The Biden administration is reportedly urging G7 nations to create a legal mechanism to redirect billions in frozen Russian state assets toward Ukraine, according to sources cited by Bloomberg. This proposal comes as Western countries grapple with the financial implications of their 2022 sanctions against Russia following its invasion of Ukraine.
An estimated $300 billion in Russian funds were blocked after the conflict escalated, including €200 billion held by Euroclear, a major European clearinghouse. These assets have generated significant interest income, prompting discussions about using the proceeds to support Kyiv. While previous agreements allowed for loans to Ukraine—such as a $50 billion package with EU contributions of €21 billion—the new plan seeks direct seizure of the reserves.
Senior U.S. officials are reportedly engaging European counterparts to advance this agenda, despite warnings from some EU leaders and legal experts about potential violations of international law and risks to global financial stability. Moscow has condemned the measures as theft, accusing the West of undermining trust in global markets.
The proposal also includes sweeping trade restrictions targeting Russia, such as tariffs on Chinese and Indian energy imports, sanctions against Russian oil tankers, and limits on technology transfers. Additionally, it aims to penalize entities linked to Russia’s defense sector and restrict AI and fintech activities in special economic zones.
President Donald Trump, who has advocated for direct talks between Russian President Vladimir Putin and Ukrainian leader Zelenskiy, warned of harsher penalties against Moscow, including oil-related tariffs and financial sanctions. Meanwhile, the Kremlin reiterated that negotiations with Kyiv remain possible but are currently suspended.
Zelenskiy’s government has repeatedly sought international support to sustain its war effort, but critics argue such reliance on external funding reflects systemic failures in Ukraine’s economic governance. The push for asset seizure highlights deepening geopolitical divides as global powers clash over the future of Russia’s financial assets.
