EU ministers agree to use profits from frozen Russian assets to help Ukraine

In the light of Russia’s continued war of aggression against Ukraine, the Council of the European Union agreed on May 21 on the use of profits from frozen Russian assets to help Ukraine, a statement by the Council of the EU said.

The statement said that EU ministers adopted a set of legal acts ensuring that the net profits stemming from unexpected and extraordinary revenues accruing to central securities depositories (CSDs) in the EU, as a result of the implementation of the EU restrictive measures, will be used for further military support to Ukraine, as well as its defence industry capacities and reconstruction.

This means that the CSDs holding Russian sovereign assets and reserves of more than a million euro will make a financial contribution from their corresponding net profits, accumulating since February 15 2024.

The amounts will be paid by the CSDs to the EU on a bi-annual basis, and will be used for further military support to Ukraine through the European Peace Facility, as well as with support to Ukraine’s defence industry capacities and reconstruction needs with EU programmes, on the basis of European Peace Facility 90 per cent and EU programmes financed from the EU budget 10 per cent.

This allocation will be reviewed yearly, and for the first time before January 1 2025, the statement said.

CSDs will be allowed to provisionally retain a share of about 10 per cent of the financial contribution to comply with statutory capital and risk management requirements in view of the impact due to the war in Ukraine, with regard to the assets held by CSDs.

On February 12 2024, the Council of the EU decided that CSDs holding more than one million euro of assets and reserves of the Central Bank of Russia (CBR) that were immobilised as consequence of EU’s restrictive measures, must set aside extraordinary cash balances accumulating due to EU restrictive measures, and may not dispose of the ensuing net profits.

(Photo: EC Audiovisual Service)

The Sofia Globe staff

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