EU takes first step to use benefits from frozen Russian assets in Ukraine

Despite threats and warnings from the Kremlin, the European Union maintains immobilized nearly 200 billion euros of assets of the Central Bank of Russia, held in one of the largest depositaries such as Euroclear as a consequence of the restrictive measures imposed on Moscow for its war in Ukraine. This week, the Twenty-seven took the first step to force central securities depositories to separately account for extraordinary profits with a view to using these profits to finance the reconstruction of Ukraine.

As soon as the invasion occurred, on February 24, 2022, one of the measures that the EU first implemented was to prohibit transactions related to the management of reserves and assets of the Central Bank of Russia. The result was that billions were “withheld.” Estimates point to a figure close to 200 billion, although it would be closer to 300 billion if the assets retained by other G7 countries are added, which, like the EU, have been discussing for months about how to use this money to help Kiev in a monumental task such as the reconstruction of the country.

Brussels presented a proposal in December. The decision adopted by the EU, in line with the position maintained by the G7, will prohibit organizations like Euroclear from using the profits generated by frozen assets and sets clear rules on how they will have to act in the future. For example, the central securities depositories holding more than €1 million in assets of the Russian entity will have to account separately the extraordinary cash balances that accumulate as a result of the restrictive measures. They will also have to keep the corresponding income separate and will not be able to liquidate the resulting net profits.

Second stage

This is a first step that will pave the way for the Twenty-Seven to decide in the future whether to establish a financial contribution to the European budget through the new facility for Ukraine – endowed with 50 billion and agreed on February 6 – with with a view to financing the recovery and reconstruction from the country. In addition, and given the risks and costs involved in holding assets and reserves of the Central Bank of Russia, each central securities depository may request its supervisory authority to authorize the release of a part of those net profits in order to meet the requirements legal matters regarding capital and risk management.

“I welcome the Council’s decision” but “we encourage the adoption of new measures that allow its practical use in the interests of Ukraine. These measures must be ambitious and rapid. Ukraine is ready to continue working with its partners to achieve its ultimate goal: putting the assets Russians at Ukraine’s disposal. The aggressor must pay,” the Ukrainian Foreign Minister highlighted this Monday, Dmytro Kuleba.


The debate on the use of frozen assets has been on the table of European leaders for months, although fear of the impact that this measure could have on the financial stability of the Old Continent and the confidence in the euro has led Brussels to act with extreme caution and a very measured plan. In fact, what the Twenty-seven have done for now is simply adopt legislation that requires Euroclear to manage and account for profits separately generated by the immobilized Russian assets and prevent them from being distributed in the form of dividends to shareholders and third parties. Enabling that money to be used will require a new proposal that has not yet been presented.

What the Twenty-Seven do advance is in a new sanctions package against Russia, the thirteenth, with the intention of approving it on the second anniversary of the invasion. The idea, in addition to including new names on the list of people affected by restrictive measures, is to also punish companies of China and other countries like Serbia either Türkiye to help the Kremlin avoid international sanctions against dual-use products.

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