The seizure of Moscow’s assets would be seen as a “very dangerous precedent” by US partners, Konstantin Kosachev has said
A White House proposal to seize frozen Russian funds and use them to help Ukraine is not only illegal, but also incredibly dangerous, as it could shatter the entire global financial system, according to Konstantin Kosachev, the vice speaker of Russia’s upper house of parliament.
The senator’s comments come after the New York Times reported on Friday that the Biden administration had intensified talks with US allies to requisition over $300 billion in Russian foreign exchange reserves frozen after the start of the Ukraine conflict.
Writing on Telegram on Friday, Kosachev called the initiative “crazy,” and said it did not have a single leg to stand on in legal terms. He recalled that central banks’ sovereign funds are shielded by a special immunity under customary international law, and no jurisdiction is allowed to impose any coercive measures on them.
Moreover, the senator continued, if the US were to seize Russian assets, it would violate not only international law, but also domestic legislation. He alluded to the 1976 Foreign Sovereign Immunities Act which protects the assets of foreign central banks, adding that many US allies have similar laws.
READ MORE: US wants $300 billion of Russian assets for Ukraine – NYT
“International judicial and arbitral practice confirms that it is impossible to impose seizure on funds belonging to central banks and sovereign wealth funds,” Kosachev stressed.
By disregarding this practice, the US is setting a “very dangerous precedent” that will harm the entire global financial system, he stated.