Latest news with #RussianAssets
Yahoo
03-08-2025
- Business
- Yahoo
Controversy over how to use frozen Russian assets to help Ukraine
The £38m superyacht Phi should be earning her owner about £563,000 a week, hosting ultra-rich holidaymakers on trips around the sparkling Mediterranean. Instead, she is stuck at a dingy mooring in Canary Wharf, shrouded in scaffolding, her smart blue paintwork peeling and her electrics failing. And that is where, for the foreseeable future, she will stay, after the Supreme Court last week dismissed an appeal against the vessel's continued detention. More than three years after the Russian invasion of Ukraine, the judgment raised a question: what is the future of Russian assets frozen by the British state? In March 2022, Phi was in the UK having the finishing touches put to her plush interiors, which include an 'infinite' wine cellar, fluted leather wall panelling, an outdoor cinema and a freshwater swimming pool. Then Russia invaded Ukraine and the British government launched an aggressive round of sanctions against the Russian state and individuals connected to it. Since then, it has frozen £25bn of Russian-owned assets – including Phi. According to the judgment there is no evidence that her owner, Russian businessman Sergei Naumenko, has any connection to Vladimir Putin. He has not been sanctioned and internet searches reveal almost nothing about his life and business interests. The value of the Phi is dwarfed by that of other frozen Russian sovereign assets: held in Belgium, they are worth about £160bn. Nevertheless, former transport secretary Grant Shapps said detaining the yacht had 'turned an icon of Russia's power and wealth into a clear and stark warning to Putin and his cronies'. The Supreme Court's judgment, which also covered a case brought by the oil tycoon Eugene Shvidler, offered a more solid rationale: 'The very considerable income that Mr Naumenko claims that he could earn by chartering out the Phi to other wealthy people is likely to make its way to Russia,' it said. 'In this way it would be used to contribute to the Russian economy' – thus funding the Kremlin's war with Ukraine. Tom Keatinge, director of the Centre for Finance and Security at the Royal United Services Industry think tank, says this is typical of the government's approach to sanctions. In 2022, the focus was on taking headline-grabbing 'trophy' assets from big-name oligarchs. Now, this 'has shifted to a focus on how to seize for the benefit of Ukraine'. To an extent, this is working. The frozen funds have accrued interest, so even if the government can't use the assets directly, it can at least spend the interest they earn to benefit Ukraine. In June, the UK used £70m of interest payments received on frozen Russian funds to supply Ukraine with 350 missiles. UK government ministers have also stated an aim to direct the £2.5bn proceeds from Roman Abramovich's sale of Chelsea Football Club n 2022 to Ukraine. A government payment of £2.26bn into the Extraordinary Revenue Acceleration scheme, an international loan scheme designed to help Ukraine fund its war, will be repaid using profits from sanctioned Russian assets. However, physical assets, such as buildings and superyachts, are harder to manage. Phi is 'a mess', says Guy Booth, the vessel's captain. 'The paint on her hull is peeling off because it's been constantly rubbing on the fenders in exactly the same place for three years. The technical spaces are a mess, and 40% of our onboard machinery is inoperable.' Although the government's Office for Financial Sanctions Implementation (OFSI) has issued a special licence to allow maintenance of Phi, Booth says insurers won't provide cover, so he cannot take engineers on board. The Department for Transport has engaged with the insurance industry over the matter. So far, the government's options regarding tangible assets, such as Abramovich's £150m, 15-bedroom mansion on Kensington Palace Gardens, have been limited. Selling them off would be regarded as expropriation, which the government is eager not to be accused of, in order not to frighten off other international investors. Another option might be to ask oligarchs to voluntarily give up their assets. In June 2023, the government offered a route for sanctioned individuals who say they support Ukraine to 'donate their frozen funds for Ukrainian reconstruction'. However there was no offer of sanctions relief in return for such a donation. In his Mansion House speech in June, the foreign secretary, David Lammy, announced that London would host a Countering Illicit Finance Summit, which will bring countries together to work on an international solution. 'I think there could be potential in creating new laws to look at taking that from freezing to seizing, but it would need very careful balancing with property rights,' says Ben Cowdock, senior investigations lead at the Transparency International charity. 'At the moment, every country is doing something a little bit different.' In the meantime, Phi waits for the courts to decide her fate. Naumenko intends to take his case to the European Court of Human Rights, says Booth, although there is concern that she might not last if the wheels of justice turn slowly. To restore her to her former glory – with a new coat of paint, plus the electrical work and carpentry that should have been addressed during regular maintenance stops – would cost up to £8m, says Booth. There have, he adds, been a series of small fires on board, which present a risk to the residents and businesses around her mooring. Each time, 'we assemble on the quay and then we assess whether we're going to enter the ship and combat the fire, as we would if we were at sea, or whether it's better just to let it burn, and let the City of London firefighters deal with it'. A Department for Transport spokesperson welcomed Tuesday's ruling, saying: 'This decision reinforces the UK government's determination to disrupt Russia's economic war machine and return peace to Ukraine.' Photograph by Sophia Evans/The Observer
