The United States, supported by the United Kingdom, Japan, and Canada, is reportedly urging G7 nations to explore the possibility of confiscating approximately $300 billion worth of Russian assets that have been frozen in response to Russia’s invasion of Ukraine.
This initiative is scheduled to be presented in February, marking the two-year anniversary of the ongoing conflict in Eastern Europe. While some G7 nations are in favor of this proposal, Germany, France, Italy, and the European Union have expressed reservations about seizing sovereign Russian assets.
Notably, the focus of this effort appears to be on assets owned by Russia’s central bank rather than those owned by Russian elites.
US-led initiative and proposed working groups
The United States is taking the lead in pushing for the confiscation of these frozen assets, seeking support from its G7 allies. The approach involves establishing three working groups with specific tasks:
Mechanics of Asset Confiscation: The first working group would be tasked with analyzing the technical aspects of confiscating the frozen Russian assets. This would involve identifying the practical steps required to execute the confiscation.
Legal Implications: The second working group would focus on examining the legal implications of such an action. This includes assessing the potential legal challenges and consequences of seizing these assets.
Utilization for Ukraine: The third working group’s primary objective would be to explore how the confiscated assets could be used to support Ukraine, which has been facing economic challenges due to the ongoing conflict.
Russia’s response and concerns
Russia has strongly condemned the proposal to confiscate its frozen assets, arguing that such an action would violate free market principles. A senior Russian official, who remained anonymous, conveyed Russia’s stance, stating,
“Let’s see what they decide. The protection of private property is a sacred cow that has been feeding them for many centuries.”
This sentiment highlights Russia’s opposition to any move that could undermine property rights, particularly those related to sovereign assets.
With these developments, Russia has been discussing the possibility of creating a new currency within the BRICS economic alliance. Sergey Glazyev, a former Russian minister, revealed in an interview with TV BRICS that significant progress has been made toward establishing this currency.
The currency is believed to be at least partially backed by gold, aiming to provide an alternative to traditional fiat currencies. However, its realization hinges on obtaining the political support of BRICS member nations.
Glazyev emphasized the technical readiness of the currency, stating,
“We need only political will because technically this currency is almost ready. The software and mathematical tools have been created.”
He also highlighted that some BRICS member nations have already expressed their support for the idea, with a key focus on garnering the backing of China and India to advance this initiative.