EU takes first step to use profits from Russia’s frozen assets for rebuilding of Ukraine

EU and G7 nations froze some €300 billion (US$323 billion) of Russian central bank assets following Moscow’s invasion of Ukraine

The EU estimates some US$16.17 billion in such profits could be carved out for Ukraine over the next 4 years to finance reconstruction

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The coat of arms of Russia’s Central Bank near the bank’s headquarters in central Moscow. Photo: Reuters

Published: 4:12am, 13 Feb 2024

The EU adopted a law to set aside windfall profits made on frozen Russian central bank assets, it said on Monday, in a first concrete step towards the bloc’s aim of using the money to finance the reconstruction of Ukraine.

The EU and the Group of Seven nations (G7) froze some €300 billion (US$323 billion) of Russian central bank assets following Moscow’s invasion of Ukraine. The EU and G7 have been debating if and how these funds can be used for more than a year.

The United States has floated the idea of confiscating the assets outright but EU officials view this as legally too risky.

Two thirds of these funds are in the EU with most of that held by Belgium’s clearing house Euroclear. So far, only taxes on the assets in Belgium have been earmarked to a dedicated fund for Ukraine handled by the Belgian government.

The law passed on Monday means central securities depositaries (CSDs), such as Euroclear, will be prohibited from using net profits and must keep revenues from the Russian assets separate.