Russia has warned the West it has retaliation ready if the EU and US use its nearly $300billion worth of assets to fund the war in Ukraine.
Bloomberg reports an ally of President Vladimir Putin also warned the retaliation would cost the West far more than $300billion.
After Putin sent troops into Ukraine in 2022, the West prohibited transactions with Russia’s central bank, blocking around $300 billion of sovereign Russian assets in the West.
Top US officials have suggested seizing the assets to support Ukraine, although some bankers are worried that effectively stealing the assets would create a dangerous precedent.
The U.S. House of Representatives passed legislation Saturday that would allow the confiscation of Russian sovereign assets, though the lion’s share of the assets are in Europe.
“We also have a prepared answer,” Valentina Matviyenko, the speaker of the Russian upper house of parliament, was quoted as saying by state news agency RIA. “We have a draft law, which we are ready to consider immediately, on retaliatory measures.”
“And the Europeans will lose more than we do,” Matviyenko, who is a member of Russia’s powerful Security Council, said.
Matviyenko did not give specifics about the response would be.
Some US politicians want to confiscate the income from the underlying assets without taking the actual asset itself.
Putin says the West has unleashed an economic war against Russia but has underestimated the resilience of the Russian economy, which grew 3.6% last year, and the failure of sanctions of stop Russian trade.
The Kremlin has repeatedly said that any seizure of its assets would go against all free-market principles which the West proclaims. Putin has suggested it would undermine confidence in the U.S. dollar and euro, deter global investment and undermine confidence in Western central banks.
Russia says it will challenge any confiscation in court.
Some Russian officials have suggested that if Russian assets are confiscated then foreign investors’ assets stuck in “type C” accounts in Russia could face the same fate.
It is not clear how much money is in these accounts.
The speaker of the lower house of the Russian parliament, Vyacheslav Volodin, said on Monday that Russia had grounds to seize Western assets after the U.S. House of Representatives vote.
Volodin said, only $5 to $6 billion of the seized assets were in the United States while about 210 billion euros was in the European Union.
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