The European Union is disbursing its first payment of €1.5 billion to support Ukraine, derived from frozen Russian assets.
This information comes from the European Commission's press service.
On July 23, income from frozen Russian sovereign assets was transferred to Euroclear by the EU and central securities depositories (CSDs) as the initial tranche. These funds will now be directed through the European Peace Facility and the Ukraine Fund to bolster Ukraine's military capabilities and support the country's recovery.
The freezing of the Central Bank of Russia's assets resulted from EU sanctions against Russia in response to its aggressive war against Ukraine. The income collected by EU operators does not belong to Russia and is held in central depositories. The EU has now begun redirecting these funds to Ukraine.
In response to Russia's brutal and unjustified invasion of Ukraine, the European Union and its Member States adopted several packages of restrictive measures (sanctions) against Russia.
As part of these sanctions, the assets of the Central Bank of Russia held in the EU were immobilised. The prohibition on transactions related to the assets and reserves of the Central Bank of Russia and its affiliated entities leads to extraordinary and unusual accumulation of cash and deposits on the balance sheets of CSDs from maturing financial instruments and generates extraordinary revenue.
Following proposals by the Commission and the High Representative, in February 2024, the Council decided that central securities depositories holding more than €1 million worth of assets and reserves of the Central Bank of Russia that were immobilised as a result of EU sanctions must set aside extraordinary cash balances accumulating due to EU sanctions and may not dispose of the ensuing net revenues generated by the EU operators.
Following the proposals by the Commission and the High Representative in March, on 21 May 2024 the Council adopted a set of legal acts enabling the use of these net profits for the benefit of Ukraine.
