As Russia’s devastating attacks on Ukraine increase, so does the British government propose legislation that would allow it to use frozen Russian assets to rebuild Ukraine and maintain sanctions until Moscow pays compensation to its war-torn neighbour.
The UK announcement is in line with a decision last month at the annual meeting of the Group of 7 in Hiroshima, Japan, to freeze the estimated $300 billion in Russian assets held by banks and financial institutions in those countries – including Britain – “until Russia pays for the damage it has done to Ukraine.”
The issue of seized assets is highly contentious. While governments have the power to freeze assets, the European Central Bank has privately warned Brussels that confiscating Russian funds or giving the interest earned on those accounts to Ukraine could undermine confidence in the euro and threaten financial stability. could affect, according to a report The Financial Times. Investors may be reluctant to use euros as a reserve currency if they fear their money will be stolen.
According to the latest figures from the World Bank, the European Commission and the United Nations, Ukraine’s reconstruction costs are estimated at more than $411 billion. The devastated landscape of the eastern city of Bakhmut, captured by President Volodymyr Zelensky of Ukraine at the G7 meeting, is just one sign of the damage. “You have to understand that there is nothing,” Mr. Zelensky told reporters. “They destroyed everything. There are no buildings.”
The bank’s estimate was calculated before the massive devastation caused this month by the destruction of the Kakhovka dam in southern Ukraine.
Calls to confiscate Russian assets and use them to rebuild Ukraine have increased as the war is well into its second year. Last week, the United States Senate passed a bipartisan bill to confiscate Russian assets and use them to rebuild Ukraine. And the issue is also expected to come at a Restoration Conference Ukraine Wednesday and Thursday in London.
Since Russia launched its full-scale invasion of Ukraine early last year, Britain has frozen some $23 billion in assets and imposed sanctions on 1,550 individuals. The government’s latest proposal will require people under sanctions to disclose their assets in Britain.
“Through our new action today, we are strengthening the UK’s approach to sanctions,” British Foreign Secretary James Cleverly said in a statement accompanying the announcement on Monday, “confirming the UK’s readiness to use sanctions to make sure Russia pays for repairing the country it so recklessly attacked.”