G7 Moves to Further Support Ukraine
by Utilizing Additional Frozen Russian Assets
The finance ministers of the Group of Seven (G7) have warned that they may impose sanctions on countries importing Russian crude oil in order to intensify pressure on Russia.
On October 1 (local time), following a virtual meeting, the G7 finance ministers issued a joint statement saying, "We have agreed to take coordinated actions to strengthen pressure on Russia in order to end the war in Ukraine and support Ukraine's ongoing defense efforts."
The finance ministers emphasized that they would target countries that continue to increase their purchases of Russian oil after the invasion of Ukraine, as well as those that facilitate indirect exports.
They agreed that trade measures such as imposing tariffs and blocking imports and exports are crucial to cutting off revenues flowing into Russia, and stated that they would use economic and financial measures to pressure Russia. The finance ministers also announced, "We will take specific actions to gradually reduce the remaining imports from Russia, including hydrocarbons (oil and natural gas)," adding that they are "seriously considering trade and other restrictive measures against countries that help finance Russia's war."
Although the statement did not mention any countries by name, the remarks appear to be aimed at China and India, which have been purchasing large amounts of Russian crude oil. Since Russia's invasion of Ukraine in February 2022, China and India have increased their imports as the price of Russian oil dropped due to Western sanctions. The United States and other Western countries have criticized this as providing Russia with funds to continue the war.
In addition, the G7 agreed to expand financial support for Ukraine, including the option of further utilizing Russia's frozen assets.
They stated, "Now is the time to strengthen Ukraine's resilience and expand coordinated measures that critically undermine Russia's war capabilities," adding, "We are developing a range of options to meet Ukraine's funding needs and to prevent Russia from buying time." They continued, "This includes the coordinated use of the full value of Russian sovereign assets (RSA) frozen within our jurisdictions to end the war and ensure a just and lasting peace for Ukraine."
Currently, it is known that approximately 300 billion euros of Russian central bank assets are frozen within G7 countries. Until now, only the proceeds from these frozen assets have been used to support Ukraine, but this move signals that the principal may also be utilized in the future. However, the finance ministers added that these measures would be implemented in a manner consistent with each country's legal framework.
They plan to continue discussions on this issue at the upcoming IMF and World Bank Annual Meetings, which will be held in Washington, DC, on October 15.
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