The Financial Times cited a leaked discussion document saying that Washington wants the European Union (EU) to indefinitely freeze Moscow's sovereign assets held by the bloc.
In return, the US is willing to lend Ukraine $50 billion, and that amount will be returned to Washington in the form of interest earned from frozen Russian assets - according to the Financial Times.
The US also wants the EU to maintain sanctions against Russian state funds until the end of the Ukrainian conflict, according to the Financial Times. The sanctions are extended every 6 months and can only be amended upon consensus.
However, such a decision would require the approval of all EU leaders, including Hungarian Prime Minister Viktor Orban, who has been a strong critic of the EU's sanctions against Russia.
The Financial Times revealed that the US is pushing for an agreement ahead of next week's G7 summit in Italy, where the issue of using Russian asset interest is expected to be the focus of discussions.
The top option being considered is to coordinate with other G7 members to provide Ukraine with a loan equivalent to the expected interest from $300 billion in frozen Russian assets by the West. The loan could be worth up to $50 billion, the newspaper quoted diplomats as saying.
Technical issues surrounding the loan, such as term, interest rate and whether it will be provided directly or through an intermediary such as the World Bank, have not yet been resolved.
According to EU documents, Washington considers any such loan conditional. It depends on how the EU allocates the proceeds from Russian assets to the US and ensures that the assets held by the Russian Central Bank in the EU remain intact until Russia agrees to compensate Ukraine for the damage, the Financial Times wrote.
The newspaper noted that such a commitment is very important because most of Russia's frozen assets are now in the Euroclear securities payment and storage center in Belgium, generating an estimated annual interest of about 3 billion euros (more than 3.25 billion USD).
The newspaper argues that if interest does not meet repayment requirements or the EU does not agree to extend sanctions, the US may not be able to recover the loan to Ukraine.
However, some EU governments are concerned about the financial impact of such a move. A source said the US would have to accept that the EU could not meet those demands.
Moscow has repeatedly warned that any action taken against Russian assets would be considered a theft and a violation of international law, and threatened with retaliation.
