Russia is preparing to mount a legal battle to prevent its reserves frozen in the West from being seized, Bloomberg News reported on Friday. An estimated $300 billion worth of Russian assets were frozen last March as part of Ukraine-related sanctions.
While Russian officials reportedly believe the risk of outright seizure is low, the Bank of Russia is working on an agreement to retain international law firms to represent the country in case the battle ends up in court, according to the outlet.
Western nations placed unprecedented sanctions on Russia following the sharp escalation of Russia-Ukraine tensions in February 2022 but have largely balked at the idea of seizing Moscow’s substantial reserve holdings.
US Treasury Secretary Janet Yellen said that seizing the funds was “not something that is legally permissible in the United States.”
However, this sentiment appears to be softening. A New York Times report from late December indicated that the administration of US President Joe Biden is “quietly signaling new support” for grabbing the assets. The article noted that the discussions come at a time when it is becoming increasingly difficult to muster financial support for Ukraine.
Moscow, meanwhile, has warned of “serious consequences” if Western states go through with the plan. Kremlin spokesman Dmitry Peskov was quoted as saying on Thursday that such a move would entail “very serious judicial and legal costs for those who make such decisions,” according to the Bloomberg News report.
A report by Roscongress, a Russian development institution, published in December, examined other instances of reserves being frozen – such as in North Korea and Iran – and found that in Russia’s case the risks of a seizure “remain low.”
The idea remains controversial even in Western policy circles. An op-ed in Bloomberg by Andreas Kluth in late December remonstrated against seizing Russia’s reserves, arguing that doing so would violate international law and would “signal to China and other countries that have tense relations with the US that their central-bank assets will be confiscated next.”
For more stories on economy & finance visit RT's business section