Russia warns of diplomatic break with US over confiscation of frozen assets

Russian Deputy Foreign Minister Sergei Ryabkov has reiterated the threat of severing diplomatic ties with the United States if Washington proceeds with the confiscation of Russian assets frozen since the escalation of the Ukraine conflict.

In an interview with Russian media, Ryabkov emphasized that while Russia does not take escalation steps lightly, it could consider this drastic measure if the West "throws away the last decency" and intensifies pressure, Caliber.Az reports.

“I said that we never initiate such escalation steps, but if the West pushes us too far in its efforts to ‘press’ us, it could lead to this action,” Ryabkov explained. “However, this does not mean it’s an automatic decision. The option of a rupture could be considered, but we would not predetermine the outcome in such a situation,” he added.

When asked directly if the threat of cutting diplomatic ties with the US still stands, Ryabkov confirmed, “Absolutely. If they proceed with similar actions in this regard.”

The deputy foreign minister also noted that Russia could view the confiscation of its frozen assets as an escalation, particularly if it leads to further complications at the front lines in Ukraine. He pointed to ongoing Western discussions, some of which are fraught with concern about the potential consequences.

Since the conflict escalated in February 2022, the US and its allies have frozen an estimated $300 billion in Russian central bank assets, the majority of which are held at Euroclear, a Brussels-based clearinghouse. These funds have generated significant interest, about €5.15 billion ($5.55 billion) for the first three quarters of 2024.

While Western countries have allocated over $218 billion in aid to Ukraine, the aid has begun to shift from direct grants to loans. In October, the G7 finalized a $50 billion loan package for Ukraine, secured by the profits from Russia’s frozen assets. Despite calls from the US to fully confiscate these assets, the IMF has voiced opposition, warning it could undermine confidence in the Western financial system.

Moscow has repeatedly condemned the freezing of its assets as theft and warned of the legal and political consequences of such actions. Western concerns over corruption in Ukraine, which has been a longstanding issue, have further complicated the situation, with the European Commission setting up a watchdog to prevent mismanagement of the funds. Meanwhile, US oversight bodies, including the Pentagon’s inspector general, have described corruption in Ukraine as “endemic.”

By Tamilla Hasanova