Euroclear Depository Earns €3 Billion from Frozen Russian Assets - Ukraine Could Benefit
International depository Euroclear has reported €3 billion in interest income from frozen Russian assets.
This information is included in Euroclear's financial report for the first nine months of 2023.
According to the depository, the profit from Russian assets is influenced by two factors:
- High interest rates.
- The amount of money Euroclear is obligated to invest.
Therefore, future earnings will depend on changes in interest rates and the size of invested funds in the context of the evolving sanctions regime. Euroclear expects that the growth of its cash balance will start stabilizing as the pace of blocked payments and repayments decreases.
Euroclear's management notes that the European Commission is considering various ways to use the profits earned from sanctioned assets to fund Ukraine's reconstruction.
This information will likely intensify discussions within the EU regarding the proposal to introduce a tax on income from investments in Russian assets and transfer the proceeds to support Ukraine.
Currently, the EU has postponed a decision on implementing a special tax due to disagreement among several member states, including Germany and France.
Since the start of the conflict in Ukraine, the EU has frozen assets of the Russian Central Bank worth over €200 billion. A significant portion of these funds is held in Euroclear depository. Additionally, the EU has frozen €24.1 billion in assets belonging to Russians and Russian companies subject to sanctions. Recently, the United States also froze $8 billion in Russian assets.
Currently, the United States and the European Union are exploring legal avenues to utilize the entire $300 billion of frozen Russian assets for the benefit of Ukraine. Meanwhile, Ukraine hopes to receive $300-500 billion from such assets.
On September 7, the United States announced that they would transfer confiscated assets of Russian oligarchs to Ukraine for the first time. This involves $5.4 million, which will go towards supporting Ukrainian veterans.
As previously reported by The Gaze, the Estonian government approved and submitted a resolution to parliament on directing frozen Russian assets towards compensating the losses suffered by Ukraine due to the war.
Estonian Prime Minister Kaja Kallas emphasized the importance of holding Russia accountable for its aggression. She believes that Estonia should set an example for other European countries in implementing such measures.