'Moral case' to unlock frozen Russian assets for Ukraine aid, Janet Yellen says

US Treasury chief says the funds should be used for Ukraine's resistance and reconstruction after the war

The superyacht Amadea was seized by the US from a sanctioned Russian oligarch. The G7, EU and Australia have frozen about $282 billion in Russian assets since Russia invaded Ukraine. AP
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US Treasury Secretary Janet Yellen said the world's most advanced economies have a moral obligation to unfreeze Russian assets to aid Ukraine's resistance and recovery after the war.

“While we should act together … I believe there is a strong international law, economic and moral case for moving forward,” Ms Yellen said at the G20 summit in Brazil.

The G7, EU and Australia have frozen about $282 billion in Russian assets since Moscow ordered the invasion of Ukraine two years ago, with two thirds of those sitting in EU territory.

Most are at the Belgian clearing house Euroclear, which has expressed scepticism of using the frozen assets to finance Ukraine's defence and postwar reconstruction.

While western nations have agreed to withhold the funds until after the war, they are still debating how to use them.

“I believe the G7 should work together to explore the number of approaches that have been suggested for unlocking their economic values,” Ms Yellen said.

The Treasury Secretary said one course of action could be seizing the assets themselves or using them as collateral to borrow from global markets.

Ms Yellen noted a risk to financial stability “if there were a massive shift away from currencies”, but said this was highly unlikely if the coalition acts in unity.

“Realistically, there are not alternatives to the dollar, euro [or] yen, so I'm not too worried about that,” she said.

“There are risks … and we're working to revalue these risks and to outline possible options for consideration.”

G7 members were expected to hold talks in Brazil on support for Ukraine as the war enters its third year.

President Joe Biden's administration has sought to display its continued support for Ukraine even as progress on a $61 billion security package for Kyiv has reached an impasse in Congress.

The US marked the second anniversary of the start of the war in Ukraine last week by imposing sanctions against more than 500 Russian targets, its largest single-day sanctions package since the conflict began.

As American aid to Kyiv has dried up, Russian President Vladimir Putin's forces have made inroads in Ukraine, including in the town of Avdiivka.

Ukrainian President Volodymyr Zelenskyy has said “there is hope for Congress” to approve the security assistance funding.

Mr Zelenskyy arrived in Riyadh to meet Saudi Arabia's Crown Prince Mohammed bin Salman on Tuesday as part of efforts to secure more funding and support for his peace plan to end the war.

Updated: February 28, 2024, 5:54 AM