NewsEuropean Central Bank warns of legal risks in redirecting frozen Russian funds to Ukraine

European Central Bank warns of legal risks in redirecting frozen Russian funds to Ukraine

Christine Lagarde, the President of the European Central Bank, has expressed concerns about the legal complexities of transferring frozen Russian assets to Ukraine. She believes such actions could potentially breach the international order—a standard the West insists Russia should comply with, as reported by the Financial Times.

According to the head of the ECB, the use of frozen Russian assets may violate the law.
According to the head of the ECB, the use of frozen Russian assets may violate the law.
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5:43 AM EDT, April 19, 2024

According to the Financial Times, "I have encountered four different programs or proposals designed to navigate what many lawyers, including those in national administrations, regard as a significant legal hurdle. This could be seen as an infringement of the international legal order," Lagarde remarked. She noted that efforts to develop these proposals are still in progress.

"Transitioning from freezing assets to their confiscation and subsequent use demands meticulous deliberation," Lagarde highlighted, cautioning that this might equate to "violating the international order we aim to safeguard and which we would expect Russia to observe."

Billions for Ukraine

The EU has approved a proposal to redirect profits from the Russian central bank's assets—which were frozen by the G7 countries in response to Russia's February 2022 attack on Ukraine—as part of the sanctions. This strategy will generate several billion euros, primarily within the EU.

The United States is currently advocating for the confiscation of the assets outright. This pertains to around 300 billion euros ($312 billion USD) of the Russian central bank's assets, held in securities and cash.

G7 finance ministers convened on this issue in Washington on Wednesday, but no groundbreaking decision was reached. In their declaration, they reaffirmed their "resolve to ensure Russia compensates for the harm it has inflicted on Ukraine." They stressed that until suitable measures are taken, Russian assets will continue to be frozen.

Efforts to devise methods for utilizing these assets are expected to be finalized before the G7 summit, which is scheduled for June in Apulia.

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