Despite the Kremlin’s threats and warnings European Union protects Immobilized nearly 200 billion euros of assets of the Central Bank of RussiaIt is held in one of the largest depositories, Euroclear, as a result of restrictive measures imposed on Moscow due to its war in Ukraine. This week the Twenty-Seven took the first step to force central securities depositories to separately account for extraordinary profits in order to use those profits for financing. Reconstruction of Ukraine.
One of the first measures implemented by the EU as soon as the occupation took place on February 24, 2022, was the ban on transactions related to the management of reserves and assets. Central Bank of Russia. As a result, billions of dollars were “withheld”. Estimates point to a figure close to 200 billion, but if assets held by other G7 countries, such as the EU, which have been discussing for months how to use this money to help Kiev, it will be closer to 300 billion. the monumental task of rebuilding the country.
Brussels presented a proposal in December. The decision adopted by the EU in line with the position it maintains G7It will ban organizations such as Euroclear from using profits from frozen assets and set clear rules on how they must act in the future. For example, Central securities depositories with assets of more than €1 million Russian presence separate account Extraordinary cash balances accumulated as a result of restrictive measures. They will also have to keep the relevant income separate and will not be able to convert the resulting net profit into cash.
second scene
This is the first step that will pave the way for the Twenty-Seven to decide whether to contribute financially to the European budget in the future through the new facility for Ukraine – for which $50 billion was donated and adopted on February 6. in order to finance to get better And reconstruction from the country. In addition, and taking into account the risks and costs involved in holding the assets and reserves of the Bank of Russia, each central securities depository may request its supervisory authority to allow the release of part of these net profits in order to meet the requirements of legal matters. It’s about capital and risk management.
“I welcome the decision of the Council” but “we encourage the adoption of new measures that allow their practical use in the interests of Ukraine. These measures must be ambitious and rapid. Ukraine is ready to continue working with its partners to achieve its ultimate goal: Ukrainian Foreign Minister emphasized on Monday : Dmytro Kuleba.
Attention
The debate on the use of frozen assets has been on the table of European leaders for months, but there were concerns about the impact this measure would have on the United States. financial stability Old Continent and confidence in the euro It led Brussels to act with an extremely careful and measured plan. In fact, what Twenty-Seven did for now was pass a law requiring Euroclear to do the following. managing and accounting for profits separately Preventing the distribution of funds produced by immobilized Russian assets in the form of dividends to shareholders and third parties. In order for this money to be used, a new proposal that has not yet been submitted will be required.
The progression of Twenty Seven is as follows: new sanctions package The thirteenth against Russia, with the intention of ratifying it on the second anniversary of the invasion. The idea is to not only add new names to the list of people affected by restrictive measures, but also to penalize the following companies: Chinese and other such countries Serbia anyone Türkiye Helping the Kremlin avoid international sanctions on dual-use products.