The debate on seizing Russia’s frozen assets

G20 Finance Ministers Grapple with Decision on Frozen Russian Assets

At the recent G20 finance ministers meeting in Brazil, a heated debate ensued over the potential seizure or use of Russian assets frozen under western sanctions following the invasion of Ukraine. Delegates, including Saudi Arabia’s Mohammed al-Jadaan and Indonesia’s Sri Mulyani Indrawati, expressed deep concern over the implications of such a drastic step.

The discussion centered around whether to mobilize hundreds of billions of euros in frozen Russian central bank assets to support Ukraine in its ongoing conflict. While some, led by the US, argue that this move could turn the tide in Kyiv’s favor, others fear it could set a dangerous precedent in international law.

The Biden administration, along with Canada and some UK officials, support the confiscation of assets, while Japan, France, Germany, Italy, and the EU remain cautious, leading to a stalemate.

The debate has raised questions about the legality and consequences of seizing Russian assets, with concerns about potential retaliation and the impact on the international legal order. Countries like Indonesia and Saudi Arabia have lobbied against the seizure, fearing for the safety of their own reserves held in the west.

As the conflict in Ukraine continues, the G7 leaders’ summit in Italy next month is expected to be a crucial moment for addressing the issue. The decisions made by the G7 on this matter are seen as having far-reaching implications for international relations and the future of the global financial system.