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Media: G7 to create Ukraine aid fund using income from frozen Russian assets

by Chris York June 11, 2024 5:58 PM 2 min read
G7 leaders meet in Hirosima, Japan, in May 2023. (Pool/Getty Images)
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The Group of Seven (G7) will create a fund to support Ukraine using the income generated from frozen Russian assets, Nikkei Asia reported on June 11.

The fund will reportedly be created under an international organization such as the World Bank, with contributions in the form of “Extraordinary Revenue Acceleration” (ERA) loans. G7 leaders plan to announce the initiative in a joint summit in Italy, which starts on June 13.

The U.S. has indicated it will provide $50 billion, while the U.K., Canada, and Japan are also considering contributions, Nikkei Asia reported. Japan may channel its support through the Japan International Cooperation Agency, focusing on nonmilitary assistance.

The Kyiv Independent could not independently confirm Nikkei Asia's report.

While Western countries have frozen $300 billion in Russian assets, they can only access the income generated by these funds, approximately $3.2 billion annually. By setting up a fund with loans to be repaid using this income, countries can offer immediate support to Ukraine beyond this amount.

The U.S. proposed seizing Russian assets outright in accordance with its recently passed REPO act, but the European Union has been more hesitant, fearing legal and fiscal pitfalls of confiscation.

Instead, Brussels seeks to use windfall profits generated by the frozen assets and funnel them to Kyiv.

Two-thirds of the frozen assets are located within the European Union, much of it held by the Belgian clearinghouse Euroclear. The EU has already established a framework for sending investment income from these assets to Ukraine, and European G7 members do not plan to participate in the new program for now.

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