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EU approves first step to use Russia’s frozen assets in Ukraine’s favour

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On February 12, the Council of the European Union adopted a decision that brings closer the establishment of a mechanism for the use of excess profits from frozen Russian assets in the EU in favour of Ukraine.

Source: European Pravda

Details: Following the decision of the Permanent Representatives of the EU at the end of January, the Council of the European Union adopted rules determining the legal status of excess profits from immobilised assets of the Russian Federation on the territory of the association, as well as requiring them to be stored in separate accounts.

Quote: “The Council decided in particular that CSDs [Central Securities Depositaries – ed.] holding more than €1 million of CBR’s  [Russian Central Bank – ed.] assets must account extraordinary cash balances accumulating due to EU restrictive measures separately and must also keep corresponding revenues separate. In addition, CSDs shall be prohibited from disposing of the ensuing net profits,” the Council said.

The Council of the European Union clarifies that depositories cannot dispose of the profits from Russian assets. However, at the depositary’s request, the supervisory authorities in each country may make individual decisions about “disposing of the ensuing net profits.”

“This decision paves the way for the Council to decide on a possible establishment of a financial contribution to the EU budget raised on these net profits to support Ukraine and its recovery and reconstruction at a later stage,” the decision states.

According to official data, sanctions against Russia imposed by the EU, Australia, and the Group of Seven countries have immobilized approximately €260 billion of the Central Bank of the Russian Federation’s assets, with the EU accounting for more than two-thirds of the total.

Last month, EU foreign minister Josep Borrell said that a political agreement was reached between the EU member states regarding the use of proceeds from frozen Russian assets.

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