EU official agrees proceeds from frozen Russian wealth should go to Ukraine

European Commission Vice President Valdis Dombrovskis called for ‘proceeds’ from Russia’s sovereign frozen assets to be directed for the reconstruction of Ukraine, a day after US Treasury Secretary Janet Yellen said in Luxembourg that Washington wants billions from Moscow’s immobilized wealth to go to Kyiv.

‘There should be no doubt that Russia must be held fully accountable for its unprovoked and unjustified war of aggression against Ukraine,’ Dombrovskis said at a meeting of the European Union’s Economic and Financial Affairs Council (‘ECOFIN’) in Luxembourg, 17 October.

‘In that regard, we fully support G7 leaders that Russia’s sovereign assets should remain immobilised until it pays for the damage that it has caused in Ukraine,’ he said. ‘Meanwhile, where possible, the proceeds from those sovereign assets should be used to finance the reconstruction of Ukraine now. The Commission continues to drive forward work on this matter,’ he said.

Last week Belgium, where most frozen Russian central bank assets are held, announced it expects to collect 2.3 billion euros in taxes on those assets and use them to help reconstruct Ukraine.

Yellen told a meeting of Eurogroup finance ministers in Luxembourg on 16 October that she supports ‘harnessing windfall proceeds from Russian sovereign assets immobilized in particular clearinghouses and using the funds to support Ukraine, which the G7 has now committed to exploring.’

The US-led Russian Elites, Proxies, and Oligarchs (‘REPO’) Task Force, which includes the EU, G7 and Australia, says it has blocked or frozen more than $58 billion worth of sanctioned Russians’ assets in financial accounts and economic resources.