Russia says weighs downgrading ties with US if assets are seized

Russia has announced that it is contemplating downgrading its diplomatic and trade ties with the United States if its assets are confiscated by the US government.

RIA Novosti news agency quoted Russia's deputy Foreign Minister Sergei Ryabkov as saying on Thursday that Russia is considering downgrading the level of its diplomatic relations with the United States if Western governments go ahead with proposals to confiscate its frozen assets worth about $300 billion.

The Group of Seven (G7) nations are looking to use the money from Russian financial assets frozen in these countries since 2022 to help support Ukraine in its war against Russia.

The Russian official asserted that Moscow would retaliate economically and politically if the assets were seized by Ukraine's Western allies.

"Lowering the level of diplomatic relations is one of the options, of course. Many high-ranking representatives in our government have already spoken about the issues of our financial, economic and material response to this step (confiscation), which we are warning our opponents, as before, not to take," RIA quoted Ryabkov as saying.

US, allies have frozen ‘$330bn of Russian assets’ since Ukraine war

That is according to the Russian Elites, Proxies, and Oligarchs Task Force (REPO) of the US Treasury Department.

 Moscow is considering both economic and diplomatic responses.

"We are now studying the optimal form of reaction, where countermeasures include actions against the assets of our Western opponents as well as diplomatic response measures," Ryabkov said, refraining from giving further details.

Western banks warn of consequences if EU seizes Russian assetshttps://t.co/1IqzhWlDMY

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"Among the countermeasures, there may also be actions against the assets of our Western opponents," he said.

Although no formal downgrade of relations has been announced since Russia launched its special military operation in Ukraine in February 2022, the Kremlin has described the current level of diplomatic ties between the United States and Russia as "below zero".

US bars investors from buying Russian debt, stocks on secondary market

The United States has tightened economic sanctions against Russia using the pretext of its conflict with Ukraine.

In related news, US Treasury Secretary Janet Yellen said on Thursday that Washington welcomed what she called a "very constructive step" taken by the European Union to segregate the proceeds from assets held by Brussels-based Euroclear and transfer them to Ukraine, noting future interest could also be pulled forward to expand funds available for Ukraine.

"This is an approach that could be broadly supported by countries that are concerned about the seizure of assets, and some of the interest could be brought forward through, for example, a loan," Yellen said in a Reuters Next interview in Washington.

The senior US official claimed this unprecedented method of funneling Russia's money to Kiev was among several options being discussed by the G7 ahead of a leaders’ summit scheduled next month.

The US Senate on Tuesday voted to pass a foreign aid package that includes long-stalled aid for Israel and Ukraine. The bill, which US President Joe Biden signed into law on Wednesday, also includes measures to confiscate frozen Russian assets for funding Ukraine.

Meanwhile, Russian Foreign Minister Sergey Lavrov has described the West's plans to provide Kiev with the proceedings derived from seized Russian assets as "thievish ... in the literal sense."

“They are thievish, we realized this a long time ago. They have been treacherous all along in political terms, you know: in the sense of reneging on agreements and trying to deceive someone. Now they have turned out to be thieves in the literal sense,” the top Russian diplomat told journalists at a press conference just before Christmas last year. 

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