Ukraine Slams Euroclear’s Payout to Western Investors From Frozen Russian Funds
Ukraine has criticized a recent decision to distribute €3 billion ($3.4 billion) from frozen Russian assets to compensate Western investors, warning the move threatens European unity and weakens the West’s leverage against Moscow, The Gaze reports, citing Reuters.
The funds, held by the Belgian-based clearinghouse Euroclear, were redirected last month to reimburse Western investors who lost money when Russia retaliated by seizing foreign-held assets. Ukraine, however, argues that such a payout prioritizes corporate interests over justice for war victims and contradicts the principles of international law.
“If private investors are compensated before the victims of war, it won’t be justice,” said Iryna Mudra, Deputy Head of the Office of the President of Ukraine. “It creates a perception of inconsistency, of Europe wavering in its resolve.”
Ukraine has long advocated for the full use of the approximately €300 billion in frozen Russian assets to fund reconstruction and defense. Officials in Kyiv fear the Euroclear payout sets a dangerous precedent, undermining efforts to use Russia’s central bank funds to hold the Kremlin financially accountable for its war of aggression.
“International law requires that the aggressor make full reparation to the victim, not to investors who knowingly entered a high-risk jurisdiction,” Mudra emphasized.
The European Union last year revised its sanctions framework, enabling Euroclear to redirect some of the proceeds. Belgian authorities approved the €3 billion disbursement in March, though EU officials maintain the move is in line with existing regulations.
Yet Ukrainian leaders are concerned that even small steps away from unity risk sending the wrong message, especially as Russian President Vladimir Putin reportedly ties resolution of the asset freeze to his conditions for ending the war.
“If [this money] is returned to Russia, it will be converted into tanks, missiles, drones, training of new troops,” Mudra warned.
“The world must demonstrate that unlawful war brings irreversible financial consequences.”
Sanctions experts also raised concerns. “It is mind boggling that the priority is to reimburse corporate interests rather than spend the money defending Ukraine,” said Jacob Kirkegaard of the Peterson Institute for International Economics.
While Euroclear’s payout did not impact the Russian central bank’s frozen reserves — a core component of future reconstruction plans — Ukraine insists that any compromise on asset use chips away at the EU’s moral and strategic leverage.
As The Gaze previously reported, in a significant move that intensifies the economic standoff between Russia and the West, Euroclear plans to redistribute €3 billion ($3.4 billion) in frozen Russian funds to compensate Western investors whose assets were seized by Moscow.