UK minister says any move to seize frozen Russian assets must be 'legally watertight'

UK minister says any move to seize frozen Russian assets must be 'legally watertight'

By Andrea Shalal

British investment minister Dominic Johnson said he discussed the seizure of frozen Russian assets with U.S. Deputy Treasury Secretary Wally Adeyemo on Monday, and stressed that any move to do so must be done in strict accordance with international law.

Johnson said these were clearly "unique times," but it was imperative to ensure that any move was well-coordinated internationally and there were still important legal details to work out.

A U.S. Senate committee last week approved legislation that would help set the stage for the United States to confiscate Russian assets and hand them over to Ukraine for rebuilding after the destruction of the nearly two-year-long war.

The European Union, United States, Japan and Canada froze some $300 billion of Russian central bank assets in 2022 when Russia invaded Ukraine. Group of Seven countries have been studying a possible seizure of the assets as a way to have Russia pay for the damage its invasion caused in Ukraine.

U.S. and British officials have been exploring options for confiscating Russian central bank assets, but senior EU officials last week said the bloc was unlikely to do so given worries about the legality of such a move and the potential for spooking investors in euro assets.

"There's a good amount of work to do," Johnson told Reuters during his visit to Washington. "We've got to make sure that we get the detail right ... We've got to make sure these things are legally watertight."

Britain needs to protect its reputation as a "safe and stable" place to invest, he said, adding that was critical to make sure "the rest of the world feels reassured that we are sticking to the rule of law and property rights."

Russia has said confiscation of those assets would go against the principles of free markets and the Kremlin has warned it would seize U.S., European and other assets in response to such a move.

Johnson said the issue was clearly "top of mind" for Adeyemo, but said he was confident his U.S. counterparts understood the need to iron out the legal and technical details.

He said a G7 meeting later this month would be an important watershed moment for the allies' conversations on the issue, but declined to say if a breakthrough was possible.