West split over Russian asset seizure proposal

Instead, the G7 nations are looking at other ways to leverage Russian assets. In February, Belgium proposed a plan that would see some 190 billion euros in Russian central bank reserves held by Euroclear used as collateral for aid loans to Ukraine.

According to the paper, Saudi Arabia and Indonesia are lobbying against the use of Russian assets due to concerns about their own reserves held in the West.

The group of countries supporting the seizure of all Russian assets, led by the United States, believes that this would be a major financial incentive and could contribute to Kiev's victory in the conflict.

But opponents say it could set a dangerous precedent in international law, threatening the global order. In addition to Saudi Arabia and Indonesia, several other countries, including Japan, France, Germany, Italy and even the European Union (EU), are also showing extreme caution, leading to a stalemate.

European Central Bank President Christine Lagarde warned that “moving from freezing assets to seizing and executing them could undermine the international order that we want to defend and that Russia wants to respect.”

The EU is also concerned about the safety of European assets held in Russia, as Moscow has pledged to retaliate if the G7 moves to seize Russia's foreign exchange reserves.

Speaking in Sao Paulo in February, Italy’s Finance Minister Giancarlo Giorgetti, whose country holds the G7 presidency this year, said it would be “difficult and complicated” to find a legal basis for seizing Russian state assets. His French counterpart, Bruno Le Maire, was even more blunt, saying there simply was no legal basis for such a move.

“The risk is that if we start ignoring international rules, other countries might do the same to us, and we will set a precedent that could have unintended consequences down the road,” said Philippa Webb, author of a European Parliament study on the legality of Russian asset seizures.

The foreign aid package passed by the US Congress last week gives the Biden administration the power to seize Russian assets held by the US.

However, Europe points out that it would be easier for the US to adopt a tough stance because the US only holds $5 billion in Russian state assets.

April 29,Reutersreported that the seizure of some $320 billion in Russian assets abroad could cover Ukraine's wartime needs until 2028.