NewsRescue
Since March 2022, Western governments have frozen nearly $300 billion in Russian currency reserves. The EU has been looking for methods to benefit from such money, but Moscow has cautioned that doing so would be theft.
Russian officials have often stated that confiscating public and private assets violates all free market principles. Finance Minister Anton Siluanov has warned of “an absolutely symmetrical response,” stressing that “sufficient assets” are available in ‘C-type’ accounts, which are specialised ruble-denominated bank accounts. Some of these include dividend reserve responsibilities to ‘unfriendly’ countries (those who support sanctions). Siluanov went on to say that all of those assets have been frozen, “the amount isn’t small,” and the proceeds from their use are substantial.
The finance minister was echoed by Kremlin spokesman Dmitry Peskov, who stated Russia would challenge any confiscation in the courts. The seizure of Russian assets by Western countries would be “illegal” and “extremely dangerous” for the global financial system and the world economy, he continued, adding that any such a move would amount to theft. “If something is confiscated from us, we will look at what we will confiscate. We will do this immediately,” the Kremlin spokesman warned.
According to official predictions, the Russian central bank’s reserves will fall by 8.4% in 2022 when assets in the G7 countries, the EU, and Australia are immobilised. Notably, the EU is said to own €210 billion ($232 billion) of Russia’s reserves. Belgium is thought to have €191 billion, France has €19 billion, and non-member Switzerland has €7.8 billion. According to reports, the US has frozen over $5 billion in Russian state assets. The EU hopes to raise €15 billion for Ukraine from the revenues of frozen Russian assets, subject to unanimous consent from all member states.
In July, Euroclear, a prominent EU clearing house based in Belgium, announced that of the €2.28 billion it earned in the first half of 2023, it profited more than €1.7 billion from blocked Russian assets. Euroclear is thought to contain €196.6 billion in Russian money, the vast majority of which are owned by the Bank of Russia. Furthermore, around 5 million private Russian investors had their funds frozen in the accounts of international financial institutions. As of July of last year, the value of frozen securities in individual investors’ portfolios was $3.4 billion.
Despite numerous warnings that such steps may jeopardise the credibility of the Western financial system and currencies, Western powers have been deliberating for months on how these monies should be taken and donated to Kiev. Policymakers in the EU have been debating the introduction of a windfall tax on gains created by immobilised funds, which are expected to yield €3 billion in earnings. When the G7 leaders meet in February, they are expected to discuss a plan that would allow the seizure of frozen Russian assets, according to Reuters, citing sources.
