The two countries that head different spectrums of the world, the USA in the West and Russia in Europe, are now on an asset-confiscation battle royale. Over the years, the USA has thrived on imposing sanctions on any country they deem fit.
However, since the war broke out between Ukraine and Russia, Russian leaders led by Vladimir Putin have purposed to walk out of the financial and political control that comes with the ‘great America.’
Russia and the USA’s asset confiscation battle royale
Reports have it that Russia has said it currently has the right to confiscate all Western assets in the country. These assets are worth north of $288 billion. How has this come to be? Reports have it that the United States just passed a law to confiscate Russian assets and give them to beloved Ukraine.
Let us get the facts right. Recent reports from Washington DC reveal that the aid package signed by President Joe Biden includes provisions that grant the administration the authority to confiscate Russian state assets within the U.S. These assets can then be used for the benefit of Kyiv, Ukraine.
It is possible that Ukraine could receive an additional $5 billion in assistance, which would come from the frozen Russian Central Bank holdings in the United States. The seizures would be conducted in accordance with the provisions of the REPO Act, which were included in the aid bill to promote the rebuilding of economic prosperity and opportunity for Ukrainians.
However, it is improbable that the United States will confiscate the assets without obtaining consent from other members of the Group of Seven nations and the European Union.
At the onset of Russia’s invasion of Ukraine, the U.S. and its allies promptly placed a freeze on $300 billion in nation’s foreign holdings. The used funds have remained untapped, primarily in European Union countries, while the conflict continues. However, approximately $5 billion of it is situated in the United States.
The frozen assets are currently immobilized and cannot be accessed by Moscow. However, it is important to note that they still belong to Russia. Some individuals argue that using global finance as a weapon against Moscow could have consequences for the U.S. dollar’s position as the leading global currency. This comes on the back of the BRICS strengthening front.
Russia’s response – Putin is done playing
In response to the new bill package, officials from Moscow have indicated the country officially has grounds to confiscate Western assets. An ally of President Vladimir Putin warned Europe that the country has already drafted legislation to retaliate if nearly $300 billion of their assets that were seized by the West and used to help Ukraine.
Washington has passed a law on the confiscation of Russian assets in order to provoke the EU to take the same step, which will be devastating for the European economy […] Our country now has every reason to make symmetrical decisions in relation to foreign assets.
Vyacheslav Volodin, the Duma speaker and close ally of President Vladimir Putin (As reported by Reuters)
According to Putin, the West has been responsible for what he perceives as an economic war against the country he heads. However, he has emphasized the strength of the country’s economy, which experienced a growth rate of 3.6% last year. Additionally, he believes that the sanctions imposed on Russia have not succeeded in halting Russian trade.
The Kremlin has consistently emphasized that any confiscation of its assets would contradict the principles of free markets advocated by the West. Moreover, it argues that such actions would erode trust in the U.S. dollar and euro, discourage international investment, and undermine confidence in Western central banks.
