Frozen Russian Assets: Ukraine

Andrew Murrison Excerpts

Monday 6th January 2025 Commons Chamber

[Mike Martin]

My hon. Friend is right: it is about not just actions that lead to practical outcomes but the signals that we send to our geopolitical opponents.

[Dr Andrew Murrison (South West Wiltshire) (Con)]

I am listening carefully to what the hon. Gentleman has to say, and I agree with much of it, including that Russia must pay for what it has done, in terms of supporting Ukraine in its war and the reconstruction to come, whatever that looks like. However, does he share my concern that were we to act unilaterally, or indeed with others, we may encourage the attractiveness of other reserve currencies and systems, in particular China’s, and that capital among the $12 trillion or so globally invested may find its way to Beijing rather than currently safer destinations in the western world?

[Mike Martin]

I can answer the right hon. Gentleman directly. I am not advocating that we move unilaterally. I do not think that would be a good idea. If one country were to move, that allows capital flight to other G7 countries. The problem with the Chinese currency is that it is not fully convertible. It is not an international currency in which people like to keep lots of their reserves. That is why I am advocating for the G7 as a whole to move. Look at the currencies of the G7: the dollar, sterling, the euro—$200 billion of these assets are denominated in euros—and the yen. These are the major reserve currencies of the world. If the G7 countries move together, I think we will be safe. The right hon. Gentleman’s broader point is about the financial stability of international markets. That is an important point, but any potential small amount of financial instability created by the G7 countries moving together would be minuscule compared with the financial instability of Ukraine losing the war.

If we want to shift the dial on Ukraine, especially in the face of a potential drawdown in US support, we need to go further and faster and seize the $300 billion of frozen assets and send them to Ukraine. There is a clear legal pathway for doing so. The international law doctrine of state countermeasures says that states can take countermeasures against other states if there have been grievous violations of international law, such as the genocidal abduction of children.