Russia says it may downgrade ties with US if its assets are confiscated

Russian President Putin attends the Congress of the Russian Union of Industrialists and Entrepreneurs in Moscow

MOSCOW (Reuters) - Russia is considering downgrading the level of its diplomatic relations with the United States if Western governments go ahead with proposals to confiscate its frozen assets, state news agency RIA quoted Deputy Foreign Minister Sergei Ryabkov as saying on Thursday.

The G7 group of nations are looking to use nearly $300 billion worth of Russian financial assets frozen by sanctions since 2022 to help support Ukraine, which is now in its third year of fighting a Russian invasion.

How it would be done remains highly complex, however, given it would set a controversial precedent.

Ryabkov said Moscow would retaliate economically and politically if the assets were seized.

"Lowering the level of diplomatic relations is one of the options, of course. Many high-ranking representatives in our government have already spoken about the issues of our financial, economic and material response to this step (confiscation), which we are warning our opponents, as before, not to take," RIA quoted him as saying.

"We are now studying the optimal form of reaction, where countermeasures include actions against the assets of our Western opponents as well as diplomatic response measures."

He did not spell out what lowering the level of diplomatic relations might entail. The Kremlin has characterised the current state of ties with the United States as "below zero", although no formal downgrade of relations has occurred since the Ukraine war began.

(Reporting by Reuters; writing by Mark Trevelyan; Editing by Toby Chopra)