The London News Express

The European Union (EU) is taking steps to utilize the revenue from Russian assets frozen by sanctions to provide substantial aid to Ukraine. With the potential annual amount ranging from €2.5 billion to €3 billion, a significant breakthrough has been achieved through negotiations, signaling a major concession by Belgium, where a majority of these assets are held.

The strategic timing of Belgium’s holding of the EU presidency has seemingly influenced the thawing out of discussions, as the country is now more attuned to criticisms regarding the handling of Russian assets frozen by EU sanctions, predominantly managed by the Brussels-based securities clearance provider Euroclear.

Previously, the revenue generated from these assets faced a 25% tax from the Belgian government. This resulted in debates about how the money was allocated, with Belgium justifying its spending on providing weaponry and aid to Ukraine. However, it has faced objections from other EU member states, contesting that the same funds were being counted as part of Belgium’s contribution to European support for Ukraine.

As part of the deal, Euroclear’s fee will be reduced to 0.3% from 1%. While this marks a significant development, integrating EU aid to Ukraine is a complex undertaking, given the varying perspectives of member states. The agreement ‘in principle’ reached by ambassadors had to navigate the sensitivities of militarily neutral countries such as Austria, Ireland, Malta, and Cyprus. The allocation anticipates 90% of the funds being earmarked for weapons and 10% for non-military assistance.

The spokesperson for the Belgian EU presidency emphasized the funds’ utilization in supporting Ukraine’s recovery and military defense against Russian aggression. Commission President Ursula von der Leyen expressed optimism, asserting that utilizing the funds to bolster Ukraine’s security will resonate as a powerful symbol.

Trade Commissioner Valdis Dombrovskis announced a planned allocation of €1 billion for aid to Ukraine in the coming months, affirming that Russia will be held accountable for its actions. It is important to note, however, that the deal solely pertains to the revenue generated by frozen assets, estimated to exceed €200 billion.

The legality of seizing these assets and their generated revenue within the framework of international law remains a pressing concern for European banks, particularly in upholding their standing as a secure haven for depositing finances. The Kremlin has voiced its opposition to the seizure of the interest accrued on frozen Russian assets, viewing it as a threat to the established legal foundations of European law and international law.

Overall, the prospective utilization of the revenue from frozen Russian assets represents a pivotal step in supporting Ukraine’s aspirations for recovery, defending itself against aggression, and fostering a safer environment for all of Europe. The complex negotiations and diverse perspectives involved reflect the intricate nature of international relations and the adherence to legal frameworks in handling such sensitive matters.

The post “European Union Sanctions to Aid Ukraine: Releasing Frozen Russian Assets” first appeared on the London News Express.