Profits from EU-held Russian assets worth €260 billion will go to Ukraine – Ministry of Justice

The EU has been diligent in identifying and freezing Russian assets banked within its jurisdiction. The frozen money totals €260 billion, €210 billion of which is held in Belgium and Luxembourg.

Source: Iryna Mudra, Deputy Minister of Justice

"The first step is to consolidate these assets in a single Euroclear account (Euroclear being an investment bank that performs certain central banking duties for the EU). Yes, this will require approval from all 27 [EU member] countries, but the European Commission has promised to expedite the process and appears to be delivering on that pledge."

"The next step", as Mudra outlines in a post to her Facebook page, "should be to ensure that [all EU nations and relevant financial institutions] are on the same page when it comes to redirecting profits earned on Russian assets to Ukraine."

But we were also reassured regarding this issue - ‘yes, we’re working on it; hang in there,’ they said," recalled the Deputy Minister.

The Ukrainian delegation headed by Minister Denys Maliuska has held meetings with EU Commissioner for Justice Didier Reynders, top managers of European Commission directorates and the government of Belgium. Brussels has held the EU presidency since 1 January 2024, so all of the difficult issues surrounding Russia’s frozen assets are now being hashed out.

"Sovereign assets exist mostly in the form of bonds and other financial instruments. As these instruments reach maturity, they are converted to cash reserves. Almost all assets are held in accounts at large depository institutions such as Euroclear or central or reserve banks.

The excess profits from these financial instruments were discussed during today's meetings. And the EU will continue its efforts to locate and inventory [all assets connected to Russia], a fact that EU ambassadors also confirmed yesterday," noted the deputy head of the Ministry of Justice.

Iryna Mudra stressed that Belgium is on the side of Ukraine, "and [that] there is universal support for the redirection of profits earned by these seized assets towards Ukraine, to aid in its reconstruction."

The EU is currently discussing the political, legal, and economic risks of such a move.

"But it’s looking like more of a yes than a no. The Belgian government, the Ministry of Justice and the Foreign Ministry have assured us that they will do everything in their power to ensure that the issue of redistributing excess profits is resolved during the country's EU presidency term," Iryna Mudra concluded.

The idea of confiscating the principal of Russia’s frozen assets, as opposed to just the interest earned, was also discussed during the meetings.

"The EU is still reluctant to discuss this because they prefer a step-by-step approach. The G7, however, is actively mulling this idea, and opinion is shifting towards this tactic in the United States, as evidenced by legislation the country seeks to introduce," said Mudra, regarding the current situation.

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