EU agrees to give Ukraine $1.6 billion in proceeds from Russia’s frozen assets

The European Union has agreed to release profits from Russia’s “immobilized assets” and to use them to prop up Kiev against Moscow, EU Commission head Ursula von der Leyen announced on Tuesday.

The bloc has agreed to a new aid package for Ukraine, which includes €1.9 billion ($2 billion) from the EU’s Ukraine facility, as well as some €1.5 billion ($1.6 billion) in windfall profits “generated from the immobilized Russian assets.”

The funds are expected to be allocated by the end of July, von der Leyen announced during the so-called Ukraine Recovery Conference in Berlin.

“Around €1.5 billion from the windfall profits will become available in July: 90% of these funds will go to defense, 10% to reconstruction. And, later this week, at the G7 Summit, we will further discuss how Ukraine can benefit even quicker from the proceeds of the immobilized Russian assets,” she said.

The official dismissed concerns about the potential implications of the move for the global financial system, insisting the bloc has done it “in line with international law, and while ensuring the stability of financial markets.”

Thus far, neither of Kiev’s Western backers has opted to seize the frozen assets themselves, with various legal concerns repeatedly voiced over the potential move. Last week, the International Monetary Fund (IMF) reiterated its position that such a decision must have a very solid legal basis.

“We have made our position clear and public, which is that what is important for us, for the IMF, is that any actions taken have sufficient legal underpinnings and that they do not undermine the functioning of the International Monetary System. And so that position is clear, and we have stated it in public on many occasions,” IMF spokeswoman Julie Kozack said during a press conference.

Moscow has repeatedly called out the collective West over freezing Russian sovereign assets, warning that any attempts to seize them will be met with a reciprocal response, with the assets, property, and businesses of Western companies in Russia set to take the fall for the actions of their governments.