EU mulls profiting from billions of illegally frozen Russian funds
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According to reports, European Union officials are planning to skim off revenues from more than €200 billion ($215 billion) in unlawfully frozen Russian Central Bank assets.
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European Commission President Ursula von der Leyen applauds during a ceremony marking the 70th anniversary of the European Parliament on November 22, 2022 in France. (AP)
In November 2022, EU chief Ursula von der Leyen suggested establishing a "structure" in order to manage Russian frozen assets and use them to fund Ukraine.
In May, citing data from the European Commission (EC), the total value of Russian private assets frozen in the European Union due to sanctions reached 24.1 billion euros ($25.9 billion), according to the German newspaper Welt am Sonntag.
The frozen assets' revenues increased from 18.9 billion euros in December to 24.1 billion euros in May, the newspaper reported, adding that approximately 1,473 individuals and 205 companies from Russia are now sanctioned by the EU.
The EU possibility mirrors what the US Justice Department has been considering, as it seeks congressional approval to utilize frozen Russian assets in support of Ukraine.
In July, the G7 group declared that Russian assets would remain frozen until Moscow compensates Ukraine for the alleged "damage" caused during the conflict.
Nearly half of Russian foreign reserves sanctions
Since the start of the war in Ukraine in February 2022, nearly half of Russia's foreign currency reserves have been sanctioned, amounting to about $300 billion, as part of the West's draconian sanctions campaign against the country.
Moscow has consistently argued that the efforts to seize frozen Russian assets constitute an expropriation of property in violation of international law.
The European Commission is preparing for a meeting on the matter with officials from France, Germany, Spain, Belgium, and Italy on September 21, and will then debate the idea with all member states, according to sources.
The commission's working group has apparently pushed for a step-by-step implementation of the three principal suggestions contained in the draft report.
According to the study, these phases are clarifying duties and financial commitments, putting in place regulations for central securities depositories to segregate Russian assets' cash balances, and transferring revenues to the EU's budget as "external assigned revenues."
A long and costly legal matter
The projected windfall earnings from Russian Central Bank assets blocked in the EU amount to roughly €3 billion ($3.202 billion). It was previously stated that cash and deposits account for more than half of the assets. According to the study, a "substantial amount" of the remaining funds are in securities.
While numerous Western countries have recommended collecting Russian assets in international banks that were blocked as a punitive action at the outset of the war and using them to fund Ukraine's reconstruction effort, experts told Sputnik that the legitimacy of such a move is uncertain. This would "induce an extremely long and costly legal procedure."
The G7 allegedly explored methods to transfer Russian assets seized overseas to Ukraine during a ministerial meeting in the spring, with a person involved with the discussions stating that "legal complexities" and "domestic restrictions" were making the transfer difficult.
