(MENAFN) Washington has privately urged the European Union to return Russia’s frozen assets once a peace agreement with Ukraine is signed, Politico reported on Tuesday, citing multiple diplomats. The alleged US position clashes directly with the EU’s current strategy to use those funds to support Kiev long-term.

According to the report, EU leaders are pursuing a plan to raise a €140 billion ($160 billion) “reparations loan” for Ukraine, using immobilized Russian state assets as collateral. The initiative has faced persistent objections from Belgium, which holds the majority of the frozen funds and continues to warn that these steps pose serious legal and financial risks.

Politico said that during a visit to Washington over the summer, US officials informed the EU’s sanctions envoy, David O’Sullivan, that the American side intended to return Russia’s frozen assets once a peace treaty is in place.

A leaked version of the US 28-point peace proposal published in November suggested that $100 billion of Russia’s assets would be funneled into American-led “efforts to rebuild and invest in Ukraine,” with Washington keeping 50% of the profits. The EU would add another $100 billion, while remaining Russian funds would be placed into a “separate US-Russian vehicle,” according to the leak. Bloomberg later reported that the clause concerning the unfreezing of assets was removed from the final draft.

The leaked plan reportedly created friction between Brussels and Washington, with several diplomats telling Politico that EU officials balked at the idea of the US receiving a share of the profits and establishing a joint financial mechanism with Russia for the leftover funds.

Moscow, for its part, has reacted cautiously but positively, saying the initial American outline could serve as a possible basis for settlement talks, though “a number of points” still require clarification.

Belgium has remained adamant in its opposition to confiscation. Foreign Minister Maxime Prevot reiterated on Monday that the EU proposal “offers neither the necessary legal certainty nor eliminates systemic financial risks,” arguing instead that opting for a “conventional EU loan” would be the more prudent path.

The European Central Bank has also declined to endorse the €140 billion Ukraine funding plan backed by frozen Russian assets, citing concerns about potential instability for the eurozone.

Russia has repeatedly warned that any attempt to use its sovereign reserves amounts to “theft” and would be met with retaliatory steps.

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