Taking Russia’s frozen assets would undermine trust in the Western financial system, which would be very difficult to restore, according to Kremlin Press Secretary Dmitry Peskov. The US and its allies have blocked around $300 billion in Russian central bank assets as part of sanctions imposed on Moscow over the Ukraine conflict. Most of the funds are being held in the EU. Washington has been insisting for months that international law allows for the appropriation of the funds, but Germany and France have expressed concerns that such a move could have negative consequences for the Western financial system.
Earlier this week, US President Joe Biden signed a bill allowing the seizure of some $6 billion in Russian state assets that are sitting in American banks.
Peskov told the TV channel Russia 1 on Sunday that it is too early to speak about all $300 billion being confiscated by the US and EU. However, he offered the reminder that “Russia has Western money from various structures. Our country can take retaliatory steps.”
But if Washington and European capitals do decide to seize Russian assets, “a dangerous precedent will be created; it will be a solid nail in the future coffin of the entire Western economic system of axes.”
If this happens, foreign countries and investors who currently keep or are willing to keep their money in Western banks will start “thinking ten times” before entrusting their funds to those institutions, the spokesman warned.
According to Peskov, the reliability of the Western financial systems will be destroyed. “Reliability can be lost overnight through one stupid, ill-considered decision, while restoring it takes decades or even longer,” he explained.
The Russian authorities would also have ample grounds to challenge the seizure of its funds in international courts, the spokesman stressed. Moscow “will endlessly defend its interests” through legal means, he said.
The head of the Bank of Russia, Elvira Nabiullina, said on Friday that the possible seizure of the assets by the US and the EU “will not have any impact on financial stability [in the country], as we have halted operations with them long ago, we do not use them.”
Moscow previously said that the confiscation of its funds would amount to theft and warned that it could downgrade diplomatic relations with Washington if it resorts to such an illegal move.