US Treasury Secretary Janet Yellen has called upon European allies to collaborate with the United States in unlocking approximately $280 billion worth of frozen Russian assets.

Yellen emphasised the urgency of this action, stressing the importance of utilising these assets to provide sustained financial support to Ukraine.

Her remarks were made ahead of a speech on the transatlantic alliance, underscoring the need for collective action to address the ongoing crisis in Ukraine.

“It’s vital and urgent that we collectively find a way forward to unlock the value of Russian sovereign assets immobilised in our jurisdictions for the benefit of Ukraine,” Bloomberg quoted Yellen as saying.

The United States has been leading efforts to utilise these frozen assets to aid Ukraine, exploring various options ranging from direct seizure to securitisation for debt issuance or loan backing.

However, European countries have expressed scepticism, raising concerns about potential implications for financial stability, the euro’s role, and legal risks.

The majority of the frozen assets are held in European jurisdictions, making European cooperation crucial in this endeavour.

The topic of unlocking frozen assets will be a key focus of discussions among Group of Seven (G-7) finance ministers gathering in Stresa, Italy later this week.

Alongside discussions on financial support for Ukraine, the finance chiefs are expected to evaluate the effectiveness of collective sanctions against Russia and explore avenues to enhance the sanctions regime.

Yellen also advocated for tightening the Russia sanctions regime by addressing evasion tactics, particularly through third parties, and controlling the flow of sensitive goods originating from the US and Europe.

 These measures are aimed at strengthening the impact of sanctions and maintaining pressure on Russia amidst ongoing geopolitical tensions.

(With inputs from Bloomberg)