EU explores path to legally invest more than EUR 33 billion of frozen Russian Central Bank’s assets to rebuild Ukraine

Bloomberg reported the information, citing its own sources.

The EU's legal service told diplomats that such a plan is legally feasible if the assets are not expropriated and certain conditions are met. These include a cut-off date, a focus on liquid assets, and clarity that principal and interest will be returned to Russia at some point.

The EU has been studying options for the use of frozen Russian assets after the invasion of Ukraine. The outlet notes that this proposal is controversial and discussions are ongoing.

EU officials and some member states have been concerned about the legal justification for such a move and the precedent it could set.

European Commission President Ursula von der Leyen said she wanted to make Russia pay for the destruction caused by its invasion with "frozen oligarchs' money and the assets of its central bank."

G7 and EU officials said there appears to be no clear legal basis for simply seizing Russian bank assets and redirecting them to Ukraine.

Instead, as a first step, the EU is considering the possibility of pooling assets at the EU level or internationally to generate profits that could be used to finance Ukraine's reconstruction. The World Bank estimates that rebuilding Ukraine could cost at least USD 350 billion.

Sources said that while some EU lawyers see a way forward, the EU executive is more cautious about the legal feasibility of using frozen assets, as well as the overall complexity of the effort.

Officials also believe that any plan should be implemented in cooperation with the G7.

The EU executive has warned that it will be difficult to make a decision until there is more clarity on the scope of assets that can be used, and the first step would be to identify them.

Some estimates suggest that the Russian Central Bank's assets frozen abroad amount to USD 300 billion. The EU has estimated that approximately EUR 33.8 billion of these are on deposit in the EU, although this figure is still being estimated.