G7 work on harnessing Russian assets ‘a work in progress,’ US’ Adeyemo says

By Thomson Reuters Apr 17, 2024 | 1:05 PM

By David Lawder and Andrea Shalal

WASHINGTON (Reuters) – Deputy U.S. Treasury Secretary Wally Adeyemo said G7 finance leaders were working towards a plan to unlock the value of frozen Russian sovereign assets to aid Ukraine in the near term, but the talks are still a “work in progress.”

Finance ministers and central bank governors from the Group of Seven industrial democracies are meeting on Wednesday on the sidelines of the International Monetary Fund and World Bank meetings in Washington to discuss how to harness some $300 billion worth of frozen Russian assets.

Adeyemo told an event hosted by the Semafor news outlet that finance ministers were doing technical work to come up with options so that G7 leaders can make decisions on a path forward at a June summit in Italy.

He said these options still include building a strong legal foundation for outright seizure of the assets.

“We’re talking through a number of different options. One of them is seizure, but another is collateralizing, or even using the windfall profits or the interest from these assets to fund a loan,” Adeyemo said.

Because the bulk of the assets are being held in Europe, it was important that the U.S. work closely with European allies on the issue, Adeyemo said.

The United States insists there is a solid basis in international law for seizure of the Russian assets, but Germany and France have raised concerns about any such move, worried that it could set dangerous precedents.

Using the interest from the assets as collateral for loans or bonds would not require seizure of the assets.

French Finance Minister Bruno Le Maire said on Wednesday that the G7 needed to be in a position to harness the interest earned on the assets.

“These revenues are estimated between 3 billion to 5 billion euros per year, depending on the level of the interest rates,” Le Maire said. “So our proposal is to better understand and better define how these three to 5 billion euros could be used over the next month to help Ukraine and to help the Ukrainian government. So let’s focus on that question.”

The ministers are not expected to decide on a plan this week, but one of the most promising proposals under consideration would see G7 countries pull forward the interest due on the frozen Russian assets to use as collateral for loans or bonds issued to help Ukraine, sources familiar with the issue said.

(Reporting by David Lawder and Andrea Shalal; Editing by Chizu Nomiyama)