UK Prime Minister Keir Starmer acknowledged on Wednesday that the seizure of frozen Russian assets remains legally and politically complex, but confirmed that London is working with allies to explore possible measures.

"It is complicated, but we are working with others to see what is possible. But it is not straightforward," Starmer told UK parliament.

His statement comes as the UK has already transferred £752 million ($974 million) to Ukraine, part of a £2.26 billion loan package that will be repaid using proceeds from frozen Russian assets.

Following the start of the war in Ukraine, the EU and G7 nations froze nearly 300 billion euros of Russian foreign exchange reserves. The majority—over 200 billion euros—is held in European institutions, primarily within Belgium's Euroclear, a leading financial clearing system.

Despite ongoing discussions among Western governments about the possibility of confiscating these assets outright, legal and financial risks have delayed direct action. The G7 recently reaffirmed its commitment to imposing financial costs on Russia, with some officials advocating for using the frozen funds to bolster Ukraine's defense and economic recovery.

However, concerns over potential legal retaliation from Moscow and damage to global financial stability have made full asset seizures a contentious issue.

Moscow condemns asset freeze, threatens retaliation

Russia has forcefully rejected the West's asset freeze, with the Russian Foreign Ministry labeling it as "theft" targeting both individual and state funds.

Foreign Minister Sergey Lavrov warned that if the West moves forward with confiscating Russian state assets, Moscow will retaliate. This comes amid rising tensions between Russia and the UK, with recent reports indicating that Moscow now sees Britain as its "public enemy number 1", accusing London of leading the West's anti-Russian stance.

Additionally, Russian officials have suggested that Moscow could withhold Western-held funds inside its own financial system in response.

Vyacheslav Volodin, a key ally of President Vladimir Putin, called for Russia to reclaim interest accrued on frozen assets, referencing $26 billion in frozen Russian funds transferred to Ukraine by London.

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