Financial Times: U.S. suggests transferring frozen Russian assets to Ukraine as ‘advance’ on compensation for war damages

U.S. officials are suggesting transferring frozen Russian Central Bank assets to Ukraine as an “advance” on compensation for damages from the war, reports The Financial Times, referencing a document presented by the U.S. for discussion among the G7 countries.

According to U.S. officials, transferring these assets could be a “countermeasure” in line with international law and might “induce Russia to end its aggression.” Washington believes that these frozen assets could be transferred to Ukraine in tranches, possibly through intermediaries like the World Bank or the European Bank for Reconstruction and Development.

The FT notes that the idea of seizing Russian assets is fraught with legal consequences, as the Russian Central Bank’s frozen reserves are protected by international law. Any actions involving these assets could signal to countries like China or Saudi Arabia that their assets, held in euros or dollars, might not always be secure. European officials are wary of the repercussions, as most of the frozen assets are in the E.U., with one official commenting that the E.U has “much more to lose” than the U.S.