The United States is preparing to leverage its frozen Russian assets as a strategic tool in ongoing negotiations with Moscow over the Ukraine conflict. Treasury Secretary Scott Bessent outlined this approach during a recent interview, stating that these funds should serve as bargaining chips rather than being immediately seized and transferred to Ukraine. Bess, who is also the Treasury Secretary, clarified that the U.S. holds approximately $5 billion in frozen Russian assets, with the majority of the funds currently under the jurisdiction of the European Union. The U.S. has not yet taken the step of confiscating the assets, instead favoring a loan program backed by the interest generated from these funds. This strategy aligns with the European Union’s approach, which channels the profits from the frozen assets toward Ukraine’s rebuilding efforts, with the windfall proceeds estimated at over $3 billion annually.
The debate over the use of frozen Russian assets has been contentious within the West. Some EU leaders and experts have raised concerns about the legality and potential impact of outright seizure, warning that it could breach international law, reduce investor confidence, and disrupt financial markets. The EU has instead opted to transfer profits and interest from the assets to Ukraine, a method that has generated more than $3 billion annually. Meanwhile, the U.S. Congress passed legislation last year granting the administration legal authority to confiscate Russian sovereign assets, although Washington has not yet used this provision, citing legal and financial risks. Instead, the U.S. joined other G7 members in supporting a $50 billion loan to Ukraine, backed by interest earnings from frozen Russian assets.
Kremlin spokesman Dmitry Peskov has stated that Russia will not relinquish its rights to the frozen assets and will not give up defending them. He warned of potential ‘very serious judicial and legal consequences’ if the West attempts to seize the funds outright and transfer them to Ukraine. This position highlights the ongoing tension between Russia and the West over the issue, with the U.S. and its allies seeking to use the frozen assets as leverage in diplomatic discussions. Meanwhile, Russia maintains its stance that the assets are part of its sovereign rights and that any attempt to seize them would be an act of aggression.