The EU has made available in support of Ukraine the first payment of €1.5bn generated from immobilized Russian assets. These extraordinary revenues generated by EU operators and held by central securities depositories (CSDs) from immobilised Russian sovereign assets were made available by Euroclear to the Commission as a first installment on 23 July. The money will now be channelled through the European Peace Facility and to the Ukraine Facility to support Ukraine’s military capabilities as well as to support the country’s reconstruction.
The immobilization of the Russian Central Bank’s assets is a result of EU sanctions against Russia, adopted in the wake of its war of aggression against Ukraine. The extraordinary revenues generated in this context by the EU operators do not belong to Russia and are held by CSDs. The EU has now started to channel these revenues to Ukraine.
Background
In response to Russia’s brutal and unjustified invasion of Ukraine, the European Union and its Member States adopted several packages of restrictive measures (sanctions) against Russia.
As part of these sanctions, the assets of the Central Bank of Russia held in the EU were immobilized. The prohibition on transactions related to the assets and reserves of the Central Bank of Russia and its affiliated entities leads to extraordinary and unusual accumulation of cash and deposits on the balance sheets of CSDs from maturing financial instruments and generates extraordinary revenue.
Following proposals by the Commission and the High Representative, in February 2024, the Council decided that central securities depositories holding more than €1 million worth of assets and reserves of the Central Bank of Russia that were immobilized as a result of EU sanctions must set aside extraordinary cash balances accumulating due to EU sanctions and may not dispose of the ensuing net revenues generated by the EU operators.
Following the proposals by the Commission and the High Representative in March, on 21 May 2024 the Council adopted a set of legal acts enabling the use of these net profits for the benefit of Ukraine.
More information
Q&A on first transfer of €1.5 billion of proceeds from immobilised Russian assets made available to Ukraine
The EU stands with Ukraine. Today we transfer €1.5 billion in proceeds from immobilised Russian assets to the defence and reconstruction of Ukraine. There is no better symbol or use for the Kremlin’s money than to make Ukraine and all of Europe a safer place to live.
Ursula von der Leyen, president of the European Commission
The first tranche of the windfall profits will provide concrete support on the ground. Notably, with €1.4 billion allocated to the European Peace Facility, we are set to finance the acquisition of priority military equipment, namely air defence, ammunition for artillery – and also through procurement for the Ukrainian defence industry. We are not only providing military support to Ukraine but also made in Ukraine, contributing to Ukraine’s resilience in combating Russia’s war of aggression.
High Representative/Vice President Josep Borrell
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