The European Union has made its first transfer of €1.5 billion generated from immobilized Russian assets to support Ukraine, as announced in a press release from the European Commission on 26 July. The move comes as a result of EU sanctions against Russia in response to its ongoing war of aggression against Ukraine.

The funds, which were made available by the Belgium-based financial services company Euroclear to the Commission on 23 July, will be channeled through the European Peace Facility and the Ukraine Facility. These mechanisms will direct the money towards supporting Ukraine’s military capabilities and the country’s reconstruction efforts.

European Commission President Ursula von der Leyen stated,

“The EU stands with Ukraine. Today, we transfer €1.5 billion in proceeds from immobilized Russian assets to the defense and reconstruction of Ukraine. There is no better symbol or use for the Kremlin’s money than to make Ukraine and all of Europe a safer place to live.”

High Representative Josep Borrell highlighted that €1.4 billion of this first tranche will be allocated to the European Peace Facility. This funding will finance the acquisition of priority military equipment, including air defense systems and artillery ammunition, as well as support procurement for the Ukrainian defense industry.

The transfer is a result of several packages of sanctions adopted by the EU and its member states against Russia. These sanctions led to the immobilization of assets belonging to the Central Bank of Russia held in the EU. The revenues generated from these immobilized assets are held by central securities depositories (CSDs) and do not belong to Russia.

In February 2024, following proposals by the Commission and the High Representative, the Council decided that CSDs holding more than €1 million worth of immobilized Russian assets must set aside the resulting extraordinary cash balances. Subsequently, on 21 May, the Council adopted legal acts enabling the use of these net profits for the benefit of Ukraine.

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