EU Council approves resolution allowing use of frozen Russian assets for Ukraine

The Council of the EU approved the resolution, which opens the way to a decision on the use of profits from the frozen assets of the Russian Federation for Ukraine.

This is reported on the Council of the EU website.

"The Council today adopted a decision and a regulation clarifying the obligations of Central Securities Depositories (CSD) holding assets and reserves of the Central Bank of Russia (CBR) that are immobilized as a consequence of EU's restrictive measures," the message reads.

It is noted that this decision paves the way for the Council to adopt a decision on the possible creation of a financial contribution to the EU budget from these net profits to support Ukraine and its recovery and reconstruction at a later stage. This financial contribution can be directed through the EU budget to the Fund for Ukraine, on which the Council and the European Parliament reached a preliminary agreement on February 6, 2024.

It is emphasized that after Russia launched its illegal and unjustified full-scale war against Ukraine in February 2022, the EU, in coordination with international partners, decided to prohibit any operations related to the management of reserves and assets of the Central Bank of the Russian Federation. As a result of this ban, the relevant assets held by financial institutions of the EU member states are "immobilized."

Today's decision, in accordance with the position of the G7, clarifies the ban on these transactions and the legal status of the income received by central depositories in connection with the ownership of Russian immobilized assets and establishes clear rules for the entities that own them.

"The Council decided in particular that CSDs holding more than €1 million of CBR's assets must account extraordinary cash balances accumulating due to EU restrictive measures separately and must also keep corresponding revenues separate. In addition, CSDs shall be prohibited from disposing of the ensuing net profits," the release reads in regard to the decision.

According to the resolution, taking into account the risks and costs associated with the maintenance of assets and reserves of the Central Bank of Russia, each central securities depository may apply to its supervisory authority for permission to release a share of this net profit in view of compliance with the statutory requirements capital and risk management.

For reference:

From 2022 to 2023, and as of the beginning of August, the Security Service of Ukraine seized the assets of Russian business people financing the war, worth almost 190 billion hryvnias.

In addition, the assets of Russian oligarchs are being seized abroad:

• Great Britain has frozen more than 18 billion pounds ($23 billion) of assets and imposed sanctions against more than 1,550 Russians since the Russian Federation's full-scale invasion of Ukraine and as of mid-June this year.
• In the Czech Republic, the assets of Russian oligarch Volodymyr Yevtushenkov, who is close to Russian President Vladimir Putin, were frozen.
• Poland also offered to give the frozen assets of the Russian Federation to Ukraine and EU countries.
• In Germany, blocking Russian assets worth more than 4 billion euros was possible.
• The EU is studying the procedure for the confiscation of 200 billion euros of frozen assets of the Russian Central Bank. The European Commission is also developing its proposals.
• Belgium created a special fund to support Ukraine in the amount of 1.7 billion euros, filled with taxes on Russian assets frozen in the country.
• In July, Italy announced that it had frozen the assets of Russian oligarchs worth about 2 billion euros after the Russian Federation invaded Ukraine last year.
• European Union ambassadors agreed on January 29 to use the profits from frozen Russian assets to help Ukraine.