Russia could downgrade relations with the US if its assets are seized, the deputy foreign minister has warned

Moscow could downgrade diplomatic relations with Washington if the US confiscates frozen Russian assets, Deputy Foreign Minister Sergey Ryabkov warned on Thursday.

The US and its allies have frozen around $300 billion in Russian central bank assets as part of Ukraine-related sanctions, most of which are being held in the EU.

Washington has long advocated for confiscating the funds, so that the money would then be handed over to Kiev for its war effort against Russia. The latest push came on Saturday, after the US House of Representatives approved a bill authorizing the confiscation of Russian money.

The so-called REPO Act, which lawmakers in Washington passed last weekend along with a $61 billion military aid package for Ukraine, authorized the US president to confiscate Russian funds held in American banks and hand them over to Kiev. More than $6 billion of the $300 billion in frozen Russian assets is sitting in US banks. US Senator Rand Paul, who is skeptical of the proposal, warned earlier this year that the move would be “an act of economic war.”

Officials in several Western nations, notably the US and the UK, have insisted on the outright confiscation of Russian assets despite widespread concerns that this would have no legal basis. In contrast, the EU has been reluctant to do so, reportedly fearing Russian retaliation. EU nations, which are holding the lion’s share of the frozen funds, are reportedly concerned that expropriating the money would destabilize the euro.

Moscow’s response to the confiscation of its assets by the G7 countries could include economic and diplomatic countermeasures, Ryabkov was cited by RIA Novosti as saying.

The senior diplomat has previously warned that the US should not “act under an illusion… that Russia is clinging with both hands to diplomatic relations with that country.”

Moscow has repeatedly said the seizure of its assets would be “theft.” Kremlin spokesman Dmitry Peskov has warned the US will damage its own economy, as well as the global financial system, if it follows through on its threat to expropriate the funds and give them to Ukraine.

“This would be nothing short of a breakdown of all foundations of the [global] economic system,” according to Peskov.