Frozen Russian Assets: Ukraine

Johanna Baxter Excerpts

Monday 6th January 2025 Commons Chamber

[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.

[Johanna Baxter (Paisley and Renfrewshire South) (Lab)]

I heard the question from the right hon. Member for South West Wiltshire (Dr Murrison) on co-ordinated action. While no G7 nation has yet moved fully to seize Russian state assets, Canada and the US have enacted legislation to permit them to do so. Does the hon. Member agree that legislation is an important step forward and that the threat of immediately seizing $300 billion of immobilised assets is a tool that would add pressure on Russia’s already waning economy?

[Mike Martin]

It is as if I gave the hon. Member a copy of my speech, because I will come to that in my next paragraph.

In April 2024, the US passed the REPO Act, which enables the US to seize frozen Russian assets and give them to Ukraine for her and, indeed, our defence. What is more, it became clear over the past month that the US has been quietly pushing its G7 allies—including us, one assumes—to take the step to investigate how to seize those assets and send them to Ukraine. Perhaps the Minister could feed back to the House what conversations have been had with the US State Department, what it has asked us to do and how we have responded.