US Reportedly Proposes Unfreezing Russian Assets to Restart Ukraine Peace Talks

The United States has reportedly proposed that European countries release some of the Russian sovereign assets frozen after Moscow launched its invasion of Ukraine, in an effort to restart stalled peace negotiations, according to the Financial Times (FT). The proposal reportedly involves transferring a portion of the immobilised funds into a special-purpose financial vehicle overseen by Washington. However, European representatives rejected the idea when it was presented by US special envoy Steve Witkoff and Jared Kushner, son-in-law of President Donald Trump.

The proposal emerged during discussions held in Miami last week, attended by US negotiators and officials from Ukraine, France, Germany, the United Kingdom, the European Union (EU) and the North Atlantic Treaty Organisation (NATO). The reported initiative has raised concerns among European governments and Ukrainian officials about Washington’s strategy for persuading Russian President Vladimir Putin to end the war.

Western countries froze Russian sovereign assets after Moscow launched its full-scale invasion of Ukraine in February 2022. The Group of Seven (G7) nations and the EU introduced the measures to restrict Russia’s access to its foreign exchange reserves, put pressure on its financial system and limit its ability to fund the war. A substantial portion of the immobilised assets is held within the European Union.

Since the freeze was imposed, Western governments have explored ways to use the income generated by the assets to support Ukraine without transferring ownership of the underlying funds. According to the FT, G7 countries have provided Ukraine with a €45 billion loan backed by earnings from the frozen Russian assets.

European leaders have also pledged to use the funds to help finance Ukraine’s reconstruction if Russia refuses to pay war reparations. However, lifting the EU asset freeze would require unanimous approval from all 27 member states, making the reported US proposal difficult to implement. The report further stated that Washington had asked Ukraine to prepare a plan explaining how funds from potential sources would be spent. Kyiv was also reportedly encouraged to work with the World Bank on reforms designed to strengthen accountability and address corruption.

The asset proposal comes as Trump seeks to revive diplomatic negotiations between Russia and Ukraine following previous attempts that failed to produce a lasting breakthrough. According to Reuters, Witkoff and Kushner told Ukrainian officials during the Miami discussions that a separate arrangement allowing Russian diesel exports was intended to encourage Moscow to return to negotiations.

Under the reported arrangement, Russia would initially supply more than 2.25 million barrels of diesel to US and international markets. American negotiators also reportedly asked Ukraine to stop attacking Russian oil refineries, with Washington hoping to persuade Moscow to respond with steps towards peace.

The approach has reportedly met with scepticism among Ukrainian officials, who are concerned that easing economic restrictions or creating new opportunities for Russian energy exports could benefit Moscow without securing meaningful concessions to end the conflict. Critics argue that additional energy revenue could help Russia sustain its military campaign while weakening the pressure created by Western sanctions.

Ukrainian President Volodymyr Zelenskyy reportedly expressed frustration with Trump’s approach on Wednesday, saying it was painful when the US president appeared to take Russia’s side. He also suggested that Ukraine was losing a strong partner. Italian Prime Minister Giorgia Meloni raised similar concerns, warning parliament that the proposed arrangement risked legitimising Moscow’s actions, generating revenue that could support its war effort and undermining sanctions imposed on Russia.

The debate over frozen Russian assets highlights the divisions among Western allies over how best to bring the conflict to an end. While Washington appears to be exploring financial incentives as part of its diplomatic strategy, European governments and Ukraine remain concerned about easing pressure on Moscow without securing concrete commitments.

With the European Union requiring unanimous approval to lift the asset freeze, the proposal faces significant political and legal obstacles. Its future will depend on further discussions between Washington, European capitals and Kyiv, alongside Russia’s willingness to make meaningful commitments towards ending the war. Disagreements over sanctions, energy revenues and the use of frozen assets remain central challenges in efforts to achieve a lasting peace agreement between Russia and Ukraine.