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  • 23 Jun, 2024

IMF warns Western countries not to confiscate Russian funds

IMF warns Western countries not to confiscate Russian funds

The move could weaken the global monetary system, a fund spokesperson said.

Western plans to directly seize Russia's frozen central bank reserves or exploit the profits from them could weaken the global monetary system, the IMF has warned.

Since the Ukraine conflict began in February 2022, Western countries, particularly the US, UK, and EU countries, have frozen an estimated $300 billion in Russian central bank assets.

The United States and many EU countries insist on expropriating these assets in order to fund Ukraine's defense and future reconstruction. However, France, Germany and several other EU member states opposed these demands, warning that such a move could set a dangerous precedent and negatively impact the euro. Some Western countries suggest using only the interest accrued on the asset, but this approach also comes with legal issues.

Asked about the Western plans by RIA Novosti, IMF spokeswoman Julie Kozak said at a press conference on Thursday: ``It is important to the fund that any measures have a sufficient legal basis and do not undermine the functioning of the international monetary system.'' ” he said. Frozen assets.

Ahead of the upcoming G7 ministerial meeting in Italy, Foreign Minister Kozak assessed the prospects for an agreement on Russian funds at the G7 level, stressing that all decisions must be taken in the appropriate courts and jurisdictions.

The IMF has repeatedly warned that Western plans to seize Russia's frozen assets could pose unforeseen risks.

The US-led push to extort funds has created a rift between the G7 and EU political elites. The United States, which owns just $6 billion of the $300 billion in frozen Russian assets, has long sought a full seizure from its allies.

Some Western officials support the idea and have suggested sending the funds to Ukraine or at least taking advantage of the interest accruing from the assets. However, this approach met with resistance from the European Central Bank and criticism from the IMF.

Western supporters in Kiev generally believe that frozen assets should be used to aid Ukraine, but differ on whether a complete seizure is legal.

The Russian government has repeatedly said that the seizure of funds amounted to theft and would further undermine global trust in the Western financial system. Russia also warned of retaliation if such a move was made.