Russia Issues Retaliation Warning Over Potential Frozen Asset Seizure by the West
Russia’s RIA news agency reciprocated on Sunday, saying that Moscow would strike back if the West took hold of its frozen assets in order to help Ukraine.
This ominous statement coincides with reports suggesting that the leaders of the Group of Seven (G7) are deliberating on the legal means to seize a substantial $300 billion in Russian central-bank assets to support the reconstruction efforts in Ukraine.
According to RIA, the European Union, G7 nations, Australia, and Switzerland collectively held $288 billion in direct investments in Russia’s economy as of the close of 2022.
This data suggests that the West has significant stakes in Russia, potentially making it vulnerable to Moscow’s retaliatory measures. However, it is important to note that Business Insider could not independently verify RIA’s claims.
Russia has staunchly opposed the idea of utilizing its seized assets for the reconstruction of Ukraine. Dmitry Peskov, the Kremlin spokesperson, labeled such an act as outright theft during a press conference on December 29. He further stated that Russia had compiled a list of foreign assets it would cease if the West proceeded with confiscating Moscow’s frozen assets.
Russian Retaliation Poses Challenges for Foreign Firms
The growing tension raises concerns about the legality of seizing frozen Russian assets, with experts warning of potential repercussions on the international financial system. Legal and foreign-relations experts suggest that such a move could undermine trust in the US dollar and the euro as reserve currencies.
Additionally, the threat of Russia retaliating by seizing assets might complicate the exit strategies for foreign companies attempting to withdraw from the Russian market. International apprehension over the Kremlin’s micromanagement of corporate exit plans surfaced in December.
The report indicated that the Russian government was scrutinizing and controlling nearly every aspect of corporate exit plans before granting approval, adding a layer of complexity for businesses looking to disengage from the Russian market.
As tensions escalate, the world watches closely, anticipating the potential economic ramifications of this geopolitical standoff and its impact on the fragile global financial landscape.
