EU Makes First €1.5 Billion Payment to Ukraine from Frozen Russian Assets

Today, the European Union is disbursing the first tranche of the €1.5 billion payment received from frozen Russian assets to Ukraine. This is stated in a statement by the European Commission.

The money will now be channelled through the European Peace Fund and to Ukraine to support Ukraine's military capabilities and to support the country's reconstruction.

The freezing of the Russian Central Bank's assets is a consequence of EU sanctions against Russia, which were imposed in the wake of its war of aggression against Ukraine. The extraordinary revenues received by EU operators in this context do not belong to Russia, but are held by central depositories. The EU has now begun to channel these revenues to Ukraine.

In response to Russia's brutal and unjustified military invasion of Ukraine in February 2022, the European Union and its member states adopted several packages of sanctions against Russia.

As part of these sanctions, the assets of the Central Bank of Russia located in the EU were frozen. The ban on transactions involving the assets and reserves of the Central Bank of Russia and its affiliates has resulted in an extraordinary and unusual accumulation of cash and deposits on the balance sheets of central depositories from maturing financial instruments and generated extraordinary income.

Following proposals from the Commission and the High Representative, in February 2024, the EU Council decided that CSDs holding assets and reserves of the Central Bank of Russia in excess of EUR 1 million that have been immobilised by EU sanctions must set aside extraordinary cash balances accumulated due to EU sanctions and cannot dispose of subsequent net income generated by EU operators. These net profits will go to Ukraine.