EU court upholds sanctions on Russian depository linked to war financing, €70 bln may be used to support Ukraine – Bloomberg

Russia's National Settlement Depository (NSD)  has lost its case to overturn European Union sanctions imposed over its role in war financing. These 70 billion euros can be used to help Ukraine.

Bloomberg reports this.

According to the publication, the Russian depository came under EU sanctions in 2022, when the bloc said that by being the main custodian of Russian securities, this organization allowed the Russian government to mobilize its resources to support military operations.

The EU judges ruled that the NSD "failed to prove" that the European Union "was mistaken in concluding that this enterprise is a systemically important financial institution that plays a significant role in the functioning of the financial system of Russia."

According to one of the sources familiar with the situation, about 70 billion euros are currently frozen in the depository of Euroclear, the Belgian clearing house.

The source added that these assets are currently not being used to generate windfalls, which are transferred as financial support to Ukraine, but this court ruling could open the way for them to be used and generate additional income in the future, as the EU did with the assets of the Russian central bank.

According to the Euroclear representative, the contingency fee for Ukraine will come from the Central Bank of Russia's assets starting on February 15, 2024.

For reference:

At the G7 Summit in Italy on June 14, the leaders of the G7 nations agreed to provide Ukraine with approximately 50 billion US dollars by the end of the year. These funds will be managed and reimbursed using future profits from Russian assets frozen in the European Union and other jurisdictions.

The countries of the European Union will not currently participate directly in the $50 billion loan that the "Big Seven" group plans to provide to Ukraine.

Subsequently, on June 24, the European Union countries approved the first tranche of military aid for Ukraine in the amount of 1.4 billion euros, which will come from the revenues from frozen Russian assets.

It is worth adding that the United States is ready to lend Ukraine $50 billion, which will be repaid with profits from frozen Russian assets, provided that the European Union can extend sanctions against Moscow indefinitely.

According to open information, Euroclear currently has 192 billion euros of Russian Central Bank assets on its balance sheet. The EU is looking for legal mechanisms to deal further with these frozen resources and the interest accrued on them, which has reached €5 billion over the past two years.