France and Germany have warned that outright confiscation would reflect badly on the West’s financial system
A rift is growing between Western allies over confiscating frozen Russian assets to help Ukraine as they continue to argue over legal ways to use the immobilized funds, Bloomberg reported on Wednesday.
The West has frozen roughly $300 billion in assets belonging to the Russian central bank since the start of the Ukraine conflict.
The US and UK have been pushing for actions to outright seize these funds in order to fund the government in Kiev.
US Treasury Secretary Janet Yellen this week insisted that the legal and moral foundations for confiscation were strong, while UK Prime Minister Rishi Sunak urged Western countries last week to be “bolder” in their efforts to tap the assets.
The EU, however, has been warning about the legal and financial implications of such a move. Speaking on the sidelines of a meeting of finance ministers from the G20 group of major global economies in Sao Paulo on Wednesday, French Finance Minister Bruno Le Maire publicly challenged Yellen’s view that it would be legal to tap the Russian funds, revealing deep divisions among G7 countries.
“We don’t have the legal basis to seize the Russian assets now,” Le Maire said. “We need to work more.”
The EU is looking into “a legally secure step that can also be implemented in the short term” to use proceeds such as the interest earned from the frozen assets to aid Kiev, German Finance Minister Christian Lindner told reporters on Wednesday.