EU sends first $1.6 billion from seized Russian money to Kiev

The EU announced on Friday that it had made available the transfer of the first €1.5 billion ($1.6 billion) payout of interest earned on seized Russian assets to Kiev to help it buy weapons.

Moscow has warned Brussels against using the “stolen” funds to arm Ukraine, threatening retaliation. 

The announcement follows months of deliberations among EU and G7 nations about how to use nearly $300 billion belonging to Russia’s central bank that was immobilized as part of Ukraine-related sanctions.

Brussels has estimated that the interest on the seized assets could provide around €3 billion annually.

“Today we transfer €1.5 billion in proceeds from immobilised Russian assets to the defence and reconstruction of Ukraine,” European Commission President Ursula von der Leyen said on X (formerly Twitter). 

Commenting on the move, Kremlin spokesperson Dmitry Peskov condemned the “illegal decisions” made by EU officials, pledging “thought-through” retaliatory measures in line with Russia’s national interests. 

“Of course, these steps by the European Commission will not remain unanswered,” Peskov said on Friday. 

In May, the EU approved a scheme to use the interest earned on the frozen assets to support Ukraine’s recovery and military efforts. Under the agreement, 90% of the proceeds are expected to go into an EU-run fund for Ukrainian military aid, with the other 10% to be allocated for supporting Kiev in other ways.

In a statement published on the EU’s official website on Friday, the bloc claimed that the proceeds from the confiscated funds “do not constitute sovereign assets.”

“These revenues do not have to be made available to the Central Bank of Russia under applicable rules, even after the discontinuation of the transaction prohibition (immobilisation),” the statement said. 

In June, the EU Foreign Affairs Council announced that it would make windfall profits from immobilized Russian funds available to Ukraine. The first tranche will be used to purchase ammunition and air-defense systems, it said, adding that another €1 billion will be transferred by the end of the year.

Moscow has denounced the Western measures, saying that military assistance to Ukraine will only prolong the conflict, while any actions taken against its assets would amount to “theft.” The Kremlin has warned that “illegal attempts to rob” Russia will cause a great deal of damage to the international financial system.