Russia has issued a stern warning to the West, declaring that it will retaliate strongly if the United States and the European Union continue with plans to seize Russian assets valued at hundreds of billions of dollars.

The US and its allies have enforced a prohibition on transactions involving Russia's central bank and finance ministry. This action has led to the blocking of around $300 billion worth of sovereign Russian assets located in Western jurisdictions.

The EU has enacted legislation to allocate windfall profits, stemming from frozen assets of the Russian central bank, toward funding Ukraine's reconstruction. This move has provoked strong condemnation from Russia, with Maria Zakharova, spokesperson for the Russian Foreign Ministry, denouncing it as theft.

Zakharova stressed that Moscow would respond firmly to the situation, characterizing the actions of the West as theft from Russia's perspective. She declared, "We view this as theft, and our response will be directed towards the thieves themselves. We will not treat them as political manipulators or overplayed technologists, but as thieves."

The European Union, in conjunction with the G7, has frozen approximately 300 billion euros worth of Russian central bank assets in response to Moscow's invasion of Ukraine. Both groups are now exploring options for utilizing these funds.

The majority of these assets, two-thirds, are situated within the EU, with Belgium's clearing house Euroclear holding the bulk of them. Presently, only taxes on the assets located in Belgium have been allocated to a specific fund for Ukraine, overseen by the Belgian government.

The recently passed law mandates that central securities depositaries, such as Euroclear, are prohibited from utilizing net profits and must segregate revenues from Russian assets.

"The decision made today, in line with the G7's stance, clarifies the legal status of revenues generated by the CSDs concerning the holding of Russian immobilized assets and establishes clear regulations for the entities managing them," stated the Council of the EU, a legislative body comprising member states.

Image source: Reuters