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EU agrees on new measures to isolate frozen Russian funds

by Nate Ostiller and The Kyiv Independent news desk February 12, 2024 7:28 PM 2 min read
The Russian Central Bank in Moscow on April 4, 2023. Western states have frozen $300 billion in reserves belonging to the bank. (Vlad Karkov/SOPA Images/LightRocket via Getty Images)
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The European Council agreed on Feb. 12 to a set of new measures targeting profits from frozen assets belonging to the Russian Central Bank, possibly paving the way for the revenue to be eventually redirected to Ukraine.

Western countries immobilized around $300 billion of the Russian Central Bank's assets at the start of the full-scale invasion. Since then, Washington, Brussels, and Kyiv have discussed legal ways of channeling these funds to aid Ukraine's reconstruction efforts but have yet to come to a definitive conclusion.

Group of Seven (G7) nations have pledged that Russian assets held in their jurisdictions would remain frozen until Moscow pays war reparations to Ukraine.

The EU proposed a plan on Dec. 12 to seize about 15 billion euros ($16.2 billion) in projected profits generated by frozen assets of Russia's Central Bank and transfer them to Ukraine.

The European Commission estimated the plan would generate about 3 billion euros ($3.2 billion) annually, or 15 billion from 2023-2027.

The plan would most directly impact Euroclear, a Belgium-based financial services company that holds about 191 billion euros ($205 billion) in Russian assets.

The European Council said on Feb. 12 that central securities depositaries (CSDs) holding more than 1 million euros ($1.07 million) in assets from the Russian Central Bank must separate any profits generated from the primary accounts.

Revenue must be isolated and monitored, and cannot be disposed of.

The decision is the next step in potentially enabling part of the frozen Russian assets to be ultimately redirected to help pay for Ukraine's reconstruction, the European Council said.  

The funds may be channeled through the EU budget in the future.

Opinion: Seizing Russia’s frozen assets is the right move
As Russia’s war against Ukraine continues to wreak havoc both regionally and globally, the Ukrainian people and their allies demonstrate remarkable determination and courage. But nearly two years after Russia launched its full-scale invasion, it is increasingly clear that the international community…
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