The simmering disagreement between the US and the European Union (EU) has now emerged, right at the right time when the European bloc wants to use that huge amount of money as a "leverage" to support Kiev.
The US has sent a straightforward message to the EU: "Lay the frozen Russian assets." This information was revealed by Polish Prime Minister Donald Tusk, in the context of the EU considering bold steps to use Russian assets for Ukraine.
After the Russia-Ukraine conflict escalated in February 2022, Western countries have frozen about $300 billion in Russia's sovereign assets, of which $246 billion is held in EU member states. For more than 2 years, this amount of money has been the focus of controversy: Should we continue to "freeze" or go further by confiscating and using it?
The EU's internal debate has been heated recently, especially after European Commission President Ursula von der Leyen proposed using frozen Russian assets to secure a "compensation loan" for Ukraine. This proposal immediately faced legal and political concerns from many sides.
Speaking after a meeting between Ukrainian and US negotiators in Berlin earlier this week, Donald Tusk said there was a very obvious difference between Washington and Brussels. According to the Polish Prime Minister, the US side has said directly: "Don't touch Russian assets".
Washington's argument, according to Tusk, is that if the EU seizes the frozen funds, Russia may be tougher at the negotiations table, making efforts to find a solution to end the Ukrainian conflict more difficult. In other words, the US sees these assets as a strategic card that needs to be kept intact, rather than used immediately.
Despite the warning, last week EU countries voted to permanently freeze Russian assets to block Hungary and Slovakia's boycott and prevent US intervention.
Not only political disagreements, legal risks are also worrying many EU countries. Belgium, which houses Euroclear, a storage agency that holds most of the frozen Russian assets, has expressed concern that it could face alone lawsuits from Moscow if the EU decides to seize or use the money.
These concerns are not unfounded. Russia has repeatedly asserted that any use of frozen assets is theft. Over the weekend, the Russian Central Bank announced that it had filed a lawsuit, demanding $230 billion in compensation from Euroclear. This is considered Russia's toughest legal move since assets were frozen.
On the Russian side, the reaction was increasingly strong. On December 15, Foreign Minister Sergey Lavrov said that "the desire to occupy seems to have eaten deep into the genes of many Western "colleagues", recalling the Western precedents that have seized the assets of Iran and Venezuela.
