On February 12, the Council of the European Union adopted a decision that paves the way for the creation of a mechanism for the use of profits from the frozen assets of the russian federation for Ukraine.
This is reported on the website of the Council of the EU.
"Today [February 12], the Council of the EU adopted a decision and regulation clarifying the obligations of central securities depositories (CSDs), which own assets and reserves of the Central Bank of russia (CB of the russian federation), frozen as a result of EU restrictive measures," the message reads.
It is indicated that after russia launched its illegal and unjustified full-scale invasion of Ukraine in February 2022, the EU, in coordination with international partners, decided to prohibit any operations related to the management of reserves and assets of the Central Bank of the russian federation. As a result of this ban, the relevant assets located in financial institutions of the EU member states are "immobilized".
This decision, in accordance with the position of the G7, clarifies the ban on these transactions, as well as the legal status of the income received by central depositories in connection with the ownership of russian immobilized assets, and establishes clear rules for the entities that own them. In particular, the Council decided that central depositories that own assets of the Central Bank of the russian federation in the amount of more than EUR 1 million must separately account for extraordinary cash balances accumulated as a result of EU restrictive measures, as well as separately store the relevant income. In addition, central depositories are prohibited from disposing of the received net profit.
Given the risks and costs associated with holding the assets and reserves of the Central Bank of russia, each central depository may apply to its supervisory authority to allow the release of a portion of this net profit subject to compliance with the requirements for authorized capital and risk management.
This decision paves the way for the Council to adopt a decision on the possible creation of a financial contribution to the EU budget from these net profits to support Ukraine and its recovery and reconstruction at a later stage. This financial contribution can be directed through the EU budget to the Fund for Ukraine, on which the Council and the European Parliament reached a preliminary agreement on February 6, 2024.
It is recalled that in their statement dated December 6, 2023, the G7 leaders confirmed that significant progress is needed to direct the extraordinary incomes that are in private companies and are directly related to the immobilized sovereign assets of russia to support Ukraine.
In its conclusions of December 14-15, 2023, the European Council confirmed its strong condemnation of russia's aggressive war against Ukraine, which is a clear violation of the UN Charter, and confirmed the European Union's unwavering support for the independence, sovereignty and territorial integrity of Ukraine within its internationally recognized borders and its inalienable right to self-defense.
The European Council also reiterated its call for strong progress in coordination with partners on how extraordinary private incomes directly derived from frozen russian assets can be channeled to support Ukraine and its recovery and reconstruction, in accordance with applicable treaty obligations. as well as in accordance with EU law and international law.
About EUR 260 billion of russian Central Bank assets were frozen in securities and cash in G7 jurisdictions, the EU and Australia, with more than two-thirds of them immobilized in the EU.
As Ukrainian News Agency earlier reported, on January 6, President Volodymyr Zelenskyy called on international partners to speed up the creation of a legal framework that would allow the confiscation of frozen assets of the Central Bank of the russian federation to help Ukraine.
We will remind, on January 11, the Bloomberg agency reported that the administration of US President Joe Biden supports the bill on the confiscation of frozen assets of the russian federation for their further transfer to Ukraine.
Also, Bloomberg, citing sources, informed that the authorities of the terrorist country of the russian federation began preparations for the confiscation by the West of the reserves of the Central Bank, which were frozen by sanctions after the start of a full-scale war in Ukraine.
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