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Supervisor Elham AbolFateh
Editor in Chief Mohamed Wadie

EU Agrees to Use Profits from Russia's Frozen Assets


Tue 21 May 2024 | 08:21 PM
European Union flag Source: Getty Images
European Union flag Source: Getty Images
Taarek Refaat

European Union member states approved on Tuesday a plan to use profits from frozen Russian sovereign assets to support Ukraine's recovery and military defence. The move will save Ukraine 3 billion euros ($3.3 billion) this year, 90% of which will go to the Ukrainian army, according to what Czech Foreign Minister Jan Lipavský posted on the “X” social media platform.

The G7 has frozen assets worth about $280 billion since Russia's invasion of Ukraine in 2022, with more than two-thirds of those assets located in the European Union. The vast majority of the funds are held by settlement giant Euroclear, based in Belgium, which has made net profits of around 3.9 billion euros since last year.

Under the EU plan, Ukraine will receive net profits from February 15 onwards. About 159 billion euros worth of frozen Russian assets have generated net profits of 557 million euros since that date, according to Euroclear's financial results for the first quarter.

Euroclear will retain profits made before February 15 to address any risks such as those arising from legal proceedings in Russia. The EU plan also includes a mechanism that allows the clearing house to retain more funds if these resources prove insufficient to meet sudden and unexpected risks.

EU affairs ministers in Brussels adopted the proposal after months of negotiations between member states amid concerns about potential legal challenges, the Russian response and risks to the stability of the euro. The assets are expected to generate about 5 billion euros annually, and Ukraine will receive assistance twice a year.