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G7 to discuss US proposal on confiscating Russian asset income before June summit - Reuters

G7 to discuss US proposal on confiscating Russian asset income before June summit - Reuters Illustrative photo (Getty Images)
Author: Liliana Oleniak

The Group of Seven (G7) countries intend to discuss the US idea of confiscating the proceeds of Russian assets in favor of Ukraine before the June summit, according to Reuters.

Securing interest on frozen Russian assets, which will amount to about $5 billion a year, is becoming one of the best options for overcoming differences between the United States and Europe ahead of the G7 leaders' summit in Italy in June.

But G7 members are still arguing over some 'holdbacks' that would cut the expected profit to $2.5-3.0 billion, one official said, pointing to Belgium's 25% tax rate, a 'convenience fee' applied by the Euroclear depository and a proposed reserve for litigation.

The G7 Finance Ministers will revisit the issue at a meeting in late May to work out a consensus proposal to present to leaders at the June summit.

“We feel a sense of urgency to build international consensus. Everyone acknowledges that we need to do more,” the G7 official says. A second G7 official echoes this view, emphasizing the need to provide long-term financing for Ukraine.

Frozen Russian assets

Western countries have frozen more than $300 billion of Russian assets since the beginning of the war in Ukraine. Confiscating them has not yet been possible due to legal and reputational risks.

Therefore, the United States and the G7 countries are considering several options. In particular, the income from Russian assets should be transferred to Ukraine for the purchase of weapons. In addition, there have been proposals that Russian assets be transferred to Kyiv as compensation for Russia's invasion.

Vice President of the European Commission Valdis Dombrovskis said that the frozen Russian assets for $300 billion could be used as collateral for loans to Ukraine.