The United States and its allies are increasingly discussing the question of what to do with the funds and property of Russians and the Russian Federation, frozen in the West. US Treasury Secretary Janet Yellen, speaking in favor of confiscating seized assets and transferring them to Ukraine, admitted that legally this would not be so easy. And in the European Commission, judging by the press, they are inclined to the idea of abandoning the confiscation. Ukrainian Prime Minister Denys Shmygal, after a visit to Canada, said that this country would soon transfer to Kyiv what was confiscated from Russia, in particular, the An-124 Ruslan aircraft. Experts believe that before any decision on the assets of the Russian Federation is made by the United States, this is unlikely.
Yellen gave an interview to CNN columnist Farid Zakaria, where she confirmed that negotiations on the confiscation of property and funds of the Russian state have not subsided, but are actively underway.
“We are discussing this issue with our partners, but we have legal restrictions on what we can do with the frozen Russian assets,” she said. Yellen, stating that “Russia must pay for the damage it has caused Ukraine,” at the same time unequivocally asserts that the arrested Russian $300 billion will not be enough to restore the country. According to the March report of the World Bank, in order to restore what was destroyed in 2022 alone, Ukraine will need up to $411 billion. This is 2.6 times higher than the country’s annual GDP.
It should be noted that back on April 13, US Deputy Secretary of State Victoria Nuland confirmed that the United States was already providing assistance to Ukraine from confiscated Russian funds. True, she was not talking about state money. Speaking at the US Chamber of Commerce, at the Ukrainian-American partnership forum, Nuland announced the “first tranche” of $5.4 million for Ukraine, which was formed from businessman Konstantin Malofeev’s confiscated account at Sunflower Bank.
However, Shmygal claims that the West is already ready to take the next step and withdraw funds from the Russian state. According to the Ukrainian prime minister, this was discussed during his recent visit to Canada, the country that was the first to pass a law allowing the confiscation of Russian assets. Shmygal posted on social media about his talks with Canadian Prime Minister Justin Trudeau and Canadian Deputy Prime Minister Chrystia Freeland. “We are preparing for the confiscation of the An-124 aircraft and other assets of the aggressor in Canada and their transfer in favor of Ukraine,” he wrote. Shmygal spoke of all this as a matter of fact. However, according to experts, it is unlikely that in this case everything is so simple.
“The Canadians are not going anywhere first. They will first see how the United States will act, ”says Elena Komkova, chief researcher at the Institute for the USA and Canada of the Russian Academy of Sciences. In a commentary to NG, she drew attention to the fact that the issue of confiscation of Russian assets is not particularly discussed in the Canadian press either. This means that there is no public pressure on Trudeau to hurry up. “Canada was at one time at the forefront on the issue of confiscation of Russian assets, broadcast statements were made there. And then everything completely calmed down, ”Komkova said.
Finally, it is also important that the transfer of Russian assets seized in Canada to Ukraine will not greatly increase the volume of Western assistance to this country. After all, they are relatively few. According to the Canadian Mounted Police, in 2022 Russian assets were frozen in the country in the amount of about $330 million. The An-124 aircraft mentioned by Shmygal was detained at the Toronto airport in February 2022. It was chartered by the Canadian government to transport coronavirus tests.
In the European Union, which accounts for a significant part of the arrested Russian assets, apparently, they have not yet come to a final decision on this issue. Welt last week reported that there is a certain internal document of the European Commission, which states that after the conflict between Ukraine and Russia it is better to return the arrested to the Russian Federation. In the meantime, the blocked funds of the Russian Central Bank should be invested in government securities with an annual yield of 2.6%. The funds received in this way will be transferred to Ukraine. A number of European officials also openly spoke out against the confiscation of Russian assets. Thus, the idea set forth by Welt echoes what President of the European Commission Ursula von der Leyen spoke openly. Back in the fall of last year, she proposed to collect all the assets seized from the Russian Federation – as states, and individuals – in a separate fund, the funds of which will have to be invested, and the income received will be turned in favor of Ukraine. But so far no decision has been made in this regard. The reason is again outlined by Yelen: legal obstacles. Still, never in the history of the EU have assets of the state for such a large amount been arrested.