Online Press Briefing with Deputy National Security Advisor for International Economics Daleep Singh

https://www.state.gov/wp-content/uploads/2024/10/20241030_NSC_Singh.mp3

MODERATOR: Good afternoon from the State Department's Brussels Media Hub. I'd like to welcome everybody joining us for today's virtual press briefing. We're very honored to be joined by Mr. Daleep Singh, the Deputy National Security Advisor and Deputy Director of the National Economic Council.

We'd like the questions - further questions to focus purely on Russian sovereign assets, if possible. And we'll have time to take three, maybe four questions before Mr. Singh has to move to another appointment.

A quick reminder that today's session is on the record. And with that, let's get started. Mr. Singh, I'll turn it over to you for opening remarks.

MR SINGH: All right. Thanks, John, and thanks, everybody, for joining the call. Let me just make a few observations at the top and then I'd be happy to jump into your questions.

First, the deal finalized last week to harness $50 billion of value from the frozen Russian assets, it's a demonstration of why multilateralism is a force multiplier in foreign policy. No single country could have delivered this deal by itself. Every G7 country will contribute to the loan. And together we're delivering a unified signal that the leading democracies of the world won't fatigue in standing behind Ukraine's fight for freedom. Excuse me.

Second, it sends an unmistakable signal to Putin that time is not on his side. One of the reasons why the United States pushed for the G7 to immobilize Russia's central bank assets only two days after Putin's invasion began in 2022 was that we knew it would come as a surprise in terms of the severity of the action, the unity with which we'd act, and our collective speed. In doing so, we believed our collective resolve could help change Putin's calculus about the costs of prosecuting a senseless war.

The deal announced last week to unlock $50 billion from the Russian assets we froze more than two years ago is a demonstration that these costs will continue to rise so long as the war continues. The G7 has the resources within its control to ensure that Russia pays and that Ukraine prevails. The choice is ours.

Third, Ukraine will now receive an economic lifeline as it prepares for a third winter of war. The G7 deal will produce immediate benefits for Ukraine to close its near-term budget gap, to sustain its IMF program, and to fund its defense.

And fourth, I want to underline that this deal was far from inevitable. The truth is it was improbable only a few months ago and seemingly impossible many times over. It was forged by leadership, creativity, collaboration, and dogged persistence across the G7, from the staff level all the way to the top of our political systems. It came together because a combination of committed leaders, diplomats, and technocrats - with expertise ranging from macroeconomics, financial markets, credit risk, tax, and the law - resolved that the moral, political, and economic case for getting this done for tens of millions of innocent people in Ukraine was overwhelming.

We knew from the start that this action would have no historical precedent and that the costs and risks involved are considerable, but equally, we understood that the costs and risks of leaving Ukraine insufficiently financed to fight for its freedom were unacceptable. And so we found a way forward that respects the rule of law in every G7 jurisdiction, maintains our solidarity, and keeps all of our options available for any subsequent actions.

Let me just stop there and I'd be happy to chat with any questions you have.

MODERATOR: Thanks so much for those opening remarks, Mr. Singh. Let's go to our first question that was submitted earlier from Besson Sylvain from Tamedia in Switzerland, who asks: "Is Switzerland involved in any way in Russian sovereign or central bank asset confiscation or the ongoing discussions?"

MR SINGH: Okay, thanks for that question. Switzerland is not part of the Extraordinary Revenue Acceleration loan syndicate that we announced last week as part of the $50 billion deal, but it's solidarity from the start of the war, its willingness to break centuries of neutrality, has underscored that our cause is to defend shared principles that underpin global peace and security. And we'd welcome the participation of Switzerland and any other country in pledging immobilize Russian assets held in its jurisdiction towards the loan syndicate or finding any other ways to participate over the course of time.

MODERATOR: Excellent, thank you. Second question - submitted one - is from Chris Cook from the Financial Times in the UK: "I'd like to know your assessment of the barter arrangements that have emerged in the wake of payment disruption."

MR SINGH: We have picked up on reports of barter arrangements that have resulted from Russia's payment difficulties, particularly - particularly with China. But I think this creates more of a - eventually this will create more of a strategic wedge than a solution, because for China, it can't say that it wants better relations with Europe while funding and fueling the biggest threat to Europe's security since the Cold War. It can't claim to be a responsible stakeholder in the Indo-Pacific if it's part of an axis that's propping up North Korea's military capabilities. And it's not going to be able to export its way out of a deflationary slump if it's antagonizing its largest consumers.

So for China in particular, which is where a lot of these barter arrangements are reportedly being made, if it really wants to end the war, it should pull the plug. Its factories should stop providing inputs that Russia is using to generate lethal output on the battlefield - the machine tools, the microelectronics and the engines that are going into tanks and missiles and drones. China really can't have it both ways, and if it continues to try to do so, the damage to its reputation - in Europe but also well beyond - it will be profound and lasting.

MODERATOR: Thanks. We have a number of hands up. Why don't we go to Jenny Gross. Jenny, please go ahead.

