EU decides how to increase profits from frozen Russian assets but avoid accusations of money laundering

The European Union is developing a plan for using frozen Russian assets that will allow it to increase aid to Ukraine in the war while avoiding accusations of Moscow misappropriating funds.

This is reported by Politico.

According to sources, Brussels is considering transferring about €200 billion in Russian assets frozen in Belgium to a new “special fund” with a higher interest rate. The goal is to generate more profit to support the Ukrainian economy. The sources did not specify what investment instruments they would use.

There is no talk of a complete confiscation of Russian assets, as some bloc countries, such as Germany and Italy, are opposed. To avoid accusations of violating international law, Brussels wants to spend only the profits, without touching the assets themselves.

The G7 countries previously agreed to transfer €45 billion in profits from the investment of frozen Russian assets to Ukraine. The EUʼs share of this is €18 billion, which will be paid in full by the end of the year. "The question arises: how to finance Ukraine after 2026?" writes Politico.

Finance ministers from the blocʼs 27 countries will discuss the issue at an informal dinner in Luxembourg on June 19. Poland, which holds the EU presidency, has also proposed that the EUʼs new SAFE defense mechanism allow partners to buy weapons for Ukraine.

Supporters of the new fund see it as a long-term way to support Kyiv as negotiations stall and the US President Donald Trump threatens to withhold funding. Another potential benefit is reducing the risk that Hungary will use its veto to lift sanctions and return assets to Moscow.

Frozen Russian assets

The value of frozen Russian sovereign assets in the EU is almost €211 billion. In total, the European Union, the G7 countries and Australia have frozen approximately €260 billion in securities and cash.

In October 2024, the EU Council finally approved a loan of up to €35 billion to Ukraine. This money is the blocʼs contribution to the G7 initiative to provide Ukraine with a $50 billion (€45 billion) loan, which will be repaid with the proceeds from frozen Russian assets.

A few days after the EU Council decision, the G7 countries agreed to a $50 billion loan for Ukraine using proceeds from Russiaʼs frozen assets. The US contribution was $20 billion.

The money will be transferred “through various channels” — both to replenish the Ukrainian budget, and for military assistance and the restoration of Ukraine’s infrastructure. Reuters notes that Ukraine will receive all the funds under the loan by the end of 2027.

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