EU Deploys Frozen Russian Asset Revenue to Ukraine

European Union diplomats in Brussels reached a consensus Wednesday to deploy frozen Russian state assets to assist Ukraine in its defense against Russia’s ongoing invasion, Axios reported.

Since February 2022, the West has frozen about $300 billion in sovereign Russian assets.

Ukraine, now in its third year of defending against Russia’s military superiority, is in dire need of additional financial and military support, with delays in U.S. aid having exacerbated ammunition shortages.

Belgium, currently presiding over talks in the European Council, said on X that diplomats had tentatively agreed to allocate the “extraordinary” revenues from Russia’s assets to Ukraine’s recovery and military defense.

“There could be no stronger symbol and no greater use for that money than to make Ukraine and all of Europe a safer place to live,” said European Commission President Ursula von der Leyen.

Approval from European capitals is anticipated later this month.

According to Reuters, under the plan, Ukraine will receive between $2.7-3.3 billion (2.5-3 billion euros) annually from interest generated by the frozen assets.

Most of these funds, 90%, will flow through the European Peace Facility fund to procure weapons for Ukraine, with the remainder earmarked for reconstruction and economic recovery.

Neutral countries, such as Austria, Ireland, Malta, and Cyprus, can refrain from procuring weapons and instead choose to concentrate on offering humanitarian assistance, according to Politico.

Ukrainian officials, including Prime Minister Denys Shmyhal, have urged the EU and G7 nations to seize the assets themselves for Ukraine’s defense and recovery.

However, European officials have refrained from direct confiscation due to legal and financial risks. There are concerns that Moscow could retaliate by targeting Western assets in Russia or pursuing legal challenges.

In contrast, the U.S. has taken significant strides toward direct seizure.

Last month, Congress passed legislation empowering President Joe Biden to seize Russian foreign exchange reserves in the U.S. under the Rebuilding Economic Prosperity and Opportunity for Ukrainians Act.

A task force has identified a minimum of $5 billion in Russian central bank assets within the U.S. banking system. However, it is improbable that the United States will pursue seizures unilaterally, as it is awaiting consensus from other Western nations, the Associated Press reported.