Not legal for US to seize Russian assets, says Yellen – 05/18/2022 at 18:50

by David Lawder

BONN, Germany, May 18 (Reuters) – The United States does not have the legal authority to seize frozen Russian central bank assets following the Ukraine offensive, the U.S. Treasury Secretary said on Wednesday. , adding, however, that discussions with partners were underway for Russia to pay the cost of Ukraine’s post-war reconstruction.

Janet Yellen also indicated that it was likely that the exceptional license granted to Russia to allow it to make payments to its American bondholders would not be renewed when it expires next week, which leaves Moscow a narrow window to avoid a first default on its external debt since 1917.

While the Ukraine crisis will be at the heart of this week’s G7 finance ministers’ meeting in Bonn, Germany, the US secretary said that ways are being considered to make Russia pay for the extensive damage caused in Ukraine and on its economy, after almost three months of war.

Speaking in Bonn to reporters, Janet Yellen said it was “natural that, given the enormous destruction in Ukraine, and the huge cost of reconstruction they will face, we would look to Russia to help pay at least a portion of the amount”.

Recently, the idea has been circulating that Washington will seize hundreds of billions of dollars in assets held by the Central Bank of Russia. About $300 billion in assets have reportedly been frozen by the United States and its allies since the start of the war, but they remain Russian property.

“We are starting to look at that, but it would not be legal right now in the United States for the government to seize” these assets, said Janet Yellen. “It’s not something legally permitted in the United States.”

Other ways to immediately bolster support for Ukraine are still being discussed, she said, saying she expects the US Congress to approve a new package of aid to Kyiv soon. $40 billion.

(Report David Lawder in Bonn and Rami Ayyub in Washington; French version Jean Terzian, edited by Jean-Michel Bélot)

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