The United States has proposed that European countries unfreeze some Russian sovereign assets immobilised after Moscow’s invasion of Ukraine, in an attempt to revive peace talks, reported the Financial Times (FT).
The plan would involve transferring some of the assets into a special-purpose financial vehicle overseen by Washington. European delegates, however, rebuffed the proposal, which was pitched by US special envoy Steve Witkoff and US President Donald Trump’s son-in-law Jared Kushner.
The proposal emerged during discussions in Miami last week involving US negotiators and officials from Ukraine, France, Germany, Britain, the European Union (EU) and the North Atlantic Treaty Organisation (Nato).
The proposal has reportedly raised concerns among European nations and Ukraine over Washington’s approach to pressuring Russian President Vladimir Putin to end the war.
Why were Russian assets frozen?
Russian assets were frozen as an economic sanction after Moscow launched its full-scale invasion of Ukraine in February 2022. The Group of Seven (G7) and EU partners immobilised the funds to block Russia’s access to its foreign exchange reserves, weaken its financial system, and limit its ability to fund the war, with most of the funds held in the EU.
The EU and other G7 nations have used proceeds generated by the immobilised assets to support Ukraine financially, while avoiding a general transfer of the underlying Russian principal. Ukraine has received a 45 billion euro loan from G7 countries backed by interest earned on the frozen assets, the FT reported.
European leaders have also committed to using the assets to help fund Ukraine’s reconstruction if Russia fails to pay war reparations. Any decision by the EU to unfreeze the assets would require unanimous agreement among its 27 member states, making the US proposal difficult to advance.
The report also said the US had asked Ukraine to submit a plan explaining how funds from any source would be spent and to work with the World Bank on reforms intended to improve accountability and combat corruption.
Trump’s efforts to revive Russia-Ukraine negotiations
The asset proposal comes as Trump seeks to restart negotiations after previous efforts to secure a settlement failed to produce sustained talks.
Reuters reported on Monday that Witkoff and Kushner told Ukrainian officials during the Miami discussions that a separate deal allowing Russian diesel exports was intended to encourage Moscow to return to negotiations.
Under the agreement, Russia would initially supply more than 2.25 million barrels of diesel to US and global markets. The US envoys also asked Ukraine to stop striking Russian oil refineries, with the idea that Washington could then press Moscow to reciprocate with steps towards peace.
These efforts, however, have been viewed with scepticism by Ukrainian officials, who see them as offering Russia economic benefits without securing concessions to end the war.
Ukrainian President Volodymyr Zelenskyy said on Wednesday that it was painful when Trump appeared to take Russia’s side, adding that Ukraine was losing a strong partner. Italian Prime Minister Giorgia Meloni also criticised the arrangement, telling parliament that it risked legitimising Moscow, generating revenue to finance its war and weakening sanctions against Russia.
