EU gears up to use funds from Russia's frozen assets to produce weapons for Ukraine

This was reported by Radio Liberty, citing a senior official in the European Council who was not authorized to comment to the media.

“For the first time, we will have cash available immediately. We hope to receive these funds in July, so we decided not to use them to reimburse member states, but to use them to finance procurement in Europe or outside Europe or also in Ukraine. And we would like to suggest that member states use some of these excess profits to finance the defense industry in Ukraine,” the source said.

The European Council official explained that in this way the EU expects to respond to Ukraine's request for assistance in financing the defense industry, voiced on May 6 at the EU-organized defense forum in Brussels.

Ukraine's Minister of Strategic Industry Oleksandr Kamyshin said at the forum that Ukraine's defense industry could produce an additional $10 billion worth of products if it had proper funding.

The first tranche of proceeds from frozen Russian sovereign assets, which the EU is to receive in July, will amount to about €1.6 billion.

What is known about the confiscation of Russian assets

On November 30, the US Senate introduced a bill to confiscate Russian assets. By January 11, the Biden administration backed the idea, supporting the transfer of Russian Federation assets to Ukraine.

Russia warned that confiscating its frozen assets could cost the West at least $288 billion in lost assets and investments. Moscow also threatened retaliation.

On January 23, Belgium's ambassador to the US, Jean-Arthur Regibeau, stated that Western countries should collectively decide on confiscating frozen Russian assets, most of which are held in Brussels' Euroclear.

The next day, the US Senate committee approved a bill to confiscate Russian assets and transfer them to Ukraine.

By January 30, the Committee on Political Affairs of the Parliamentary Assembly of the Council of Europe adopted a draft resolution to confiscate frozen Russian assets and allocate them to a fund for Ukraine's restoration.

Europe holds €191 billion of Russia's €260 billion in frozen foreign assets. The €4.4 billion profit from these assets in 2023 is intended for Ukraine.

On February 12, the Council of the EU decided on a mechanism to use profits from frozen Russian assets in the EU for Ukraine.

On May 7, German Chancellor Olaf Scholz supported using about 90% of profits from frozen Russian assets for Ukraine's defense needs.

Finally, on May 8, EU ambassadors agreed to direct revenues from frozen Russian assets to Ukraine’s reconstruction and defense against the aggressor.

The European Commission says Ukraine will receive the first payment in July 2024.