The head of the US Treasury pours cold water on the idea of ​​confiscating Russian assets

US Treasury Secretary Janet Yellen said on Monday that Russia should bear the cost of damage caused by its aggression in Ukraine, but there are “significant legal obstacles” to seizing large frozen Russian assets, reports said. Reuters and Agerpres.

Janet YellenPhoto: Press Office of the President of Ukraine / AP / Profimedia

Speaking to reporters by phone during a surprise visit to Kiev, Yellen said the United States would examine Ukraine’s calls to impose sanctions on Russia’s nuclear sector, but added that you should be aware of the potential consequences of such a move. on the Western Allies.

Yellen said the U.S. and its allies are discussing strategies to ensure Russia pays for the devastation of its war, which, in its second year, is estimated to be in the hundreds of billions of dollars and growing daily.

Washington has seized assets used in criminal activities, but central bank assets and other large assets frozen by sanctions are another matter.

“We have, on a small scale, seized assets, but there are certainly legal challenges in doing more than that,” he said.

A significant portion of Russian assets frozen in the West are located in the United States

The United States and Western allies have seized more than $300 billion in foreign currency assets of the Russian central bank, frozen by sanctions. Assets are held abroad, a significant portion at the Federal Reserve Bank in New York, but remain Russian assets.

Some European officials have called for them to be confiscated outright, and Ukrainian Prime Minister Denis Shmihal said he and Yellen had discussed the issue earlier Monday.

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Russia’s nuclear industry has so far survived several rounds of sanctions because many countries, including France, rely on Russia’s Rosatom for uranium supplies.

“We want to lose Russia’s income. We also have to look at the potential consequences of sanctions for us and our partners,” Yellen told reporters. He reiterated that the US has warned China of “really severe consequences” if the Beijing government, Chinese companies or financial institutions provide material support to Russia’s war effort or help Moscow circumvent US sanctions.

“This is something we will not tolerate,” he added.

But China rejected the US warning.

US Treasury chief says Ukraine has “stronger controls”

Asked what assurances he received from the United States that Ukraine would responsibly use more than $14 billion in direct economic and budgetary aid, he said there were strong restrictions on funds distributed through the World Bank, but that it was important for Ukraine to continue its resistance. – Corruption and administrative attempts.

“(Ukrainian) President (Volodymyr) Zelensky is committed to solving this problem and is working on implementing, for example, the independent appointment of directors in some large state-owned enterprises,” he said.

Yellen’s comments come after Valdis Dombrovskis, the European Commission’s vice-president for economic affairs, said last week that the EU was working on a legal framework to freeze seized Russian assets.

“We are working on legal solutions to use confiscated Russian assets for the reconstruction of Ukraine (…) Our sanctions are too strong and contribute to the prolonged economic slowdown in Russia. But their effectiveness depends on how they are used,” he said.

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