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| The West legally forces Russia to 'pay the price', using Moscow's assets to lend to Ukraine. (Source: Ukrinform) |
At the recently concluded Summit in Italy, the Group of Seven (G7) of the world's leading industrialized countries sought every legal way to force Russia to compensate Ukraine for at least $486 billion in damages caused by its special military campaign.
According to World Bank (WB) calculations, these losses have now exceeded 486 billion USD.
“It is not right for Russia to decide whether and when it will pay for the damage it has caused in Ukraine. Russia’s obligations under international law to pay for the damage it has caused are clear and so we continue to consider all possible legal avenues for Russia to meet those obligations,” the G7 document said.
To this end, G7 leaders have formally agreed to deploy loans to Ukraine from the Extraordinary Revenue Enhancement (ERA), “to provide approximately $50 billion in additional financing to Kiev by the end of this year.” The loan is expected to be secured by future profits from frozen Russian assets in Europe and the United States.
“We confirm that, in accordance with all applicable laws and our respective legal systems, the resolution reached after the G7 Summit will remain in place, and that Russian sovereign property in our jurisdiction will remain immovable until Moscow ends its military conflict with Ukraine and “pays” for the damage it has caused to Kiev. We will remain united in our commitment to provide this assistance to Ukraine,” the statement said.
The $50 billion in funding will be disbursed through multiple channels to direct funds toward Ukraine's military, budgetary and reconstruction needs.
It is understood that the multi-agency donor coordination platform for Ukraine will be enhanced “to help coordinate the disbursement of funds and ensure they are aligned with Ukraine’s highest priority needs at a pace that the country can effectively absorb.
The G7 leaders also reaffirmed their commitment to put more pressure on Russia to prevent it from using its energy and other commodity revenues to perpetuate the conflict. To do so, the G7 will strengthen sanctions, other restrictions and measures to limit the price of Russian oil.
On June 11, Nikkei Asia also reported that the G7 will establish a fund to support Ukraine using profits generated from frozen Russian assets.
Currently, Western countries have frozen about $300 billion in Russian assets, but they only have access to the income generated by those assets, about $3.2 billion a year. So by creating a fund that allows loans to be repaid with this income, Western countries could immediately provide much more than that amount to Ukraine.
Meanwhile, The Kyiv Post reported that the US proposed to completely seize Russian assets under the recently passed “Repo for Ukrainians Act”, but the EU hesitated due to concerns about the legal and financial pitfalls of seizing such assets. Instead, Brussels sought to use the profits generated from the frozen assets and transfer them to support Kiev.
Earlier, NATO defense leaders, who had just concluded a ministerial meeting at the alliance's headquarters in Brussels, agreed on a long-term plan to support Ukraine and train its military. However, according to Secretary General Jens Stoltenberg, they have yet to reach an agreement on regular financial contributions to sustain the efforts.
Regarding the West's determination to use frozen Russian assets, Moscow has repeatedly stated that any actions against its assets will be considered "theft" and a violation of international law. Moscow has warned that it will respond in kind if the West threatens to seize Russian assets.
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