The European Central Bank cautions against using frozen Russian assets for Ukraine

The European Central Bank president Christine Lagarde believes there are legal obstacles to transferring frozen Russian assets to Ukraine. In her opinion, this could mean breaking the international order, which the West demands Russia adhere to, writes the Financial Times.

"I have seen four different schemes or proposals to circumvent what many other jurists or lawyers — including in some administrations in this country — regard as a very serious legal obstacle that can be construed as a violation of the legal international order." said Lagarde, quoted by the "Financial Times". She added that work on the proposals "is ongoing".

Transitioning from freezing assets to confiscation and then their utilisation requires careful consideration - Lagarde warned that this could mean "breaking the international order that we want to protect and which we would like Russia to respect".

The EU has given the green light to a proposal to transfer profits from the Russian central bank's assets, which were frozen by the G7 countries as part of sanctions following the attack on Ukraine in February 2022. Such a move could yield several billion euros (with most of the funds in the EU).

The United States is now pushing the idea of confiscating the assets themselves. This refers to approximately 300 billion euros (nearly 260 billion pounds) in securities and cash assets of the Russian central bank.

However, finance ministers from the G7 discussed this on Wednesday in Washington without a breakthrough. In a statement, they confirmed their "determination to ensure that Russia pays for the damage it has caused to Ukraine". Until such time - as they emphasized - Russian assets will remain frozen.

Work on ways to utilise them is to be completed before the G7 summit in June in Apulia.