European Commission to Transfer First €1.5B Income from Russian Assets to Kyiv

The transfer will take effect in July this year and will be 90% earmarked for defense and 10% for reconstruction
  • Defensemirror.com bureau
  • 10:25 AM, June 11, 2024
  • 1291
European Commission to Transfer First €1.5B Income from Russian Assets to Kyiv
EC President Ursula von der Leyen at Ukraine Recovery Conference (URC2024) on June 11, 2024

European Commission President Ursula von der Leyen announced in Berlin today that Ukraine will receive €1.5 billion next month from income generated by frozen Russian assets.

The transfer, scheduled to take effect in July, is set to allocate 90% of the funds for defense purposes and the remaining 10% for reconstruction efforts.

"At last year's conference, I talked about transferring proceeds from frozen Russian assets to Ukraine. And now we are doing this - within the framework of international law and while ensuring the stability of financial markets," von der Leyen stated.

This move comes as Western countries continue to impose stringent sanctions on Russia following its military actions in the Donbass region. Moscow’s special operation was initiated on February 24, 2022, prompting the EU to freeze assets of the Central Bank of the Russian Federation.

In a related development, U.S. Treasury Secretary Janet Yellen mentioned on June 4 that the G7 is considering providing Ukraine with a loan using income from these Russian assets. Discussions are ongoing among Washington, allies, and partners about leveraging these assets to support Kyiv.

Despite this, the White House has acknowledged the difficulty of unilaterally seizing the frozen Russian assets. On May 24, reports indicated that the European Union had not yet finalized the process for transferring proceeds from these assets to the European Peace Fund, which aims to provide military assistance to Ukraine.

Earlier, on May 21, the European Commission outlined a plan to make biannual payments to Kyiv from profits derived from the frozen assets. This was reinforced by an official decision from the EU Council, allowing the use of net income from these assets for Ukraine's military assistance.

Since February 2022, the G7 countries, the EU, and Australia have collectively frozen €260 billion of Russian Central Bank assets.

Liv Mostry, head of the international Euroclear platform in Belgium, cautioned in February that transferring proceeds from these assets to aid Ukraine closely resembles indirect confiscation, potentially impacting financial markets similarly to direct seizure.

 

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