Ukraine will not receive €5bn in profits from frozen Russian assets accumulated in 2022-2023, according to a response from the Brussels-based securities depository Euroclear to Politico, Komersant ukrainskyi reports.
This month, the European Commission finally proposed to use 90% of the proceeds from frozen Russian assets held in Europe to buy weapons for Ukraine. According to the EU executive, this will generate between 2.5 and 3 billion euros a year.
However, this only applies to profits accumulated after 15 February 2024, the date of the legislative change. Profits earned before then will remain with Euroclear, the Brussels-based securities depository.
In 2022-2023, Euroclear collected €5 billion in income from Russian assets, and Ukraine was counting on these funds. As it turned out, the EU is going to hold on to these funds in case of future Russian claims.
“According to the Commission, the €5 billion held by Euroclear is a buffer to pay for current and potential legal claims in Russia and other countries… [These funds are] earmarked for costs, risks and losses incurred by central securities depositories due to the war in Ukraine,”
– the newspaper writes.
Ukrainian Justice Minister Denys Malyuska called the decision a “mistake” during a discussion in Brussels last week.
“I have never heard that €5 billion is a buffer for Euroclear. This is too much money to be a buffer,”
– the minister said.
Currently, according to various sources, about $260-300 billion of Russian assets are frozen worldwide. More than 2/3 of them are blocked in the EU. These funds generate about $3 billion in profit per year. There is an ongoing discussion among Ukraine’s partners about how these funds could be used to help Ukraine. It is known that the United States is inclined to transfer all frozen funds to Ukraine, while the European Commission has decided to transfer only the income from frozen assets. However, a consensus has not yet been reached in the EU.