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EU Initiates Use Of Russia's Embargoed Assets For Ukraine

EU Initiates Use Of Russia's Embargoed Assets For Ukraine
In a first step towards the bloc's goal of utilising the funds to finance the reconstruction of Ukraine, the EU said on Monday that it had passed a law setting aside windfall profits made on assets frozen by the Russian central bank.
After Moscow invaded Ukraine, the European Union (EU) and the Group of Seven (G7) froze almost 300 billion euros ($323 billion) in assets held by the Russian central bank. For more than a year, the EU and G7 have been discussing if and how these monies can be utilised.
The concept of outright asset confiscation has been raised by the US, but EU officials believe it would be too risky from a legal standpoint.
The bulk of these funds—two thirds of which are in the EU—are handled by Euroclear - Belgium's clearing house.
To now, only taxes on assets in Belgium have been allocated to a special fund managed by the Belgian government for Ukraine.
Central securities depositaries (CSDs), like Euroclear, will not be allowed to use net profits as a result of the bill that was approved on Monday, and they will need to keep the money from the Russian assets apart.
It is applicable to organisations that own assets held by the Central Bank of Russia valued at more than one million euros ($1.1 million).
“Today’s decision, in line with the G7 position, clarifies ... the legal status of the revenues generated by the CSDs in connection with holding of Russian immobilised assets and sets clear rules for the entities holding them,” said the Council of the EU, a legislative body that groups member states.
According to EU estimations, Ukraine might profit from these deals to the tune of almost 15 billion euros ($16.17 billion) over the next four years. In addition, the EU decided to give Kyiv help of 50 billion euros ($53.89 billion).
Dmytro Kuleba, the foreign minister of Ukraine, praised the news on X.
"We encourage further steps to enable their practical use for Ukraine's benefit. These steps must be ambitious and prompt," he said.
There were no comments from the Russian government on this issue.
According to Moscow, any attempt to obtain money for Ukraine by using frozen Russian assets as collateral would be unlawful and would face years of legal challenges from Moscow.

Christopher J. Mitchell

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