Commission welcomes Council decision on the use of proceeds from immobilised Russian assets for Ukraine

Use of proceeds from immobilised Russian assets for Ukraine

The Commission welcomes the formal decision taken in the General Affairs Council on the Commission's and High Representative's proposal to use the proceeds from immobilised Russian assets for Ukraine.

Next Steps

The decisions will enter into force after their publication in the Official Journal.

Resources will be available to support Ukraine starting from July 2024, with bi-annual payments.

While the Ukraine Facility provides opportunities to support emergency rehabilitation, recovery and reconstruction, Ukraine ' s most pressing needs in defence can be met through the European Peace Facility (EPF), and, once adopted, the European Defence Industry Programme (EDIP). In 2024, 90% will be devoted to the supply of military equipment through the assistance measures funded under the EPF and 10% for the EU budget. Within the share for the EU budget in 2024, the full allocation will be devoted to the Ukraine Facility.

The decisions allow prioritisation of needs that are likely to shift over time. The distribution will be reviewed annually with the first review by 1 January 2025.

Background

After Russia launched its illegal invasion of Ukraine, the international community prohibited any transaction related to the assets and reserves of the Central Bank of Russia. As a result, EUR 260 billion of Central Bank of Russia assets worldwide are “ immobilised” with more than two thirds of them in the EU (about EUR 210 billion). Depending on interest rates, revenues generated from these immobilised assets are likely to yield around EUR 2.5-3 billion a year for the benefit of Ukraine.

On 12 February 2024, the EU clarified the rules on how the immobilised assets and reserves should be managed ( “ Step 0”) and decided that central securities depositories (CSD) holding reserves and assets from the Central Bank of Russia worth more than EUR 1 million should set these revenues apart ( “ Step 1”). Since 15 February 2024, the CSD are not allowed to dispose of the related net profits, or distribute them to shareholders. These revenues are not the property of Russia, and they only accrue because of decision to immobilise these assets. They are subject to national taxation.

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