Russia Today
17-07-2025
- Business
- Russia Today
EU plan to move frozen Russian money would be ‘expropriation'
European Union plans to move frozen Russian sovereign assets into riskier investments would amount to expropriation, the Belgium-based settlement house Euroclear has warned. In an interview with the Financial Times published Wednesday, Euroclear Chief Executive Valerie Urbain said such a move could expose the EU's financial system to both legal and systemic risks. Since the escalation of the Ukraine conflict in 2022, the US and EU have frozen more than $300 billion in Russian state assets. In May, the EU approved a plan to channel profits from those assets to support Ukraine, while some member states have pushed for outright confiscation. Some $213 billion of the assets are held by Euroclear. The securities depository is currently reinvesting proceeds from Russia's maturing assets – such as coupon payments and redemptions – primarily through central banks. The G7 is using those returns to support a $50 billion loan to Ukraine. However, as profits have declined following interest rate cuts by the European Central Bank, the European Commission is reportedly considering moving the funds into higher-yield investments to boost Kiev's funding. Urbain has warned that seeking higher returns could lead to retaliation from Moscow and compromise Euroclear's central role in the global financial system. 'If you increase the revenues, you increase the risks.' Last year, Euroclear transferred €4 billion ($4.3 billion) to Ukraine, and so far this year it has paid €1.8 billion ($1.9 billion), according to Urbain. She said the EU may try to raise those amounts by creating a 'special purpose vehicle' to channel Russian assets into higher-risk investments that could bring 'more revenues.' She cautioned that such a structure would involve 'a lot of risks for Euroclear and for the European markets globally.' Legally, she said, the move would constitute 'expropriation of the cash from Euroclear' without relieving the institution of its liability to the Russian central bank, 'a position that we cannot bear.' Moscow has repeatedly warned that seizing its funds would violate international law. Legal and political concerns - particularly over sovereign immunity and property rights - have so far prevented the EU from endorsing full confiscation.
Russia Today
16-07-2025
- Business
- Russia Today
EU plan to move frozen Russian money into riskier investments is ‘expropriation'
European Union plans to move frozen Russian sovereign assets into riskier investments would amount to expropriation, the Belgium-based settlement house Euroclear has warned. In an interview with the Financial Times published Wednesday, Euroclear Chief Executive Valerie Urbain said such a move could expose the EU's financial system to both legal and systemic risks. Since the escalation of the Ukraine conflict in 2022, the US and EU have frozen more than $300 billion in Russian state assets. In May, the EU approved a plan to channel profits from those assets to support Ukraine, while some member states have pushed for outright confiscation. Some $213 billion of the assets are held by Euroclear. The securities depository is currently reinvesting proceeds from Russia's maturing assets – such as coupon payments and redemptions – primarily through central banks. The G7 is using those returns to support a $50 billion loan to Ukraine. However, as profits have declined following interest rate cuts by the European Central Bank, the European Commission is reportedly considering moving the funds into higher-yield investments to boost Kiev's funding. Urbain has warned that seeking higher returns could lead to retaliation from Moscow and compromise Euroclear's central role in the global financial system. 'If you increase the revenues, you increase the risks.' Last year, Euroclear transferred €4 billion ($4.3 billion) to Ukraine, and so far this year it has paid €1.8 billion ($1.9 billion), according to Urbain. She said the EU may try to raise those amounts by creating a 'special purpose vehicle' to channel Russian assets into higher-risk investments that could bring 'more revenues.' She cautioned that such a structure would involve 'a lot of risks for Euroclear and for the European markets globally.' Legally, she said, the move would constitute 'expropriation of the cash from Euroclear' without relieving the institution of its liability to the Russian central bank, 'a position that we cannot bear.' Moscow has repeatedly warned that seizing its funds would violate international law. Legal and political concerns - particularly over sovereign immunity and property rights - have so far prevented the EU from endorsing full confiscation.
