russias-allies-urge-eu-not-to-seize-russian-assets-for-ukraine

Russia's allies urge EU not to seize Russian assets for Ukraine

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Countries sympathetic to russia demand that the EU drop any suggestion of mass confiscation of moscow's state assets, reports UNN citing POLITICO.

Representatives from China, Saudi Arabia and Indonesia are privately urging the EU to continue resisting pressure from the US and Britain to seize more than 200 billion euros worth of Russian state assets they immobilized after the February 2022 invasion of Ukraine to help Kiev's reconstruction efforts, the four officials said. 

"These countries are very skeptical of the idea," said one official, who wished to remain anonymous because the negotiations are very delicate. The problem is that "it would set a precedent" - in other words, these countries would be afraid that they could be the next to lose.

The publication notes that at the moment any plan to seize Europe's frozen Russian assets and use the money to help Ukraine has been sidelined. Western EU countries, in particular, are fiercely resisting this, fearing legal consequences and potential destabilization of the eurozone.

But since Washington and London are interested (more so since limited budgets and muddled domestic politics mean that another way to finance Ukraine's weakening war effort and rebuilding is an attractive option), and the issue will be discussed at next month's meeting of G7 finance ministers, countries that do not consider Vladimir Putin an enemy are not complacent.

They have already seen the EU put forward a more limited proposal to withdraw profits from investing assets worth about 2.5-3 billion euros a year, with 90 percent of the proceeds going to buy weapons for Ukraine.

And this could also affect the lobbying motivation of these countries. They may not only fear a precedent, but also act on Putin's behalf, not wanting the EU to help Ukraine on the battlefield, the publication adds.

"I recognize that the Russians could have asked their friends to raise the ruckus," said a senior diplomat from a non-EU country.

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If so, lobbying in these countries will follow the same pattern as what has been observed since the beginning of the war in Ukraine, when governments that were not necessarily in favor of russia nevertheless carried out part of moscow's instructions, POLITICO writes.

For example, Turkey, China and the UAE have allowed Russia to avoid some of the Western sanctions imposed after it launched its full-scale invasion, energizing its economy and allowing it to finance its military machine.

And throughout the conflict, the Gulf states have acted as mediators, facilitating a prisoner exchange between russia and Ukraine and brokering a deal to allow grain to be exported from the war-torn country. The argument made by these countries is that seizing Russian assets could prolong the war and force them to take sides against their will.

Escalating the war and the possibility of a Russian defeat is against the interests of the Gulf states, said Theodore Karasik, senior adviser at Gulf State Analytics, a consulting firm.

"The Gulf states don't want russia to fall apart," he said, pointing to his investments in the country.

He added that using Russian assets to rebuild Ukraine could undermine their ambition to play a leading role in the country's post-war reconstruction.

The publication notes that the confiscation may also entail legal problems for these countries. According to officials familiar with the proceedings, Russian companies have already filed more than 100 lawsuits in domestic courts to unblock Western assets currently frozen in Russia.

There are concerns that these proceedings could go beyond the borders of Russia.

moscow could encourage friendly jurisdictions such as China and Saudi Arabia to attack Western assets in their own countries, potentially tarnishing their reputations in the eyes of international investors.

Experts suggest that these countries' fears that their assets in Europe could be next in line for confiscation if they fall out of favor with the West are exaggerated.

Antonina Tumanova

War

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