Joint confiscation of frozen Russian assets by Western democracies levels risks - expert

Joint confiscation of frozen Russian assets by Western democracies levels risks - expert

Ukrinform
If all Western countries as a coalition confiscate frozen Russian assets, this will eliminate all risks for them.

That’s according to Olena Halushka, co-founder of the International Center for Ukrainian Victory, member of the board of the Anti-Corruption Action Center, who spoke in a comment to Ukrinform.

"When third countries advocate against confiscation, they very often use several arguments. One of them is that they will take their reserves and transfer them to another currency. Then the question arises - which currency?... The largest share of reserves (59%) is in dollars, 20% is in euros," she said.

Halushka says another 5% of foreign exchange reserves are stored in the Japanese yen, 5% - in the British pound and Chinese yuan, and the rest of the world's currencies account for 2% and 9% of global reserves, respectively.

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"We tell our partners that, if the USA, Europe, Japan, and the UK go together, where will all these assets flow? Obviously, if there is a G7 solution, Switzerland and Australia will gravitate toward them rather than China. Therefore, the argument that Western currencies will be affected is not valid," the expert noted.

According to Halushka, the Chinese yuan is not a reserve currency, because it is not freely convertible, the Chinese financial market is not free, because there are attacks and pressure on investors in the country.

She also emphasized that only confiscation of assets by one country can potentially affect Western currencies. Then the reserves could flow, for example, from dollar to euro. That is why Ukraine proposes that a coalition come up with a decision.

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"They (opponents of confiscation - ed.) say that many might start selling off Western securities, withdrawing their funds and investing elsewhere. We come back to the problem, again - where? In UAE, Saudi Arabia, Indonesia, China, Russia? The Western financial market is so strong and dominant that it is not so easy to find a replacement for their reserve currencies and securities, to put it mildly," she is convinced.

As Ukrinform reported earlier this year, Saudi Arabia privately hinted to the G7 countries that it could sell some of its European debt obligations if the G7 states moved to confiscate Russia's frozen assets.

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