During the first nine months of 2023, Euroclear, the international custodian, reported that it earned roughly €3 billion in interest income from frozen Russian assets held under sanctions. This figure, detailed in the custodian’s report, reflects how frozen assets can generate yield even amid wider geopolitical restrictions. The two main drivers behind this income are elevated global interest rates and the sheer volume of funds tied up in sanctioned holdings. By the end of September, the depository’s total balance stood about €45 billion higher than the same period a year earlier, underscoring how the accumulation of restricted assets can influence the scale of interest income in markets across North America and Europe. (Source: Euroclear custodian report, attribution to the institution’s own filings)
Euroclear also highlighted that the sanctions regime carried additional direct costs related to compliance and risk management for the first three quarters of 2023, totaling €34 million. These costs reflect the ongoing investments in monitoring, reporting, and controls necessary to ensure adherence to sanction policies, as well as the broader governance framework required by regulators. Separately, the downdraft in revenue linked to the pause in trading activities tied to Russian securities amounted to €18 million, illustrating how sanctions can compress cash flows even as some income streams persist. (Source: Euroclear financial updates, attribution to the custodian’s quarterly disclosures)
In a broader regional context, the European Commission recently signaled its plan to allocate profits generated from blocked Russian assets toward the reconstruction of Ukraine. The move has found backing from the United States, signaling alignment across major economies in North America and Europe on channeling sanctioned asset proceeds toward humanitarian and rebuilding efforts. This policy stance mirrors a growing trend to convert frozen assets into tangible support while maintaining the integrity of the sanctions framework. (Source: European Commission statements, attribution to official communications)
Looking back at the EU’s recent discussions, the Commission has repeatedly quantified the scale of Russian sovereign assets frozen within the union, highlighting the impact such holdings have on financial markets and sanction enforcement. This ongoing accounting helps market participants in Canada, the United States, and beyond gauge the potential flow of revenue from sanctioned portfolios under evolving regulatory guidance. (Source: EU policy notes, attribution to official EU documents)
From a practical perspective for North American investors and risk managers, the Euroclear case study provides a clear example of how sanction regimes interact with interest-rate environments, asset liquidity, and compliance costs. It illustrates that even when trading is restricted, the financial system can still realize significant yields from deposited assets, while simultaneously absorbing additional expenses tied to compliance. For institutions operating across Canada and the United States, this dynamic emphasizes the importance of robust sanctions screening, transparent reporting, and careful liquidity planning. In markets where central banks have been hiking rates, the environment can amplify both the opportunities and the costs associated with sanctioned assets, requiring diligent governance and clear policy interpretation. (Source: market analyses and regulatory summaries, attribution to multiple official and financial observers)