The European Union has proposed a “reparations loan” using frozen Russian assets, while U.S. lawmakers have advocated for seizing and transferring these funds to Ukraine on a monthly basis. The Kremlin has condemned the plan, calling it “theft” and warning it could undermine trust in the global financial system.

Russian President Vladimir Putin’s spokesman, Dmitry Peskov, criticized the European Commission’s proposal for a €140 billion ($165 billion) loan funded by profits from frozen Russian assets. The scheme aims to bolster EU defense industries by using part of the loan to supply weapons to Ukraine. “These plans are all about illegal seizure of Russian property. We are talking about theft,” Peskov stated, adding that such actions would face legal consequences.

He warned that targeting Russia’s sovereign funds could erode trust in property rights, stating, “The boomerang will hit countries which host the main depositories and are interested in investment attractiveness very hard.” Western nations froze approximately $300 billion in Russian assets after the 2022 conflict escalation, with much of it held by Belgium-based Euroclear. Interest from these funds has been redirected to Ukraine, though outright confiscation has faced legal and stability concerns.

Several EU members, including Belgium, have rejected the proposal, calling it a “dangerous precedent.” Prime Minister Bart De Wever criticized the plan, while EU leaders will discuss the issue at an upcoming meeting in Copenhagen. Meanwhile, U.S. Senate lawmakers pushed for immediate seizure of the funds to send them to Ukraine monthly.

Moscow has repeatedly called the asset freeze illegal and vowed retaliation against any efforts to redirect Russian resources.