CBS News
13-07-2025
- Business
- CBS News
Transcript: Rep. French Hill on "Face the Nation with Margaret Brennan," July 13, 2025
The following is the transcript of an interview with Rep. French Hill, Republican of Arkansas, that aired on "Face the Nation with Margaret Brennan" on July 13, 2025. MARGARET BRENNAN: We go now to Congressman French Hill. He is the chair of the House Financial Services Committee. Welcome back to the broadcast. Your ears must have been ringing with the two senators who started the program, because they were talking about grabbing some of those frozen Russian assets. You moved a bill and gave the president authority to actually seize them during the last administration, under the REPO Act. The U.S. has never before seized central bank assets from another country. Do you know if the Treasury Department is going to do so now? REP. FRENCH HILL: Well, Margaret, it's good to be with you. Yes, I certainly worked very hard with former Foreign Affairs Chairman Mike McCaul and others to put that in our 2024 national security package during the Biden administration, because we wanted another arrow in the quiver for the president to not just seize those assets, but to convert them to the benefit of Ukraine. But we could never get consensus between the United States and Europe for doing that, despite a unanimous vote of the Parliamentary Assembly of the Council of Europe supporting it. So I continued to urge President Biden to do that. We got the interest off those frozen assets to benefit Ukraine, but I think it's time for the president to convert those seized assets to a trust account for the benefit of Ukraine. I'm glad to hear both Senators Blumenthal and Graham support that idea. It's time to do it, and I've encouraged Secretary Bessent that this should be a priority for President Trump. MARGARET BRENNAN: On another topic, because you have some oversight in the financial space, I want to ask you about comments made in regard to Fed Chair Jerome Powell. The president says the economy is in good shape, but he still complains about the head of the central bank, says he's doing a terrible job because he's not lowering interest rates. On another network today, the president's top economic adviser said the White House is looking into whether the president has the authority to fire Chair Powell. Do you believe the president has the power and authority to fire the Fed president? REP. HILL: You know, Margaret, I don't, and I believe President Trump has spoken about this several times over the past few years, including recently. Mr. Powell's governorship, his chairmanship, is up next spring. The president has vacancies coming up on the Fed board, where he could name another governor. But look, just because Congress created the Fed and that we believe that it should be independent in the setting of monetary policy, it doesn't mean that it's immune from criticism. And every president since World War Two has had choice words for the Fed chair when they've not been in sync with the direction of the president. So look, the Congress continues to do oversight. I set up a special task force to oversee the Fed's decision making since the 2008 financial crisis. We have that investigation, review, and oversight underway, and we'll continue it. MARGARET BRENNAN: I think you'd acknowledge that most presidents might have those choice words behind closed doors, not on social media posts on a regular basis, Congressman. But on crypto, I want to ask you. Crypto has been the Wild West, right, in many ways, because they don't have the same kind of regulation in the digital asset space that there does exist for banks and financial services. You've got a few measures coming up this week. MARGARET BRENNAN: How do you make sure, as you put these regulations in place that kind of help crypto become more mainstream, that it doesn't also benefit some of those on the black market, for example, who use this to evade oversight? REP. HILL: Exactly. Well, in the work in the Senate led by Bill Hagerty and Tim Scott and Cynthia Lummis on the GENIUS Act to create a dollar-backed stablecoin, we've heavily influenced that legislation over the two years of previous work by the House and our Clarity Act, which sets up the rules of the road for what's a commodity, what's a security, how to use digital assets, how to store them, how to custody them. These are the rules that will protect consumers, will limit access to our market and our investors from entities outside the United States trying to influence the crypto markets. We have none of that today. What we've had is a mismatch of rules by enforcement in the Biden administration, and I believe the bills we'll have on the House floor this week will protect investors, consumers, and make America, as