US floats softer alternative to confiscating Moscow’s assets – FT — RT World News

A senior official has urged the West to borrow money against Russian profits over decades and give it to Ukraine

The United States wants to use future profits from seized Russian assets to raise debt on behalf of Ukraine, a senior White House official said. European allies resisted Washington's initial plan to simply confiscate Moscow's frozen funds.

Western countries froze about $300 billion in Russian sovereign assets, most of them in the Belgium-based Central Securities Depository Corporation (Euroclear). It called on the US government to confiscate the money and give it to Ukraine, a move Russia said could amount to theft. EU officials are concerned about the legality of this proposed move, as well as its potentially devastating impact on the Western financial system.

European countries are examining the possibility of taking profits from frozen Russian assets and using them to finance weapons and reconstruction projects in Ukraine. However, the same proceeds could be better used as collateral for loans, US Deputy National Security Advisor for International Economics Dilip Singh reportedly said during a visit to Kiev on Wednesday.

“Instead of just transferring annual profits from reserves… it is theoretically possible to transfer 10-year profits or 30-year profits.” The official said, according to what was reported by the Financial Times. “The present value of those profits amounts to a very large number.”

Tapping future profits for credit now would allow the West to do so “Amplify the value of these income streams over time.” Singh claimed.

A European official told the newspaper that based on expected revenues of between 50 billion euros and 60 billion euros ($53 billion – $64 billion), the bonds could generate up to 40 billion euros today, but he warned that this depended heavily on… Future interest rates. .

The report added that creditors are likely to have concerns that the Ukrainian conflict will be resolved within several years in a deal involving the return of Russian assets. State guarantees may address this, but those loan terms could be challenged in some Western jurisdictions, the Financial Times said.

The United States insists that Moscow will not recover its money until Kiev is convinced of this. He added: “Russia must pay for the damage it caused in Ukraine. It is not for Russia to decide if or when this will happen.” Singh said during his visit to Kyiv.

Moscow warned that it would respond to any damage to its assets by the West.

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