QUESTION: Hi, thanks for this. It's Jenny Gross from The New York Times in Brussels. What reassurance have you gotten from EU officials that Europe is more moving towards extending the sanctions renewal period to 36 months, or really to any period beyond six months? And how important is that to you?

MR SINGH: Yeah, it's quite important. The scale of our contribution was always a function of the strength of the assurances that we received about the continued immobilization of the assets held in Europe. After all, that's where the income that is going to be used to repay our loans will come from. And so a number of factors led us to raise our assessment of the assurances that we were receiving from Europe. Number one, the EU Council statement that was passed at the end of June, and then once again in October, that codified the commitments that were made at the G7 summit in early June. And this, I should say, this was a commitment made by the EU Council that included all 27 member-states, including Hungary. In other words, the assets immobilized - the Russian Central Bank assets that are immobilized in Europe will remain so until there's a just peace between Russia and a free and sovereign Ukraine, and until Russia pays for the damages that it's wreaked.

I would say another factor that was relevant to us is the history of the EU sanctions regime. As you know, Jenny, there's been a six-month rollover decision that requires unanimity in place ever since the EU first unveiled sectoral sanctions against Russia in 2014. And without fail, every six months the historical record proves that despite the drama and grandstanding that comes with it, those rollover decisions have always been made with unanimity over the last 10 years.

And the last factor I would point to is the equal skin in the game that the EU will have relative to the United States in this $50 billion deal. We're both going to make $20 billion contributions to the loan syndicate, and therefore we have shared incentives to ensure that the assets remain immobilized long enough to repay our loans.

So those were all collectively really important factors that allowed us to make a commitment that's equal to the EU and making this deal happen.

MODERATOR: Thanks for that. We have one more submitted question, this time from John O'Donnell from Reuters in Germany: "If sanctions on Russia were to be unwound in the future, how could these Russian assets be unfrozen, and what are the implications?"

MR SINGH: I'm sorry, John, you cut out for a second. Could you say that one more time?

MODERATOR: Apologies, of course. "If sanctions on Russia were to be unwound in the future, how could these Russian assets be unfrozen, and what are the implications?"

MR SINGH: Still not able to hear you.

MODERATOR: Testing comms again. Can you hear me?

MR SINGH: John, are you there?

MODERATOR: Can you hear me now?

MR SINGH: Oh, sorry, John - okay, I've got you. Yes. If sanctions on Russia were to be unwound in the future, how could these Russian assets be unfrozen?

MODERATOR: Correct.

MR SINGH: Yeah. So G7 leaders have committed several times - and most recently at their summit in Apulia - that the Russian Central Bank assets will remain immobilized until there is a just peace between Russia and a free and sovereign Ukraine, and until Russia pays for the damages it has caused. So if both - if both conditions are met, then any outstanding loan balances that can't be covered by the interest income from the immobilized assets will be covered by Ukraine using the payment made to it by Russia.

MODERATOR: Copy that. We have one last question, if you have time, sir.

MR SINGH: Sure.

MODERATOR: From - this time I'll call on one of the hands that are raised. Alex, Alex Raufoglu, please go ahead.

QUESTION: Yes, John, good morning. Thank you so much for doing this. I have two quick questions. Can you please clarify when the White House intends to submit a formal request to Congress for the 10 billion FMF loan authorization? And if anything you would be willing to share about some of the conversations going on with the lawmakers there.

A second question: It looks like the administration missed a mandatory October 20 deadline to publicly report to Congress the exact value of Russian state assets frozen in the United States. Any update on that front, please? Thank you so much.

MR SINGH: Sure. So on your first question, we did request for two so-called budget anomalies in the continuing resolution that would allow us to make an FMF loan as part of our $20 billion contribution. One of those anomalies would raise the authority we have to make an FMF loan; the second would increase the repayment period for making such a loan, which would therefore reduce the credit risk associated with it.

So we're working with Congress to see if we can get those anomalies passed in a timely fashion. If we're not able to do so, then the entirety of our $20 billion contribution would flow to the World Bank trust fund that we've established with other partners, and that will be directed towards budget support and project assistance to Ukraine, both in the economic realm. If we're able to get the anomalies, then we would likely split the $20 billion that we're providing to Ukraine evenly between economic assistance and security assistance.

On your second question, here I'll direct you to Treasury and OFAC. They are executing the - they are executing the directive in the REPO Act that you're referencing in terms of disclosing the quantum of Russian-sanctioned assets that are held both in the United States but also across the world. So I would refer to them for comment - to them for comment.

MODERATOR: Thanks so much for that. Unfortunately, everyone, I'm sorry, we are out of time. Thank you, Mr. Singh, for joining us today and for your discussion on this important topic. Shortly we will send the audio recording of the briefing to all the participating journalists and provide a transcript as soon as it is available. We'd also always love to hear your feedback. You can contact us at any time at [email protected]. Mr. Singh, thanks again.

MR SINGH: Thanks, everybody, for joining. Thank you, John.

MODERATOR: And we hope you can join us all for another press briefing in the near future. This ends today's briefing.

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