EU resolution paves way for utilizing frozen Russian assets for Ukraine

February 13,2024 500
EU resolution paves way for utilizing frozen Russian assets for Ukraine

The European Union Council approves rules defining the legal status of proceeds from frozen Russian assets within the EU and mandates their storage in separate accounts. The decision, part of establishing a mechanism to use income from Russian assets abroad for Ukraine, was adopted on February 12. [In the context of proceeds, this refers to income from Russian securities within the EU, as well as payments related to them. Returning these funds to Russia is impossible, so the EU keeps the finances on deposits – ed.].

The Council decided in particular that CSDs holding more than €1 million of CBR’s assets must account extraordinary cash balances accumulating due to EU restrictive measures separately and must also keep corresponding revenues separate. In addition, CSDs shall be prohibited from disposing of the ensuing net profits,” the message reads.

Each country’s central security depository may request its supervisory authority to authorise “a release of a share of those net profits”

This decision paves the way for the Council to decide on a possible establishment of a financial contribution to the EU budget raised on these net profits to support Ukraine and its recovery and reconstruction at a later stage,” the European Union Council emphasised.

As a result of sanctions against Russia in the European Union, Australia, and G7 countries, approximately €260 billion of assets belonging to the Central Bank of Russia have been frozen. Meanwhile, more than two-thirds of this sum is located in the European Union, according to the report.

Earlier, at the meeting of EU countries on January 29, the permanent representatives of the EU countries adopted a decision to create a separate account for the transfer of interest from taxed profits of frozen Russian assets.

Cover: Shutterstock

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