Asian giants demand EU should not confiscate frozen Russian assets

China, Indonesia and Saudi Arabia warned the EU that confiscation of Russian assets would be unacceptable. One shall assume that it was the European Union that had a hand in this request.

Photo: www.flickr.com by Håkan Dahlström from Malmö, Sweden, CC BY 2.0

According to Politico, several Asian countries, in particular China, Indonesia and Saudi Arabia, called on the European Union not to yield to pressure from the United States and Great Britain and not to confiscate 200 million euros of Russian assets that had been frozen in European banks.

A senior diplomat from a non-EU country suggested that it was Russia that could ask its friends to arrange this.

These countries are worried that:

• the move to confiscate Russian assets will create a precedent that would make such decisions absolutely legitimate in relation to other countries of the world. As a possible reason, the conflict in Ukraine will drag on, and they will have to "take one side or the other.”
• Russia may also ask friendly countries to confiscate Western assets on their territory in response. This will tarnish their reputation in the eyes of international investors.
• legal challenges will appear inevitably. Russian companies have filed more than 100 lawsuits at domestic courts demanding the release of Western assets that are currently frozen in Russia, and those legal proceedings may extend beyond Russia's borders.

The recruitment of "petitioners for Russia” does not look strange.

From the very beginning, China has been supporting the Russian Federation. Like India, China willingly buys energy resources from Russia after they fell under Western sanctions. Saudi Arabia has joined Russia and China at BRICS. The kingdom joins Russia as OPEC+ as well. The countries coordinate their actions to make oil prices stable.

As for Indonesia, Jakarta believes that Russia had the right to start the military operation in Ukraine, since the West and NATO did not take Moscow's concerns into account. Indonesian leader Joko Widodo prioritised ties with China. It is believed that anti-American sentiment in Indonesia stems in part from close ties between the US and Israel. Indonesia is a Muslim country and does not accept "liberal values.”

In Europe they know how to make plays

The supposed "request from Russia," and a bold decision by the three countries themselves that decided to demand that the EU "resist US pressure" look strange.

May we dare to suggest that it was not Russia, but the European Union itself or its individual member countries that asked the three not to steal Russian assets. The EU must rely on the opinions of Beijing, Riyadh and Jakarta in its confrontation with the United States that is destroying its economy.

The EU economy is falling into recession (the German economy in the first place). It is heavily dependent on economies of the Asian giants. In 2023, China was the EU's third largest export partner (8.8%) and the EU's largest import partner (20.5%). As part of its green agenda, the EU imports more than four-fifths of its lithium-ion batteries from China, whereas EU's automotive and chemical industries are also heavily dependent on Chinese partners.

China and Saudi Arabia remain leading investors for EU

Saudi Arabia has become the leading supplier of fuel to Europe. It goes about the re-export of Russian diesel fuel. Exports of Saudi crude oil to Europe from terminals in the Red Sea increased dramatically in early 2024.

The European Union is currently discussing the proposal to remove taxes on profits received from frozen Russian assets amounting to about 2.5-3 billion euros per year. It is believed that as much as 90 percent of the proceeds will supposedly be used to buy weapons for Ukraine.

Yet, there is no consensus in relation to this proposal. Banks and depositories are against it. They do not want to go bankrupt should Russian courts succeed in appealing the proposal. It appears that Russian assets will not be confiscated at the request of most important partners of the European Union.