Frozen Russian assets could be ‘easy’ Ukraine funding, says US special envoy

Ukraine has pushed for the West to seize US$300 billion in frozen Russian assets to pay for the war-torn country’s reconstruction
Penny Pritzker, US special envoy for Ukraine’s economic recovery, said the G7 has asked ministers to study if Russian assets could be used for Ukraine

World Economic Forum

Agence France-Presse

Published: 7:14am, 16 Jan 2024

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The US special envoy for Ukraine’s economic recovery said on Monday that tapping frozen Russian assets would be an “easy” source of money for Kyiv, but the G7 must first agree collectively to do it.

Penny Pritzker spoke on the sidelines of the first day of the annual meeting of global elites in Davos, Switzerland, where the war in Ukraine figures highly on the agenda.

Ukraine has pushed for the West to seize US$300 billion in frozen Russian assets to pay for its reconstruction.

Swiss President Viola Amherd, right, and Ukraine’s President Volodymyr Zelensky in Kehrsatz near Bern, Switzerland on Monday. Photo: AFP

Ukrainian President Volodymyr Zelensky, who will address the World Economic Forum on Tuesday, said after talks with Swiss President Viola Amherd in Bern that the fate of Russian assets was an “urgent issue”.

But G7 (Group of Seven major advanced economies) have said any confiscation is fraught with legal problems.

Diplomats say the United States backs such a move but has faced resistance from Europeans, who fear that Russia and other players will stop trusting the West as a safe place for their money.

“I think there’s enormous hope that the Russian sovereign assets could become an easy source of financing,” Pritzker said at the Ukraine House, whose organisers include the foundation of Ukrainian businessman Victor Pinchuk and asset manager Horizon Capital.

She said the G7 has asked ministers to study if Russian assets could be used for Ukraine.

“The whole thing is very complicated. And the first thing you know is a tonne of lawyers need to get involved,” Pritzker said.

A “legal theory” is needed, along with legislation and a decision on who would oversee the process.

She said the United States would not go it alone and a “collective decision” must be made.

“There’s real work going on and real effort and real intention, but we’re far from a conclusion,” she said.

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At the same talk, French President Emmanuel Macron’s envoy for Ukraine reconstruction, Pierre Heilbronn, noted that two-thirds of the estimated US$300 billion of Russian assets are concentrated in Europe.

“We’re very clear in effect on the fact that there should be a G7 more or less common position on that,” Heilbronn said.

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Pritzker also sought to reassure Ukrainians, who worry about war fatigue among allies, that the Washington would continue to provide aid to Ukraine despite “uncertainty” over US and European help.

Republicans have blocked US President Joe Biden’s bid for more funds for Ukraine, and Donald Trump, who has spoken out against the US military support for Ukraine, is favourite to be the Republican candidate against Biden in the November presidential election.

“It’s easy for us to become fractured and we have to be careful because that’s exactly what [Russian President Vladimir] Putin would like us to do, is to start bickering among ourselves,” she said.

“I want to give reassurance to Ukrainian people that the American people and America is there for you, even though our politics and democracies can be very complicated,” she said.