What prevents the EU from confiscating and transferring Russia's frozen assets to Ukraine

In the past week, leading European Union officials have repeatedly referred to Russia’s frozen assets, and not without reason.

The EU, together with the G7 countries, remains the custodian of hundreds of billions of dollars in frozen Russian assets.

Yet, despite Russia’s ongoing aggression against Ukraine, not a single dollar from these reserves has been confiscated.

Read more about why the West is not using Russia’s frozen assets to back Ukraine in the column by Nataliia Sichevliuk of Transparency International Ukraine: Global Political Paralysis: Global political paralysis: why Russia's frozen assets have still not been confiscated.

The columnist points out that the amount of aid to Ukraine already provided from taxpayers’ pockets is soon to catch up with the value of Russian assets that those very same partners are so reluctant to confiscate.

According to her, after Russia’s invasion in February 2022, the G7 countries froze tens of billions of dollars in Russian sovereign assets

Based on rough estimates, she writes, altogether, some $264 billion in Russian sovereign assets remain frozen across G7 jurisdictions. Beyond this, the largest share of frozen Russian assets – around $227 billion (€195 billion) – is held in the Belgian securities depository and bank Euroclear.

In total, this amounts to roughly $500 billion. And even that is not the full picture.

According to Euroclear’s official data, since 2022 it has "earned" more than €14.8 billion in revenues from frozen Russian assets.

And in June last year, she recalls, the EU agreed to provide Ukraine with about €18 billion from Euroclear’s income on frozen Russian assets as part of the broader $50 billion G7–EU loan package known as Extraordinary Revenue Acceleration.

In reality, she argues, this is a step away from, rather than toward, confiscation.

"The fact is, under the proposed scheme, the bulk of Russia’s frozen $450 billion in assets would remain untouched. Instead, what is being discussed is settling Ukraine’s obligations to its creditors at the expense of the EU – more precisely, through Euroclear’s revenues," Sichevliuk points out.

Thus, she argues, with roughly $450 billion in Russian sovereign assets frozen, the G7 and the EU have, since 2022, given Ukraine around $300 billion in financial assistance from their own budgets. They have also approved a $50 billion loan secured by the future revenue from frozen Russian assets – a loan unlikely to ever be repaid by Russia itself.

One does not need to be a mathematician to see that Russia’s frozen sovereign funds could more than cover these expenditures.

The Transparency International Ukraine advisor warns that as a result, taxpayers grow weary of funding Ukraine from their own wallets, and political backing in partner countries declines with each new election – as we now see, for example, in Poland.

She emphasises that when it comes to confiscating the aggressor’s assets, there is no legal or economic trap. The obstacle is political indecision.

"Whether the world can break through this political paralysis will determine not only Ukraine’s future, but also the global credibility of the international community and its professed values of democracy, peace, and human life," stresses Natalia Sichevliuk, legal advisor at Transparency International Ukraine.