MOSCOW: An ally of President Vladimir Putin cautioned Europe on Tuesday that Russia has already drafted legislation to retaliate if nearly $300 billion of Russian assets were seized by the West to assist Ukraine.
Following President Vladimir Putin’s deployment of troops into Ukraine in 2022, the United States and its allies imposed restrictions on transactions with Russia’s central bank and finance ministry, effectively blocking about $300 billion of sovereign Russian assets in the West.
Key officials in the United States are advocating for the seizure of these assets to support Ukraine, but there are concerns among some bankers and European officials about the precedent such actions would set.
The U.S. House of Representatives recently passed legislation, including a provision that could enable the confiscation of Russian sovereign assets, though the majority of these assets are located in Europe.
“We also have a prepared response,” said Valentina Matviyenko, the speaker of the Russian upper house of parliament, as reported by state news agency RIA. “We have a draft law ready for immediate consideration on retaliatory measures.”
Matviyenko, who is also a member of Russia’s powerful Security Council, emphasized that “the Europeans will lose more than we do.”
While specifics of Russia’s response remain under discussion in the West, one option being considered is to seize the income generated by the underlying assets without physically confiscating the assets themselves.
President Putin has portrayed the West’s actions as unleashing an economic war against Russia but has highlighted the resilience of the Russian economy, which grew by 3.6% last year, and the failure of sanctions to halt Russian trade.
The Kremlin has consistently argued that any seizure of its assets would contradict the principles of free markets espoused by the West, undermine confidence in the U.S. dollar and euro, deter global investment, and erode trust in Western central banks.
Russia has indicated that it will challenge any asset seizures in international courts. Some Russian officials have suggested that if Russian assets are confiscated, foreign investors’ assets held in special “type C” accounts in Russia could face similar treatment, although the extent of these holdings is unclear.
Vyacheslav Volodin, the speaker of the lower house of the Russian parliament, stated on Monday that Russia had grounds to seize Western assets in response to the actions by the U.S. House of Representatives.
Approximately 210 billion euros ($224 billion) were in the European Union, he pointed out, whereas just $5 to $6 billion of the $280 billion of Russian assets frozen overseas were in the United States.
