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Politico: EU retains €5 billion Russian frozen asset profits, blocks transfer to Ukraine

The EU decides to keep €5 billion in profits from frozen Russian assets in 2022-2023 instead of transferring it to Ukraine, as a buffer allowing payment for ongoing and potential Russian lawsuits, per Politico.

byYuri Zoria

28/03/2024

2 minute read

Frozen Russian assets. Illustrative photo via RT

Politico: EU retains €5 billion Russian frozen asset profits, blocks transfer to Ukraine

The European Union has decided to withhold €5 billion in profits generated in 2022 and 2023 from frozen Russian assets rather than transfer the funds to Ukraine, Politico reports. The substantial sum represents earnings from investing Russia’s central bank reserves, and other state assets immobilized across Europe through sanctions over Moscow’s invasion of Ukraine that started in February 2022.

Euroclear, the Brussels-based securities depository holding the vast majority of these frozen Russian assets valued at €192 billion, confirmed to Politico that the €5 billion in profits “are separate from ‘business as usual’ earnings.” The clearinghouse stated it is retaining those profits “until further guidance” instead of distributing them to shareholders.

The European Commission proposed using 90% of frozen Russian assets in Europe, worth €2.5-€3 billion annually, for ammunition and weapons for Ukraine. However, only revenues after 15 February 2024, are eligible, while earlier profits will stay with Euroclear.

According to a draft EU proposal, “seen by Politico but not yet made public,” the investment income from 2022 and 2023 will be kept as a buffer to cover “expenses, risks, and losses” Euroclear could face from ongoing and potential lawsuits filed by Russia over its frozen assets. An anonymous Belgian official told Politico that Moscow has already launched 94 such legal challenges in Russia demanding repayment.

However, Ukrainian officials like Justice Minister Denys Maliuska counterargued that €5 billion is an “exorbitant amount” simply for litigation provisions. He noted to Politico that Euroclear itself reported only €34 million in direct income losses from the impacts of Russia’s war.

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