European Union Council Adopts Decision on Management of Frozen Russian Assets
The Council of the European Union has adopted a decision and regulatory rules defining the obligations of the EU Central Securities Depositories (CSDs) holding frozen assets and reserves of the Central Bank of Russia.
This is stated in a statement on the website of the European Council, Ukrinform reports.
In particular, the EU Council has decided that CSDs holding CBR assets worth more than €1 million should separately account for extraordinary cash balances accumulated due to EU restrictive measures and should also keep the corresponding income separately. In addition, depositories are prohibited from disposing of the profits.
The EU Council recalled that after Russia's full-scale invasion of Ukraine, the EU, in coordination with its international partners, decided to ban any operations related to the management of reserves and assets of the Central Bank of the Russian Federation. As a result of this ban, the relevant assets of financial institutions in EU member states have been "immobilised".
"Today's decision, in line with the G7 position, clarifies the ban on these transactions, as well as the legal status of income received by CSDs in connection with the holding of Russian blocked assets, and sets out clear rules for institutions holding them," the document says.
As noted, given the risks and costs associated with holding the assets and reserves of the Central Bank of Russia, each CSD may apply to its supervisory authority for permission to release a portion of this net profit, subject to compliance with the requirements for authorised capital and risk management.
Such a decision allows the Council to establish financial contributions to the EU budget collected from these net profits to support Ukraine, its recovery and reconstruction at a later stage. These financial contributions can be channelled from the EU budget to the Ukraine Fund, on the establishment of which the Council and the European Parliament reached a preliminary agreement on 6 February 2024.