The United States has proposed to its allies in the Group of Seven (G7) to establish a special company to issue bonds worth at least $50 billion, backed by profits from frozen Russian sovereign assets, and to use the proceeds to support Ukraine.

According to reports from Bloomberg, citing sources familiar with the plan, the proposal involves pooling $280 billion of assets from the Russian central bank, which have been immobilized by G7 countries and the European Union, into a special purpose vehicle, the profits from which will secure so-called “freedom bonds.”

More than two-thirds of Russia’s frozen assets are held in the EU, where they generate approximately $3.6 billion in net profit annually. The proceeds from potential bond placements would nearly equal the $60 billion in US aid that remains stalled in Congress.

Discussions are said to be in the early stages and ongoing, with some G7 countries, including Germany and France, expressing reservations about the new idea, according to another source. Efforts could potentially yield much more than $50 billion, according to one interlocutor. Some EU countries, notably Estonia, have urged allies to be bolder and seize these assets.

Previously, the G7 had stated that the assets would remain frozen until Russia agreed to compensate Ukraine for the damages inflicted.

The US argument is that there is a need to develop an option that would maximize income from frozen assets and anticipate the value of unexpected profits to provide greater support to Ukraine more quickly.

As reported, some Western banks have begun to lobby against the EU’s proposal to redistribute billions of euros in interest received from frozen Russian assets, fearing it could lead to costly legal disputes.

Austrian Chancellor Karl Nehammer has recently stated that Vienna opposes the idea of using profits from frozen Russian assets to finance weapons for Ukraine.

At the same time, German Chancellor Olaf Scholz and Belgian Prime Minister Alexander De Croo supported the idea of using revenues from Russian assets for military aid to Ukraine.

Click here for more on Russia Sanctions at EU Today

___________________________________________________________________________________________________________