Kremlin Cries ‘Theft’ as the West Moves To Seize Russia’s Frozen Overseas Reserves

As American and European officials draw up the legal framework for confiscating $300 billion in Russian foreign reserves next year, the Kremlin spokesman, Dmitry Peskov, warned Friday that Russia would match any “theft” by confiscating an equal amount of Western investment in Russia.“It will be a significant blow to the main parameters of the international economy,” Mr. Peskov told reporters in Moscow, Reuters reported. “It will undermine the confidence of other countries in the United States as well as in the EU as economic guarantors. Therefore, such actions are fraught with very, very serious consequences.” Asked if there is a list of Western properties that Russia could seize in retaliation, Mr. Peskov responded: “Yes. There is.” He declined to specify which assets.The Kremlin is on edge after reports that the Western drive to seize Russian assets is speeding up. Earlier this month, G7 finance ministers discussed the issue. The Biden administration wants the seven countries to agree on a plan of action before February 24, the two-year anniversary of President Putin’s full-scale invasion of Ukraine. In January, three working groups are to decide on methodology, risk mitigation, and means of delivering the aid to Ukraine. An agreement would likely be announced during the Munich Security Conference between February 16 and February 18.Mr. Putin’s attack on Ukraine caught Russia’s Central Bank with almost half of its reserves — some $300 billion of $612 billion — parked in banks in America, Britain, the European Union, Japan, and Switzerland. Two-thirds of it, about $210 billion, is held by Euroclear, the securities depository headquartered in Belgium. A small country divided along language lines, Belgium may feel vulnerable to pressure from Russia. Another weak link may be Italy, which presides over the G7 this year.Inside the G7, the hawks on confiscating Russia’s assets are America, Britain, Canada, and Japan. The doves are Germany, France, Italy, and the EU. With Washington’s leadership, though, the G7 has a history of working out differences and reaching common ground. Approaches range from confiscating frozen money outright and giving it to Ukraine to using interest earnings as collateral for loans to Ukraine.Either way, the Kremlin reaction will be tough. Last week, a Russian foreign ministry official said confiscation would trigger a break in diplomatic relations with America. Separately, Mr. Peskov, the Kremlin spokesman, warned, as reported by Reuters: “If something is confiscated from us, we will look at what we will confiscate. We will do this immediately.”American and European officials warn that it would be months before Ukraine sees an infusion of Russian cash. America and Britain have to adopt enabling legislation. Russian legal challenges in Western courts are a virtual certainty. In that light, the Biden administration warns that tapping Russian reserves will not get Washington or Brussels off the hook for providing Kyiv with military and financial aid to allow Ukraine to survive in 2024.Underlining the need for aid to defend against Russia, Ukraine endured Friday its worst air attack of the 20-month war, Ukraine’s air force reported. Russian missiles and drones hit five major cities, killing 31 civilians and wounding 160. Of 158 Russian missiles and drones fired virtually simultaneously at Ukraine, air defenses managed to shoot down 114, Ukraine’s air force reported.Hours later, Britain’s defense ministry announced that it will send 200 air defense missiles to Ukraine. President Putin “is testing Ukraine’s defenses and the West’s resolve, hoping that he can clutch victory from the jaws of defeat. But he is wrong,” the British defense secretary, Grant Shapps, said. “Now is the time for the free world to come together and redouble our efforts to get Ukraine what they need to win.”President Biden said in a statement that the pre-dawn air attack “is a stark reminder to the world that, after nearly two years of this devastating war, Putin’s objective remains unchanged. He seeks to obliterate Ukraine and subjugate its people. He must be stopped.”With American senators expected to resume talks next week over a $61 billion aid package to Ukraine, Mr. Biden warned that “unless Congress takes urgent action in the new year, we will not be able to continue sending the weapons and vital air defense systems Ukraine needs to protect its people. Congress must step up and act without any further delay.”In 2022, Congress approved more than $110 billion for Ukraine. But it has not approved any funds since Republicans took control of the House of Representatives from Democrats in January 2023.

Kremlin Cries ‘Theft’ as the West Moves To Seize Russia’s Frozen Overseas Reserves

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