Divisions among the world’s top financial officials over how to use Russia’s central bank assets to support Ukraine spilled into public view on Wednesday when Bruno LeMaire, France’s finance minister, said the seizure of frozen assets data would be a violation of international law.
The comments, made on the sidelines of a meeting of Group of 20 finance ministers in Brazil, came a day after Treasury Secretary Janet L. Yellen said asset freezes were a possibility and suggested there was legal justification. So.
Officials from the Group of 7 advanced economies have been debating for months whether they could legally seize more than $300 billion in Russian central bank assets stashed in Western nations and use those funds to help Ukraine. These discussions have become more urgent amid waning political support in the United States and Europe to continue providing Ukraine with economic and military support.
Ms Yellen, who initially had reservations about the viability of freezing or seizing Russian assets, offered her most vocal public support yet on Tuesday for the idea of ​​unlocking the “value” of Russia’s frozen assets.
“While we must act together and in a sensible manner, I believe there is a strong international legal, economic and moral case for moving forward,” Ms Yellen said.
But Mr Lemaire, who spoke just hours before a one-on-one meeting with Ms Yellen, rejected that claim.
“We do not have the legal basis to freeze Russian assets and we should never act if we do not obey international law and the rule of law,” Mr Lemaire said, according to a recording of his remarks. .
Western officials are considering various options for how they can use the Russian central bank’s roughly $300 billion in assets, most of which are in the European Union, to provide economic and military support to Ukraine. This includes the European Commission’s proposal to use the interest earned on these assets, use funds as collateral to borrow money for Ukraine, or give Ukraine the money directly.
There have been signs of growing momentum among Western policymakers to use Russia’s resources as Ukraine’s military situation worsens. Rishi Sunak, Britain’s prime minister, urged his counterparts this week to be more aggressive in their efforts to find a legal way to seize Russia’s assets. However, France and Germany have called for a more cautious approach and Russia has vowed to retaliate if its assets are seized.
In a speech before the European Parliament on Wednesday, the president of the European Commission, Ursula von der Leyen, expressed her support for the use of the profits made from these assets to help the Ukrainian army.
“It is time to start a discussion about using the windfall of frozen Russian assets to jointly purchase military equipment for Ukraine,” he said. “Ultimately this is about Europe taking responsibility for its own security.”
Some jurists have argued that nations holding Russian assets have the right to cancel their obligations to Russia and apply those assets to what Russia owes for violating international law under the so-called international law of state countermeasures.
Ms. Yellen supported the idea of ​​countermeasures at Tuesday’s news conference.
“There is a theory of countermeasures that I believe has strong justification in international law,” Ms. Yellen said, noting that Western nations have yet to enact legislation to ensure that the seizure of Russian assets complies with their domestic laws.
The finance minister refused to back an approach, saying the allies must act together.
Mr Lemaire said on Wednesday that the theory of countermeasures was insufficient.
“We really need to understand that taking such an important decision, which is the utilization of state property, needs a very strong legal basis,” he said.
He went on to argue that a move to seize Russian assets would have to have the support of the G20, a threshold that is unrealistic because Russia is a member of that group.
“We must not add any kind of division between the G20 countries,” Mr Lemaire said. “You will create more division at a time when we need more unity to support Ukraine.”
It’s Nelson contributed reporting from London and Monica Prodchuk from Brussels.
