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Bloomberg: EU drafts proposal on funneling profits from Russian assets to Ukraine

by Martin Fornusek March 19, 2024 9:43 AM 2 min read
EU flags in front of the European Commission building in Brussels, Belgium, on Dec. 28, 2023. Photo for illustrative purposes. (Dursun Aydemir/Anadolu via Getty Images)
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The EU has drafted a proposal that would enable Ukraine to receive profits generated by Russian assets frozen in the EU countries as early as July, Bloomberg reported on March 19, citing the documents.

Ukraine's Western partners and other allies froze around $300 billion in Russian assets at the start of the full-scale invasion in 2022. Roughly two-thirds are held at the Belgium-based financial services company Euroclear.

The proposal, which is to be discussed by EU leaders in Brussels later this week, would involve seizing sanctions-related profits generated since February this year, the Financial Times reported.

Kyiv would get an estimated 3 billion euros ($3.3 billion) a year to boost its defense industry and purchase weapons, according to Bloomberg. An unspecified sum of profits generated since Feb. 15 would be allocated to Ukraine bi-annually until the lifting of sanctions via the European Peace Facility, used for defense aid, and through the 50-billion-euro ($54 billion) Ukraine Facility, the outlet said, citing the documents.

Profits generated before February would continue to be immobilized before being transferred to the EU within five years, the draft reportedly read.

Polish Foreign Minister Radoslaw Sikorski told journalists after meeting other EU foreign ministers in Brussels on March 18 that they had reached  "a political decision, although not a legal one."

The Guardian reported last week that the European Commission may propose a plan to confiscate 27 billion euros ($29 billion) in profits generated by frozen Russian assets before the meeting of EU prime ministers on March 21.

The debate on using frozen Russian assets for Ukraine's benefit is also taking place on the other side of the Atlantic. Unlike in the EU, U.S. officials have been pushing to seize the assets themselves and send them to Ukraine.

U.S. Treasury Secretary Janet Yellen called funneling the funds to Ukraine "necessary and urgent," and American lawmakers are currently discussing the REPO Act as a possible way to fund Kyiv using Russian sovereign assets.

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