The Financial Times reported on Monday, citing sources familiar with the matter, that Germany has refused EU plans to use the frozen assets of the Bank of Russia to rebuild Ukraine and called for examining other options.

The reason is that some members of the German Parliament believe such a move would entail serious legal and financial complications, the report says, noting that the plan would fail to amass enough support as the legal stakes were "too high." 

Despite the German authorities attempting to locate and freeze the assets of sanctioned Russian citizens and entities, EU plans to use the funds for the reconstruction of Ukraine have raised "complex financial and legal questions."

According to the report, the EU seeks to raise as much as 3 billion euros ($3.3 billion) per year from the holdings of Russian central bank assets.

Read more: US bipartisan bill to seize Russian assets, hand them to Kiev launched

Related News

After $6.3bln accounting 'error', US announces $1.3bln aid to Kiev

Kiev is also in the process of developing an alternative mechanism to use the seized assets as collateral.

This means EU countries would be able to access the funds and take loans to invest in return and allocate the money to Ukraine. 

"The challenge is to try to work out what is legally sound and defensible. It's more complex than anybody thought at the outset," an EU diplomat familiar with the matter was quoted as saying by the newspaper.  

A meeting of the bloc's foreign ministers is scheduled on Monday to discuss the matter in-depth, the report says. 

As of today, EU banks hold about 24.1 billion euros of assets belonging to Russian individuals and private entities.

An additional 200 billion euros of assets from Russia's Central Bank are currently seized by EU states. 

Read more: Euro's global position could fall if EU sends Russia assets to Ukraine