EU Approves $1.6 Billion in Funds From Frozen Russian Assets for Ukraine

The funds will primarily go to bankroll Kiev’s war effort, EU Commission chief Ursula von der Leyen says

The European Union has decided to use profits from Russia’s “frozen assets” to support Ukraine in its conflict with Moscow, EU Commission head Ursula von der Leyen announced on Tuesday.

The bloc has agreed on a new aid package for Ukraine, which includes €1.9 billion ($2 billion) from the EU’s Ukraine facility, as well as approximately €1.5 billion ($1.6 billion) in unexpected profits “generated from the frozen Russian assets.”

The funds are expected to be allocated by the end of July, von der Leyen announced during the Ukraine Recovery Conference in Berlin.

“Around €1.5 billion from the unexpected profits will become available in July: 90% of these funds will go to defense, 10% to reconstruction. And, later this week, at the G7 Summit, we will further discuss how Ukraine can benefit even quicker from the proceeds of the frozen Russian assets,” she said.

The official dismissed concerns about the potential implications of the move for the global financial system, insisting the bloc has done it “in line with international law, and while ensuring the stability of financial markets.”

So far, neither of Kiev’s Western backers has chosen to seize the frozen assets themselves, with various legal concerns repeatedly raised over the potential move. Last week, the International Monetary Fund (IMF) reiterated its position that such a decision must have a very solid legal basis.

“We have made our position clear and public, which is that what is important for us, for the IMF, is that any actions taken have sufficient legal underpinnings and that they do not undermine the functioning of the International Monetary System. And so that position is clear, and we have stated it in public on many occasions,” IMF spokeswoman Julie Kozack said during a press conference.

Moscow has repeatedly criticized the West for freezing Russian sovereign assets, warning that any attempts to seize them will be met with a reciprocal response, with the assets, property, and businesses of Western companies in Russia set to be affected for the actions of their governments.