Seizing Russian assets would be ‘an act of war’ – Belgian PM

Confiscating Russian assets frozen in the EU would be considered “an act of war,” Belgian Prime Minister Bart De Wever has warned, according to Politico. He cautioned that the move would likely provoke a response from Moscow.

Western countries froze an estimated $300 billion worth of Russian sovereign funds following the escalation of the Ukraine conflict in February 2022. Around $213 billion of that is held by Euroclear, a Brussels-based clearing house. The frozen funds have already accrued billions in interest, of which Euroclear transferred €1.55 billion ($1.63 billion) to Kiev last July.

Speaking to reporters after a meeting of EU leaders in Brussels on Thursday, De Wever warned that seizing Russian assets would pose “systemic risks to the entire global financial system” and could trigger retaliation from Moscow.

“We’re not living in a world of fantasy. We’re in the real world, where if you take €200 billion from somebody there will be consequences,” the outlet quoted the Belgian prime minister as saying on Thursday.

De Wever’s warning comes as some EU countries including France and Spain have been pushing to confiscate Russian frozen assets as they seek to use the funds to strengthen Ukraine’s defense and improve its negotiating position in any future peace talks with Russia, the article noted.

Earlier this month, French Defense Minister Sebastien Lecornu announced that Paris will use interest accrued on Russian assets frozen in European banks to buy weapons for the Ukrainian military, a move condemned by Moscow.

While proceeds generated from the frozen funds are already being used to back a $50 billion loan for Ukraine provided by the G7, most Western nations have stopped short of directly confiscating the assets.

According to Politico, Belgium has a major stake in the issue as Euroclear is based in Brussels.

The country is reportedly concerned that handing over the funds to Kiev could expose Euroclear to additional legal claims from asset holders. Euroclear is already entangled in legal battles with several parties, many of whom have turned to Russian courts to challenge the asset freeze and demand compensation.

The International Monetary Fund has also warned that seizing the funds without a clear legal framework could erode global trust in Western financial institutions.

The Kremlin has condemned any attempts to confiscate Russian assets, labeling them “theft” and warning of serious legal repercussions. Russia has also hinted at potential retaliatory measures against Western investments in the country.