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US Treasury Secretary: Frozen Russian assets could aid Ukraine through various means

Options include using assets as collateral for Ukraine to borrow against or following EU’s approach of segregating interest earned on Russian assets to transfer to Ukraine
US Treasury Secretary Janet Yellen
US Treasury Secretary Janet Yellen. Credit: BBC
US Treasury Secretary: Frozen Russian assets could aid Ukraine through various means

US Treasury Secretary Janet Yellen said on 25 April that the outright seizure of Russian assets is justifiable but is only one possible option, Reuters reports. “Assets (also) able to serve as collateral for borrowing in the market to help Ukraine,” she said.

“That’s an option that’s been discussed. The leaders (G7) have asked us to give them a range of options,” Yellen said in an interview with Reuters.

She highlighted the European Union’s approach, saying, “The Europeans have taken a very constructive step, and most of the Russian assets held in Belgium have now been converted to cash, and Euroclear earns interest on those assets. The European Union has agreed to segregate that interest and essentially move forward on a program in which it can be transferred to Ukraine.”

According to the report, Yellen acknowledged this as “an approach that could be broadly supported by countries concerned about seizure of assets … there are a range of options.”

Western countries have frozen over $300 billion of Russian assets since the full-scale invasion of Ukraine began, but outright confiscation has not been achieved due to legal and reputational risks.

The US and G7 countries are considering several options, including using the proceeds from Russian assets to provide aid and weapons to Ukraine or transferring the assets to Ukraine as compensation for Russia’s aggression.

Vice President of the European Commission Valdis Dombrovskis said the $300 billion in frozen Russian assets could be used as collateral for loans to Ukraine.

The recent US aid package signed by President Joe Biden on 24 April allows his administration to seize Russian state assets and use them for Ukraine’s benefit, though it is unlikely the US will do so without the consent of other G7 members and the European Union.

The G7 nations intend to discuss confiscating proceeds from Russian assets for Ukraine’s benefit ahead of the June G7 Summit.

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