EU decides to return profits from Russian assets to Ukraine

Ambassadors of EU member states have agreed in principle to seize windfall profits from frozen Russian assets to finance the supply of weapons to kyiv.

Following Russia’s invasion of Ukraine in 2022, EU countries have frozen assets worth hundreds of billions of euros.

If the decision is approved at a meeting of EU finance ministers next Tuesday, the interest – worth up to €3bn (£2.5bn) a year – will be used to buy weapons for Ukraine.

European Commission chief Ursula von der Leyen said: “There could be no stronger symbol or greater purpose for this money than to make Ukraine and all of Europe a safer place or live. »

European Trade Commissioner Valdis Dombrovskis also welcomed the decision.

He added that the funds should reach Ukraine as quickly as possible, with the first tranche of €1 billion – intended to be used “mainly for military support” – ideally arriving in the country by summer.

“Russia will pay directly for its crimes,” Mr. Dombrovskis said.

Earlier this week, German Chancellor Olaf Scholz said that around 90% of revenues from the Russia freeze should be spent on arms purchases for Ukraine.

The value of frozen Russian assets in the EU alone is estimated at almost €211 billion (£181 billion).

The majority of the assets’ profits are currently held by Euroclear, a clearing house based in Belgium.

The expropriation of profits has been a topic of discussion among European officials and heads of state since the start of the war.

However, the money has so far not been used because EU members had opposed a 25% tax imposed by Belgian law. Belgium has now agreed to waive this tax.

European central bankers have also long been skeptical about setting a difficult legal precedent that could undermine global financial stability – and deter other countries from placing their safe-haven assets in the West.

The Kremlin has previously said that the seizure of interest earned on frozen Russian assets was a move toward the “destruction of the legal foundations of European and international law.”