Lithuanian CFA chair, counterparts call for use of all frozen Russian assets

  • 2024-06-12
  • BNS/TBT Staff

VILNIUS – Zygimantas Pavilionis, chair of Lithuania's parliamentary Committee on Foreign Affairs, and his foreign counterparts have signed an open letter calling for the use of all frozen Russian assets for Ukraine, not just proceeds from them.

In their letter, the lawmakers from Lithuania, United States, Poland, Italy, France, Bulgaria, Ireland, Czech Republic, Ukraine, Estonia, Moldova, Latvia, Denmark, Great Britain, Luxembourg, Romania, Netherlands, Belgium state that " G7 leaders are expected to make a decision at their next meeting on whether – and how – to seize the up to €300 billion in Russian state assets frozen in western countries since February 2022".

"We, as chairs of our respective parliamentary foreign affairs committees, collectively urge G7 leaders to explore all legal avenues to support Ukraine, starting with the creation of multilateral or bilateral loan facilities backed by the windfall profits generated by the frozen Russian assets," the letter reads.

"However, this should only be considered as a first step – not a final decision," the lawmakers underlined.

This week's G7 summit will take place in Italy. The White House has said it will announce measures to use frozen Russian assets, as well as new sanctions and export controls as a result of Moscow's invasion of Ukraine.

G7 leaders hope to agree on the use of interest proceeds on the 300 billion euros worth of frozen Russian central bank assets to help Kyiv. The G7 would provide Ukraine with a loan of around 50 billion US dollars (46 billion euros) from the profits from the Russian assets G7 summit worldwide. However, there are many remaining unclear technical issues.

The ultimate objective must be to fully confiscate all Russian assets and transfer them to Ukraine, ensuring that this process adheres to international law, the committee chairs say.

"At least €3 billion a month in outside financial assistance is required just to prevent a collapse of Ukraine’s economy. Against numbers like these, confiscating €3 billion in annual windfall profits on Russia’s frozen assets simply is not a sufficient response to the challenge Russia has issued to Ukraine and its friends in the democratic world," their letter reads.

The G7 Summit will take place at a politically turbulent time when increased support for Ukraine is high on the agenda.

On Thursday, Ukrainian President Volodymyr Zelensky will take part in a G7 discussion on Russia's war against his country and will once again ask for more help from Western countries.

The letter also states that full confiscation's market impact has already been assessed, adding that "seizure in response to aggression would be too rare an occurrence to have major currency impacts".

"The leaders of some of the major NATO countries are still unable to reach a final decision on Ukraine's NATO membership, despite the support of the parliaments of the NATO countries whose representatives on the parliamentary foreign affairs committees have today addressed the leaders of the G7, demanding that all the aggressor's frozen assets be used for Ukraine's reconstruction and defense," Pavilionis said.