Russia says it has plenty of scope to retaliate over plan to seize income from its assets

By Thomson Reuters Jun 19, 2024 | 6:29 AM

MOSCOW (Reuters) – Russia has “significant amounts” of Western assets and property on its territory that could be targets for retaliation by Moscow if the West seizes income from Russian assets, Foreign Ministry spokeswoman Maria Zakharova said on Wednesday.

Leaders of the Group of Seven (G7) agreed at a summit in Italy last week to use interest from Russian assets frozen in the West to provide a $50 billion loan to Ukraine.

Russia says the action is illegal and will rebound against the West by undermining confidence in the global financial system.

“Our country has significant amounts of Western funds and property that are under Russian jurisdiction; all of this may be subject to Russian retaliatory policies and retaliatory actions,” Zakharova told reporters.

“Of course, no one will disclose the nature of these retaliatory actions to you. But the arsenal of political and economic countermeasures is wide.”

Economists, lawyers and experts say one of Russia’s most likely actions would be to confiscate foreign investors’ financial assets and securities currently held in special “type-C” accounts, to which access has been blocked since the start of the war unless Moscow grants a waiver.

Some 260 billion euros ($281 billion) in Russian assets such as central bank reserves have been frozen under sanctions imposed over Moscow’s war in Ukraine. Around 190 billion euros of the assets are held in Euroclear, a Belgium-based central securities depository.

European Union officials told Reuters last week that the bloc might provide about half of the $50 billion loan to Ukraine. However, Italian Prime Minister Giorgia Meloni, the G7 summit host, later said the money would come from the United States, Canada, Britain and probably Japan and that EU states would not be directly involved for now.

Zakharova said Russia had received “direct signals” from some G7 countries that they would not take part in such action “because they understand the costs will be extremely painful”. She did not name the countries or provide further detail to substantiate that assertion.

(Reporting by Reuters, writing by Mark Trevelyan; Editing by Andrew Osborn)