US administration officials previously said that the law does not allow them to confiscate another state’s money. But now the rhetoric has changed, Bloomberg writes. After congressmen stalled with the allocation of financial aid to Ukraine, there was an active discussion of a bill to confiscate Russian assets and transfer them to Ukraine. However, without the support of the Europeans, there is no sense in this, the publication notes.
The Joe Biden administration has expressed its support for a bill that would allow it to confiscate frozen Russian assets and send them to Ukraine, Bloomberg reports. The move came after Congress stalled a new aid package for Ukraine.
In the past, administration officials, including Treasury Secretary Janet Yellen, have said that current U.S. law does not allow for the confiscation of sovereign assets. But now the proposal has been backed by representatives of both parties.
At the same time, the White House fears that this step may spoil the reputation of the US financial system and provoke a flight from the dollar. Besides, the confiscation itself is still a long way off, and because of it such countries as India, Brazil, South Africa will treat the States worse, and tensions with China will increase.
The Biden administration also wants to coordinate this step with its G7 allies, especially in Europe, where about $200bn of frozen Russian assets are kept. The US has only $4-5bn of them, so it makes no sense for them to take such a step unilaterally.
But it is far from certain that Europe will go for it. A number of key EU members, including Germany and France, as well as the European Central Bank, are concerned about the impact this move could have on the stability of the eurozone. They also fear that Moscow could retaliate by confiscating funds blocked in Russia.