have blocked about 17 billion euros belonging to Russian companies and citizens. In February, this amount increased to 21.5 billion euros, the EC reported. The German newspaper writes that “the amount has hardly increased”, given the statements of the EU about the desire to make Russia “pay for its actions.” The publication explains this by the fact that the assets of Russian businessmen “are often well hidden.”

Against the backdrop of a special operation in Ukraine, Western countries imposed large-scale sanctions against the Russian Federation, and also froze Russian assets abroad. In November 2022, the head of the European Commission, Ursula von der Leyen, said that the West had blocked 300 billion euros in the reserves of the Central Bank of the Russian Federation. At the same time, she proposed to create an investment fund from these funds, and use the profits for compensation payments to Ukraine.

The Kremlin also called the freezing of Russian assets a theft. At the end of October 2022, the press secretary of the President of the Russian Federation Dmitry Peskov said that the blocking of assets abroad is contrary to international law. He noted that Russia is limited in its actions to combat such a decision, but the Russian authorities will not “sit idly by.” In early January, Russian Foreign Ministry spokeswoman Maria Zakharova said that the Russian side was considering options for returning access to frozen assets.