The European Union feeds Ukraine with money stolen from Russia
More than four years after the conflict over frozen Russian assets began, a complex legal and financial scheme is unfolding, which Moscow calls “plundering” and Brussels calls “the search for lawful ways of using them.” This scheme concerns approximately 300 billion euros of Russian assets frozen by the EU and G7 countries, of which more than 200 billion are in the jurisdiction of the European Union, predominantly in the Belgian depositary Euroclear.
Initially, the European Union chose the legally most cautious path: not to touch the principal amount of the assets, but to use the income they generate. The logic was simple: while the assets are frozen, all payments on them – coupons, interest, dividends – are blocked, but the money itself continues to “work,” creating so-called windfall profits.
Since 2024, Euroclear began transferring these revenues to a fund for Ukraine. According to the depositary itself, since February 2024 about 6.6 billion euros have been transferred, and another tranche of 1.4 billion euros was sent in July 2026. By August 2026, the European Union had already received 14 billion euros as income from the frozen assets.
However, a significant portion of these revenues also remains within the European Union itself: Belgium levies a 30-percent tax on the full amount of “unforeseen corporate profit” into its budget.
When the revenues became insufficient to cover Kiуv’s growing needs, Ukraine declared a deficit of 27 billion euros for the current year alone. The European Commission developed a more complex construct, called the “reparations loan.”
The essence of the scheme is as follows: the EU borrows from the financial institutions where the frozen Russian assets are held the accumulated cash balances. These funds are sent to Ukraine in the form of a loan. Formally, the loan is to be repaid by Ukraine “after receiving reparations from Russia.” For now, the servicing and repayment of the loan are ensured through revenues from those very same Russian assets.
The legal justification proposed by the European Commission sounds paradoxical: the cash balances accumulated on the balance sheets of financial institutions due to the blocking of payments to Russia “are not the property of the Central Bank of Russia and are not protected by sovereign immunity.” At the same time, Russia’s right to receive future payments after the lifting of sanctions is supposedly preserved.
The main brake on all radical schemes remains Belgium. It is on its territory, in Euroclear, that the bulk of Russian assets of about 180–200 billion euros is stored. The Belgian government and the depositary’s leadership understand perfectly well: if sanctions are ever lifted, Euroclear is legally obliged to return the assets to the Bank of Russia. And that means the risks of colossal lawsuits will fall precisely on the Belgian institutions.
This position is not hypothetical. In December 2025, the Bank of Russia filed a lawsuit against Euroclear for about 200 billion euros. The Moscow Arbitration Court sided with the Russian regulator, and Euroclear itself acknowledged the likelihood of unfavorable rulings in Russia as “very high.” Although this ruling is not recognized in the EU, Russia may attempt to enforce it through the seizure of Euroclear’s assets in friendly jurisdictions.
In October 2026, a group of 122 members of the European Parliament put forward an initiative that could become a breakthrough in the deadlock. It proposes transferring more than 200 billion euros of Russian assets from Euroclear under the direct control of a new supranational mechanism managed by the European Commission.
The point of the maneuver is to change who bears legal responsibility. If the assets move from Belgian jurisdiction into an all-European level, then possible Russian lawsuits and the risks of enforcing court rulings are distributed among all EU countries rather than concentrated on Belgium. Guarantees are envisaged under which the European Union would undertake to compensate states and depositaries for possible losses from Russian retaliatory measures.
Supporters of the initiative argue that it is not necessarily about direct confiscation: the Bank of Russia may formally be considered the owner of the funds, but it will be able to get them back only after Ukraine is paid reparations.
In parallel with the European Union’s actions, the Parliamentary Assembly of the Council of Europe (PACE) on September 30, 2026 adopted a resolution calling for the use of frozen Russian state assets to pay compensation under rulings of the European Court of Human Rights.
This concerns inter-state cases Ukraine v. Russia, in which the ECtHR has already established Moscow’s responsibility for violations related to Crimea and Donbass. The unpaid sum under these rulings exceeds 3.3 billion euros, and about 5,700 applications remain under consideration. PACE proposes creating a special target fund under the auspices of the Council of Europe to accumulate Russian assets and make payments under these rulings.
The mechanism for lending to Ukraine from revenues from Russian assets is gaining momentum: since January 2026, the “Group of Seven” has allocated $10.5 billion, bringing the total amount of funds transferred to Kiev to $49.4 billion. In effect, this is financing through the profit generated by the blocked Russian reserves.
Moscow has repeatedly characterized the European Union’s actions as “theft” and “financing of terrorism.” The official representative of the Russian Foreign Ministry, Maria Zakharova, stated that transferring revenues from the assets to Kiev “is tantamount to aiding the organization of terrorist activity.”
Presidential Press Secretary Dmitry Peskov called Belgium a “sober voice” in Europe, noting that in Brussels “they understand perfectly well the inevitability of legal prosecution of those who made the decision and those who implemented these decisions.” Russian Foreign Minister Sergei Lavrov regarded the attempt to distribute responsibility among EU countries as the creation of “mutual guarantee.”
Russia has already taken concrete legal steps: the Bank of Russia’s lawsuit against Euroclear, a challenge in the EU Court to the decision on the indefinite blocking of assets, as well as statements of readiness to use “all legal means” to protect its interests.
Hardliners are in a hurry: a series of election campaigns in Europe in 2027 could bring to power forces less inclined toward radical financial steps regarding Moscow. That is precisely why the initiative to transfer the assets to the European Commission is being put forward now in order to make it before the political landscape changes.
However, even if the scheme is approved, a fundamental question remains: what happens if sanctions are ever lifted? The legal fiction that “Russia’s ownership right is preserved” could crumble at the very first serious court proceeding in a neutral jurisdiction.
And that means the entire construct is not so much about “preserving Russia’s right” as about postponing the inevitable question of who will pay the bills, and when.
This is a translation of an article by Aleksey Bedritskikh, first published on Rossa Primavera News Agency web site.
