Ukraine Peace Deal Could Include Defreezing $300B Russian Assets

The U.S. government has reportedly proposed transferring approximately $300 billion in frozen Russian assets to a special escrow account as part of a potential peace deal to resolve the conflict between Russia and Ukraine.

This proposal aligns with ongoing Western financial and military support for Ukraine.

Outgoing U.S. President Joe Biden’s administration has pushed for the establishment of an escrow account to hold Russian assets, CNN reported citing two senior administration officials. This fund would be released to Russia only as part of a negotiated settlement with Ukraine. Biden’s advisors have reportedly been working to secure European Union (EU) support for the plan before his presidency ends.

Although President-elect Donald Trump’s team has not opposed the proposal, European partners have expressed reservations. They argue that confiscating Russian funds outright could violate international law. Critics in Europe also warn that setting such a precedent could undermine global financial stability.

Since Russia’s invasion of Ukraine in February 2022, the G7 nations have immobilized over $325 billion in Russian sovereign assets. The U.S. Treasury has allocated $20 billion in profits generated from these frozen funds under the G7’s Extraordinary Revenue Acceleration (ERA) Loans initiative. These funds are restricted to humanitarian and institutional purposes in Ukraine, avoiding direct military applications.

In December 2024, Ukrainian Prime Minister Denys Shmyhal confirmed the receipt of $1 billion from frozen Russian funds. The first tranche of a planned $20 billion under the G7 initiative, this transfer aimed to strengthen Ukraine’s economic resilience during the ongoing conflict.

The EU has also directed €390 million ($402 million) of frozen assets toward Ukraine’s defense industry through the "Danish model" financing initiative. This program has financed weapons like long-range drones and anti-ship missiles, with Denmark, Sweden, and Iceland contributing alongside asset interest.

The Kremlin has strongly criticized Western measures to immobilize and redirect Russian assets. Russian President Vladimir Putin described the sanctions as unprecedented but maintained that they have not inflicted irreparable damage on the Russian economy. Deputy Chairman of Russia’s Federation Council Committee on International Affairs Andrei Klimov has called for investigations into the legality of transferring these assets to Ukraine.