In July, the European Union advanced a plan aimed at redirecting the proceeds from frozen Russian assets held abroad to support Ukraine. The initiative, reported by Bloomberg with access to the underlying document, signals a concerted effort by the bloc to repurpose frozen capital for urgent defense and reconstruction needs in Kyiv. The core idea is to channel windfall profits from these frozen reserves into a dedicated funding stream, creating a visible bridge between sanctions enforcement and tangible assistance for Ukraine.
Under the proposals, which require unanimous agreement among all member states, a tax on windfall gains from the frozen assets would generate roughly €3 billion. These funds would be deployed to finance arms supplies to Ukraine and to stimulate growth within the country’s defense sector, reinforcing Kyiv’s security posture while supporting domestic industrial activity that sustains military readiness.
Starting February 15, the plan envisions transferring a portion of the revenue to two established EU funds. Half of the funds would flow to the Ukrainian Facilities Support Fund, with the other half directed to the European Peace Fund. The arrangement would continue in semiannual installments until sanctions on Russia are fully lifted, ensuring a steady stream of resources for Ukraine over the medium term.
Earlier, the head of EU diplomacy noted that foreign ministers across the bloc backed the concept, indicating broad political support for using revenues from frozen Russian assets to benefit Ukraine. The mechanism would distribute revenues in stages, aligning financial support with evolving security needs and international policy objectives for the region.
On March 15, a statement from the German chancellor reiterated the position that revenues generated by the Central Bank of Russia’s assets frozen in Europe could be allocated to procure weapons for Ukraine. This stance emphasizes a pragmatic use of frozen capital to strengthen Kyiv’s defense capabilities in the face of ongoing aggression.
A former Ukrainian Prime Minister commented on the disposition of seized Russian assets, underscoring the expectation that these funds will serve Ukraine’s strategic and humanitarian priorities. The dialogue surrounding asset recovery and redirection continues to shape the EU’s broader approach to sanctions and defense cooperation.