The EU has decided not to transfer the first 5 billion euros in profits from frozen Russian assets to Ukraine – Politico

The EU has decided not to transfer to Ukraine the 5 billion euros of profit obtained from frozen Russian assets in the first two years of the war. The money is planned to be kept in the Euroclear investment fund, where most of the Russian assets are stored, as a “buffer” to pay for current and potential lawsuits from Russia and other countries.

This was reported by Politico.

When the European Commission in March proposed to use 90% of the revenues from frozen Russian assets to purchase weapons for Kyiv, it stipulated that it referred only to the profit obtained after February 15, 2024. The profit obtained before this date will remain in Euroclear.

The financial institution may also indefinitely retain 3% of the revenue “to ensure the efficiency of its operations.” Additionally, another 10% of the profit after February 2024 will be held for additional security.

Ukraine insists on receiving these funds, arguing that this amount is equivalent to a year of the IMF program.

“I have never heard that 5 billion euros is a buffer for Euroclear. This is too much money to be a buffer,” said Justice Minister Denis Malyuska.

Ukrainian officials also note that Euroclear incurred losses from the war of a much smaller amount – about 34 million euros. This figure was mentioned by the management of the investment fund.

However, lawyers say that retroactive withdrawal of profit would be a legal minefield when the rule is applied retrospectively, which explains the EC’s decision. Malyuska also acknowledges this.