Rishi Sunak Calls Frozen Russian Assets to be Seized, Handed to Ukraine

The Grand Kremlin palace, left, and the Cathedral of the Annunciation, in Moscow, Russia, on Tuesday, Feb. 22, 2022. The ruble tumbled the most since March 2020 after President Vladimir Putin recognized self-declared separatist republics in east Ukraine, deepening a standoff with the West.

(Bloomberg) — British Prime Minister Rishi Sunak has called for Western nations to be more aggressive in seizing frozen Russian assets and passing the proceeds on to Ukraine to finance its defense.

Countries that sanctioned Russia over its 2022 invasion of Ukraine “must be bolder in seizing the hundreds of billions of frozen Russian assets,” Sunak wrote in an editorial in the Sunday Times published to mark the two-year anniversary of the Russia’s invasion. That process could start with sending the interest built up on the frozen assets to Ukraine, he wrote.

Sunak’s call to Group of Seven nations to find a “lawful way” to seize the frozen assets, could prove challenging. International banks have raised concerns about the plans, warning the UK government that any seizure of sanctioned Russian funds must have a firm legal footing. Otherwise it risks shocks to the global financial system as well as institutions being exposed to legal action.

As the war enters its third year, Ukraine is becoming more desperate for funding and munitions to keep Russian forces in check. A $60 billion US aid package is facing Republican opposition, and President Joe Biden last week blamed inaction by Congress for Moscow’s troops capturing the embattled eastern city of Avdiivka. The fall of the city just before the two-year mark of the war offered a symbolic victory for President Vladimir Putin, who’s looking to extend his rule in elections next month.

Sweeping international sanctions, imposed after Moscow’s invasion in February 2022, froze an array of assets including about $300 billion owned by the Russian central bank. A global campaign by politicians and activists demanding more assets be seized and the proceeds sent to Kyiv has been gaining momentum.

Foreign Secretary David Cameron is expected to represent the UK at a meeting hosted by French President Emmanuel Macron in Paris on Monday to discuss support for Ukraine, at which the subject of asset seizures could be raised. But little progress is expected before a gathering of the Group of Seven leaders in Italy in June, people involved in the discussions said.

Some in the finance industry told Bloomberg that the mounting political rhetoric must be translated into internationally coordinated measures to ensure that any seizures are lawful. Some bankers and lawyers in the UK warn that high-profile confiscations of assets risk damaging London’s reputation as an international financial center and could spark questions about the rule of law.

–With assistance from Katherine Griffiths, Philip Aldrick and Kitty Donaldson.

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