EU Releases EUR 1.5 Billion from Frozen Russian Assets to Support Ukraine's Military and Reconstruction Efforts

In a significant move of solidarity with Ukraine, the European Union (EU) has made its first payment of EUR 1.5 billion for military support and reconstruction efforts. The funds were generated from immobilized Russian assets, according to a press release on the European Commission's website.

The extraordinary revenues, held by central securities depositories (CSDs), were made available to the Commission by Euroclear as a first installment on July 23. The money will now be channeled through the European Peace Facility and the Ukraine Facility to bolster Ukraine's military capabilities and assist in the country's reconstruction.

The immobilization of Russian Central Bank assets is a result of EU sanctions imposed in response to Russia's war of aggression against Ukraine. These revenues generated by EU operators do not belong to Russia but are being directed toward Ukraine's benefit.

European Commission President, Ursula von der Leyen, emphasized the EU's support for Ukraine, stating, "The EU stands with Ukraine. Today we transfer EUR 1.5 billion in proceeds from immobilized Russian assets to the defense and reconstruction of Ukraine. There is no better symbol or use for the Kremlin's money than to make Ukraine and all of Europe a safer place to live."

High Representative/Vice-President, Josep Borrell, highlighted that the first tranche of funds would provide tangible support on the ground. With EUR 1.4 billion allocated to the European Peace Facility, priority military equipment such as air defense and ammunition for artillery will be funded. The procurement of equipment from the Ukrainian defense industry will also be supported, which will contribute to Ukraine's resilience in confronting Russia's war of aggression.

The EU and its Member States have implemented several packages of restrictive measures, including sanctions, against Russia in response to its unjustified invasion of Ukraine. As part of these sanctions, the assets of the Russian Central Bank held in the EU were immobilized.

In February 2024, the Council decided that central securities depositories holding immobilized assets and reserves of the Russian Central Bank amounting to more than EUR 1 million must set aside extraordinary cash balances. These balances result from the prohibition on transactions related to the assets, and the ensuing net revenues generated by EU operators cannot be disposed of.

Following proposals by the Commission and the High Representative, legal acts were adopted in May 2024, enabling the use of these net profits to benefit Ukraine.

The release of EUR 1.5 billion from frozen Russian assets marks a significant step in the EU's support for Ukraine in the face of Russian aggression. The funds will strengthen Ukraine's military capabilities and contribute to the country's much-needed reconstruction efforts.