Russia Warns of Retaliation Over Plan to Seize Income from Its Assets

MOSCOW – Russia possesses “significant amounts” of Western assets and property within its jurisdiction that could become targets for retaliation if the West proceeds with plans to seize income from Russian assets, Foreign Ministry spokeswoman Maria Zakharova stated on Wednesday.

Leaders of the Group of Seven (G7) agreed at a recent summit in Italy to utilize interest from Russian assets frozen in the West to provide a $50 billion loan to Ukraine. Russia has condemned this action as illegal, warning that it would undermine confidence in the global financial system and backfire on the West.

“Our country has significant amounts of Western funds and property that are under Russian jurisdiction; all of this may be subject to Russian retaliatory policies and retaliatory actions,” Zakharova told reporters.

“Of course, no one will disclose the nature of these retaliatory actions to you. But the arsenal of political and economic countermeasures is wide.”

Economists and legal experts suggest that one of Russia’s most likely retaliatory actions would be to confiscate foreign investors’ financial assets and securities held in special “type-C” accounts. Access to these accounts has been blocked since the start of the war, unless a waiver is granted by Moscow.

Approximately 260 billion euros ($281 billion) in Russian assets, including central bank reserves, have been frozen under sanctions imposed due to Moscow’s war in Ukraine. Around 190 billion euros of these assets are held in Euroclear, a Belgium-based central securities depository.

European Union officials recently told Reuters that the bloc might provide about half of the $50 billion loan to Ukraine. However, Italian Prime Minister Giorgia Meloni, who hosted the G7 summit, later indicated that the funds would come from the United States, Canada, Britain, and possibly Japan, with EU states not directly involved at this stage.

Zakharova mentioned that Russia had received “direct signals” from some G7 countries indicating their reluctance to participate in such actions due to the anticipated severe costs. She did not specify the countries or provide further details to substantiate this assertion.

As the situation evolves, the global financial and political landscape remains tense, with both sides weighing the potential consequences of their actions.