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France says no to US on the seizure of Russian assets

Suggestion that West monetizes Moscow's frozen assets said to be without legal basis

By JONATHAN POWELL in London | China Daily Global | Updated: 2024-03-01 09:12

French Minister for Economy, Finance, Industry and Digital Security Bruno Le Maire at the Elysee Palace in Paris, France, Feb 27, 2024. [Photo/Agencies]

French Finance Minister Bruno Le Maire has contested the United States' stance on monetizing frozen Russian assets, revealing divisions among G7 countries over the issue.

"I want to be very clear: We currently have no legal basis for the seizure of Russian assets," Le Maire said on the sidelines of a gathering of G20 finance ministers in Sao Paulo, Brazil, on Wednesday.

His comments highlight geopolitical tensions at the event and discord among close allies on how to handle Russian assets blocked by Western powers since the outbreak of the Russia-Ukraine conflict in 2022, Reuters commented.

"We need to keep working ...The G7 must act in compliance with the rule of law," Le Maire was quoted by Agence France-Presse as saying.

"This legal basis must be accepted not only by European countries, not only by G7 countries, but by all member states of the world community, and I mean by all the member states of the G20. We should not add any kind of division among the G20 countries."

The G7 finance ministers, who met ahead of G20 discussions, deliberated on whether the frozen assets could be utilized to aid in the reconstruction of Ukraine.

On Tuesday, US Treasury Secretary Janet Yellen expressed her belief that there existed a robust legal foundation in international law to extract value from the Russian assets, which amount to about $300 billion, either through collateral or seizure.

'Insufficient grounding'

Le Maire's comments assert that France firmly believes there is insufficient grounding in international law to proceed with the seizure of Russian assets, and emphasize the need for further deliberation.

Any actions must be firmly rooted in international law and must garner the backing of all members of the G20 major economies, including Russia, he said.

Russia's Foreign Ministry previously denounced the freezing of Russian assets in Europe as theft, saying the actions targeted not only private individuals' funds, but also Russian state assets. Russia has warned of retaliation should the West move forward with the seizure of the assets.

Experts cited by Reuters said the process of unlocking value from the assets could extend over a year or more. For this to happen, most, if not all, countries possessing Russian assets would need to enact domestic legislation to enable such actions.

G7 officials have been grappling more than a year to determine the fate of Russian sovereign assets frozen following the conflict in Ukraine. G7 leaders have set a deadline for proposing potential resolutions by June.

The European Commission has suggested using interest accrued on the assets, leveraging the funds as collateral for loans for Ukraine, or providing direct financial assistance to Ukraine.

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