Treasury Secretary Janet Yellen rejected Russian President Vladimir Putin‘s characterization that seizing frozen Russian assets was equivalent to theft.
In an appearance on ABC’s This Week, Yellen outlined the Biden administration‘s position on the issue and argued that using Russian assets to send further aid to Ukraine was appropriate.
“There is no sense at all in which it’s theft,” she said. “The Russian assets remain in this institution. They’ve been impounded. The investments that Russia had have matured. So, Russia’s funds are sitting in cash, but they’re generating income for the institution, which Russia has no claim on.”
“So, there’s no legal issue here,” Yellen continued. “And our allies, our partners, the G7, will provide Ukraine a $50 billion loan, which will be repaid over time from these proceeds. And I’d say the G7 leaders had already made it clear that they will not unfreeze these assets until Russia pays for the damage that it’s cost Ukraine.”
She further argued that such a move was needed to signal Western resilience in supporting Ukraine during its war with Russia.
“And we’re really in a battle of wills with Putin,” Yellen said. “Putin, I think, believes that our coalition will crumble in the sense we won’t go on providing Ukraine with the resources that they need to fight this war and to keep their economy running. And this is a way of showing that we have the capacity and the will to do so.”
The United States froze roughly $280 billion in assets following Russia’s invasion of Ukraine in February 2022. The assets represent funds Russia’s central bank held in banks outside of the country. The property of several Russian oligarchs linked with the Kremlin was seized as well, including a fleet of yachts.
The latest proposal from the G-7 would issue a $50 billion loan to Ukraine, which would then be paid off using windfall profits from the frozen Russian assets, which are accruing about $3 billion per year.
Putin slammed the deal as “theft” and vowed retribution.
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“Despite all the chicanery, theft will certainly remain theft. And it will not go unpunished,” Putin said, according to Reuters. “Now it is becoming obvious to all countries, companies [and] sovereign funds that their assets and reserves are far from safe in both the legal and economic sense of the word. … Anyone could be next in line for expropriation by the U.S. and the West.”
Following the Russian invasion of Ukraine, the United States and much of the West hit the Russian state with an unparalleled series of sanctions aiming to cripple Russia’s economy.