Russia considering downgrading ties with US if assets are seized
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Western countries have now frozen around $300 billion of the Russian central bank's assets and reserves that were held in their jurisdictions.
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Russian Deputy Foreign Minister Sergei Ryabkov attends a meeting in Moscow, Russia, on March 15, 2022. (AP)
Russia has stated that it is considering reducing diplomatic and commercial ties with the United States if its assets are taken by the US government.
According to the RIA Novosti news agency, Russia's Deputy Foreign Minister Sergei Ryabkov stated on Thursday that if Western governments proceed with proposals to seize its frozen assets worth approximately $300 billion, Russia will consider downgrading its diplomatic relations with the United States.
Western countries have now frozen around $300 billion of the Russian central bank's assets and reserves that were held in their jurisdictions after the start of the war in Ukraine. The use of Russian assets to fund the Ukrainian regime without legal justification has even spurred criticism from the director of the International Monetary Fund (IMF) European Department, Alfred Kammer.
"With regard to the seizure of Russia’s assets … our view is that is something for the relevant jurisdictions and courts to determine and to decide," Kammer told a press briefing on Friday, adding, "From our side, what is important is that whatever action is taken, that the implications of the functioning of the international monetary system are being taken into account."
Kammer, reiterating the IMF’s previous statements on the issue, recalled IMF managing director Kristalina Georgieva’s words that "one needs to be wary of unintended consequences" of such actions.
RIA quoted Ryabkov as stating that "lowering the level of diplomatic relations is one of the options, of course. Many high-ranking representatives in our government have already spoken about the issues of our financial, economic and material response to this step (confiscation), which we are warning our opponents, as before, not to take."
Without giving further details, Ryabkov expressed that Russia was now "studying the optimal form of reaction, where countermeasures include actions against the assets of our Western opponents as well as diplomatic response measures."
"Among the countermeasures, there may also be actions against the assets of our Western opponents," he added.
Although no formal downgrading of relations has been declared since the war began, the Kremlin has termed the existing level of diplomatic ties between the US and Russia as "below zero".
Yellen calls EU plan 'very constructive'
In related news, US Treasury Secretary Janet Yellen said on Thursday that Washington welcomed the European Union's "very constructive step" of segregating proceeds from assets held by Brussels-based Euroclear and transferring them to Ukraine, noting that future interest could also be pulled forward to increase funds available for Ukraine.
During a Reuters Next interview in Washington, Yellen expressed that "this is an approach that could be broadly supported by countries that are concerned about the seizure of assets, and some of the interest could be brought forward through, for example, a loan."
According to a senior US source, this unusual means of funneling Russia's money to Kiev is one of many ideas under consideration by the G7 ahead of a leaders' conference next month.
The US Senate voted Tuesday to approve a foreign assistance package that includes long-stalled cash to "Israel" and Ukraine. The package, signed into law by US President Joe Biden on Wednesday, also includes provisions for seizing frozen Russian assets used to assist Ukraine.
Meanwhile, Russian Foreign Minister Sergey Lavrov has called the West's intentions to supply Kiev with provisions based on seized Russian assets as "thievish... in the literal sense."
Lavrov told journalists before Christmas last year that they have been "treacherous all along in political terms...in the sense of reneging on agreements and trying to deceive someone. Now they have turned out to be thieves in the literal sense."
No-longer-neutral Switzerland freezes $14.2bln of Russian assets
Days ago, Switzerland blocked around $14.2 billion, or 13 billion francs, in Russian assets held in the country, including more than 7 billion francs in reserves and assets of the Central Bank of the Russian Federation, according to Bloomberg.
The total private assets frozen as of the end of 2023 was 5.8 billion francs, the State Secretariat of Economic Affairs said on Tuesday.
Switzerland broke its supposed neutrality policy to adopt European Union sanctions against Russia following the Special Military Operation in Ukraine.
Earlier in March, Russia summoned the Swiss ambassador after lawmakers in Bern backed moves toward allowing Ukraine to use frozen Russian assets. Swiss lawmakers last week approved a series of motions that could pave the way for the government to work on an international basis to see how billions of dollars of Russia's frozen assets could be used for "reparations" to Ukraine.
Russia's Foreign Ministry said it had summoned Switzerland's envoy Krystyna Marty Lang to condemn the move, which Moscow said "grossly violates the fundamental principles and norms of international law."
