On Wednesday, French Finance Minister Bruno Le Maire publicly stated that he did not share the opinion of U.S. Treasury Secretary Janet Yellen on the legality of monetizing about $300 billion of frozen Russian assets in favor of Ukraine. This revealed deep differences between the Group of Seven countries. Reuters writes about it, UNN reports.
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According to the newspaper, Le Maire made this statement after a meeting of the Group of Seven financial officials. He rejected the US position and said that France is convinced that there are no sufficient grounds in international law to withdraw Russian assets, and further work is needed in this direction.
He insists that any such steps must be fully based on international law and require the support of all members of the Group of 20 major economies, which also includes Russia, China, and other countries that also criticize the United States.
We do not consider the current legal framework to be sufficient. ... This legal framework should be adopted not only by European countries, not only by G7 countries, but by all member states of the international community, and I mean all G20 member states. We should not add any kind of divisions between the G20 countries.
According to the French minister, a broad international consensus is needed.
Le Maire also argues that the European Union's use of windfall profits from frozen assets has already been a significant step forward. His point of view is supported by German Finance Minister Christian Lindner.
Lindner told reporters that he favors using the interest earned from frozen Russian assets to support Ukraine in its war against Moscow. He also called it "a realistic step that is legally sound and can be implemented quickly." As for Yellen's views on the theory of countermeasures against Russia, he told Reuters that the big concern is that international law provides sovereign immunity.
Canadian Finance Minister Chrystia Freeland said unequivocally on Tuesday that Canada agreed on the urgent need to move forward with the confiscation of frozen Russian sovereign assets to help Ukraine. Freeland added that she had a long conversation with the U.S. Secretary over the weekend about this issue, and concluded by saying: "We agree with her 100%.
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G7 officials have been trying for a year to agree on what to do with Russian sovereign assets that have been immobilized since Moscow's invasion of Ukraine in February 2022. G7 leaders asked for possible decisions to be made by June.
Their debate this week on the sidelines of the G20 finance ministers' meeting in São Paulo showed that there is still much to be done.
On Tuesday, Yellen told reporters that there are "strong international legal, economic and moral arguments" for extracting value from Russian assets, either by confiscating them outright or using them as collateral, and that the "countermeasures theory" justifies such actions under international law.
Ellen insists on the urgency of helping Ukraine after military setbacks in its two-year fight against Russian invasion.
However, experts say that it may take a year or more to unblock Russian assets until the legal framework is settled. Most, if not all, of the countries holding Russian assets will need to adopt national legislation to make such actions possible.
On Tuesday, Yellen acknowledged these risks, but downplayed concerns among some Europeans that seizing Russian assets would undermine the role of the US dollar, euro or Japanese yen as important global reserve currencies.
Naturally, Russia is not happy with the possibility of their assets being confiscated in favor of Ukraine. russia has even threatened large-scale retaliation if the West continues to seize its assets.
However, despite the public controversy, one Western official, who did not wish to be quoted, said that the G7 officials are in solidarity that Moscow should pay for the damage caused. The official noted that a growing number of legal experts are confident that there is a legal way to seize the frozen assets.