Home » Yellen: It’s not legal for the US to seize Russian official property
News

Yellen: It’s not legal for the US to seize Russian official property


Links to breadcrumbs

PMN Business

Author of the article:

Article content

BONN — The United States has no legal authority to seize the Russian central bank’s assets frozen due to the invasion of Ukraine, Treasury Secretary Janet Yellen said on Wednesday, but is talking with US partners about ways to make Russia pay the bill. to make post-war Ukraine pay. reconstruction is underway.

Yellen also said it is likely that the special permit granted to allow Russia to make payments to its US bondholders will not be renewed when it expires next week, giving Russian officials a rapidly narrowing window to avoid the first foreign debt default since the Russian Revolution.

Advertisement 2

This ad hasn’t loaded yet, but your article continues below.

Article content

Russia’s February 24 invasion of Ukraine is the central item at this week’s Group of Seven finance ministers meeting, and Yellen said officials are looking for ways to make Russia pay for repairing the catastrophic damage it has suffered. inflicted on Ukraine and its economy during nearly three months of war.

“I think it’s only natural that, given the massive devastation in Ukraine and the massive rebuilding costs they’ll face, we’ll look to Russia to help pay at least some of the price involved.” Yellen told reporters. of this week’s meetings.

One idea recently floated was that the United States would seize hundreds of billions of assets from the Russian central bank. The United States and its allies have locked up an estimated $300 billion in assets, but they remain Russian-owned.

Advertisement 3

This ad hasn’t loaded yet, but your article continues below.

Article content

“As we begin to look at this, it wouldn’t be legal in the United States right now for the government to seize those assets,” Yellen said. “It’s not something that’s legal in the United States.”

As officials explore ways to hold Russia at least partially responsible for any reconstruction, Yellen said talks are continuing about providing other sources of immediate aid to Ukraine, and she expects the US Senate to vote on an aid package soon. $40 billion. On Tuesday, she urged US allies to step up their financial support.

DEBT PAYMENTS LOOM

Russia has about $40 billion in international bonds and has so far managed to meet its obligations and avoid the first default since 1917.

Advertisement 4

This ad hasn’t loaded yet, but your article continues below.

Article content

His ability to make the required dollar-denominated payments to date is subject to a temporary general license issued in March by the Treasury’s Office of Foreign Assets Control. That allowed an exception to a ban on transactions with the Russian Ministry of Finance for the purpose of “receiving interest, dividend or maturity payments in connection with debt or equity”.

The next payment is due on May 25, the day the license expires.

On Wednesday, Yellen said the Treasury Department is unlikely to extend the waiver, which could result in a technical default if Russia then resorts to paying in rubles rather than dollars, as required under the bond covenants.

“No final decision has been made on that yet, but I think it’s unlikely it will stay that way,” Yellen said, adding that a technical glitch would not change the current situation regarding Russia’s access to capital.

“If Russia is unable to find a way to make these payments, and they technically default on their debts, I don’t think that will really make a significant change in Russia’s situation. They are already cut off from global capital markets.” (Reporting by David Lawder in Bonn and Rami Ayyub in Washington; Writing by Dan Burns Editing by Chizu Nomiyama)

Share this article in your social network

Advertisement

This ad hasn’t loaded yet, but your article continues below.

By clicking the sign up button, you agree to receive the above newsletter from Postmedia Network Inc. receive. You can unsubscribe at any time by clicking the unsubscribe link at the bottom of our emails. Postmedia Network Inc. † 365 Bloor Street East, Toronto, Ontario, M4W 3L4 | 416-383-2300

Comments

Postmedia is committed to maintaining a lively yet civilized discussion forum and encourages all readers to share their thoughts on our articles. It can take up to an hour for comments to be moderated before appearing on the site. We ask that you keep your comments relevant and respectful. We’ve enabled email notifications – you’ll now receive an email when you get a reply to your comment, there’s an update in a comment thread you’re following, or a user follows comments. Visit our Community Guidelines for more information and details about customizing your email settings.

This post Yellen: It’s not legal for the US to seize Russian official property

was original published at “https://financialpost.com/pmn/business-pmn/yellen-not-legal-for-u-s-to-seize-russian-official-assets”

About the author

admin

Add Comment

Click here to post a comment

Your email address will not be published.