London and Ottawa may join EU plan to use Russian assets – media

The UK and Canada are set to join the EU's plan to provide Ukraine with loans from frozen Russian assets, Bloomberg has said, citing sources.

" The UK and Canada will join a European Union plan to tap a portion of the almost $300 billion in Russian central-bank assets held by Group of Seven nations, in an effort to ramp up their financial support to Ukraine," the agency writes, citing sources.

It is noted that the EU, according to the agency's interlocutors, is close to concluding an agreement that would allow it to issue loans to Ukraine using a mechanism that does not involve the seizure of assets.

According to the latest data from the UK Foreign Office, the UK sanctions have frozen Russian assets worth more than GBP 25 billion ($33.3 billion), and the EU is holding back about EUR 200 billion ($232 billion). Until now, funding that has flowed to Ukraine from frozen Russian assets has been limited to profits and interest accrued on them. Most of them are held through the Belgian clearing house Euroclear, which has drawn reluctance from Belgium and other countries.

"We are ready to progress towards using, in a coordinated way, the value of the immobilized Russian sovereign assets to support Ukraine’s armed forces and thus bring Russia to the negotiation table. We aim to do this in close cooperation with the US," the E3 leaders said in a statement on Friday. "We agree to develop further bold and innovative mechanisms to increase the cost of Russia’s war and ramp up pressure. This includes driving forward action on the Russian shadow fleet."

It was previously reported that the European Commission is considering the possibility of using around EUR 170 billion of frozen Russian assets currently held in the Euroclear financial depository in Brussels. It is assumed that EUR 140 billion of these funds will go to a reparations loan to Ukraine. The issue is expected to be discussed at the EU summit on October 23-24.

Meanwhile, Politico previously reported that Belgian Prime Minister Bart De Wever expressed concerns about such plans at a recent informal EU summit in Copenhagen. He said that the European Commission's scheme for using frozen Russian assets is essentially tantamount to confiscation. According to him, "the difference between a 'reparations loan' and confiscation is actually insignificant, and if these assets remain frozen for a long time, such a scheme can be regarded as quasi-confiscation." De Wever demanded more guarantees for his country from the European Union, pointing to the possible legal consequences of such a step. The media noted that the leaders of a number of other countries also have concerns about the proposed plan.