President Trump wants, a leader in financial technology and crypto and digital assets innovation. MARGARET BRENNAN: You know, sir, that the concern is that this is the patina of protection of consumers without actual muscle behind it. It was interesting to see, and many Americans who hold mortgages might have noticed, that Fannie Mae and Freddie Mac who buy and sell mortgages, that the head of the agency, the Federal Housing Agency, Bill Pulte, told them they'll have to prepare a proposal to review crypto as an asset on mortgage applications. MARGARET BRENNAN: Given the huge taxpayer stake in Fannie, Freddie, are you comfortable with people using crypto, something that isn't really, you know, tangible in many ways, to pay for a down payment on a house? REP. HILL: Well, look at Bitcoin, for example. One can now buy Bitcoin. It is a commodity. It's been determined that it's a commodity by the CFTC and the SEC. One can hold it in their brokerage account through an exchange-traded product, an ETF, ETP. It's now an asset for millions of Americans, and it certainly could be treated like a stock or a bond or cash as a contribution to someone's net worth to qualify for a mortgage. And if we pass Clarity this week, which I expect we will on a bipartisan basis, and we craft a dollar-backed stablecoin like GENIUS offered by Senator Hagerty, we'll have the rules of the road. It won't be a patina of consumer enforcement. It will be real consumer enforcement, investor protection-- MARGARET BRENNAN: --And the down payment for a house-- REP. HILL: --both by the CFTC, the SEC, and the bank, and the bank regulators. Well, look again. Bitcoin is an asset. You can determine if you think it's going to go up in value or down in value, just like stocks and bonds or other investments that people have on their financial statement to secure their financial statement for a net- for net worth purposes or to liquidate for a down payment. So, I think it's a financial asset. Our bills will make it a more secure one, and one that's better for, I think, all households and businesses. MARGARET BRENNAN I'm out of time, so I'm gonna have to leave it there. Thank you, Congressman. We'll be back.
Russia Today
20-06-2025
- Business
- Russia Today
EU to gamble with Russia's frozen assets
The European Union is looking to channel billions of euros in profits from frozen Russian assets into 'riskier investments' to boost funding for Ukraine, Politico has reported, citing sources. Officials reportedly view the move as a way to generate higher returns without directly tapping into the sovereign funds themselves, which would be in breach of international law. The proposal is part of a broader EU initiative to use profits from immobilized Russian assets – primarily Western government bonds held by the Brussels-based clearing house Euroclear – to support Ukraine's war effort. Moscow has labeled the seizure of its assets as 'theft.' Western nations froze an estimated $300 billion in Russian sovereign funds following the escalation of the conflict in Ukraine in February 2022. Of that amount, more than $200 billion is held by Euroclear. The funds have generated billions in interest, with €1.55 billion ($1.78 billion) transferred to Kiev last July to back a $50 billion G7 the new plan, the assets would be placed into an EU-managed investment fund that could pursue higher-yield strategies, officials told Politico on Thursday. The goal is to increase returns without resorting to outright confiscation – a step opposed by countries such as Germany and Italy due to the potential legal and financial consequences. The EU's $21 billion contribution to the G7 loan is expected to be fully disbursed by the end of this year. With future US aid uncertain and the bloc's own budget under pressure, officials are exploring alternative ways to keep Ukraine's economy afloat beyond 2025, Politico reported. EU policymakers hope the plan will allow them to extract more revenue from the assets without violating international legal norms. The International Monetary Fund has warned that outright seizure could damage global trust in Western financial institutions. Talks among member states over confiscation have dragged on for more than three years without resolution. Brussels also reportedly sees the new investment structure as a safeguard in case Hungary vetoes the renewal of sanctions – a move that could result in the assets being returned to Russia. EU sanctions must be unanimously extended every six months, and Budapest has repeatedly threatened to block them, citing national interests. Critics caution that riskier investments could result in losses ultimately borne by EU taxpayers, the outlet has condemned the asset freeze and has threatened countermeasures, including legal action.
