IMF comments on handing over Russian assets to Ukraine

Any move must have a sufficient legal basis, the agency’s spokesperson has said

FILE PHOTO: International Monetary Fund (IMF) logo is seen in Washington DC, United States. ©  Celal Gunes / Anadolu Agency via Getty Images

Western plans to use Russia’s frozen central bank reserves in Ukraine may undermine the global monetary system, the International Monetary Fund has stated. Responding to a question from RIA Novosti about the IMF’s view on the G7’s plans for the assets, IMF spokeswoman Julie Kozack said any move regarding the assets must have a sound legal basis.

The and a number of EU nations have been looking for ways to use the funds to finance Ukraine’s military and future reconstruction.

“We have made our position clear and open. The IMF believes that any actions taken must have a sufficient legal basis and do not undermine the functioning of the international monetary system,” RIA Novosti quoted Kozack as saying at a press briefing on Thursday.

Kozak made similar statements in April and May, as did the director of the IMF European Department, Alfred Kammer, and IMF First Deputy Managing Director Gita Gopinath.

READ MORE: West closer to tapping $300bn in frozen Russian assets – US 

The EU and G7 nations have blocked an estimated $300 billion in assets belonging to the Russian state since the start of the Ukraine conflict in 2022. The bulk of this amount, nearly €197 billion ($214 billion) is being held by Belgium-based clearinghouse Euroclear. The securities depository reported earlier this year that the sanctioned assets it holds accumulated roughly €4.4 billion in interest in 2023.

The US and its allies are nearing an agreement on plans to provide Ukraine with a multibillion-dollar loan which would be serviced from the profits accrued from frozen Russian sovereign assets, US Treasury Secretary Janet Yellen said earlier this week.

G7 leaders will tackle the issue at the group’s summit in Italy next week.

Kiev’s Western backers generally agree that the frozen assets should be used to aid Ukraine, but the EU’s financial regulator has warned that the move could have serious legal risks.

READ MORE: SPIEF 2024: West ‘shooting itself in the foot’ with Russian sanctions, says finance minister

European Central Bank President Christine Lagarde warned in April that any plans to use Russian assets or profits from them would undermine the international rule of law, with unforeseeable consequences.

Russia has said that any actions taken against its assets would amount to “theft,” stressing that seizing the funds or similar moves would violate international law and lead to retaliation.

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