The European Commission is preparing a proposal to EU member states on how to further dispose of the assets of the Russian Central Bank that are frozen in the Group of Seven countries. They total more than $280 billion. Radio Liberty has reviewed the draft document, which outlines further possible steps, UNN reports.
For further certainty and predictability regarding the funds that Ukraine can receive, it is suggested that several options be considered.
The first is to freeze the Central Bank's assets for an indefinite period. This step is now part of the sanctions against Russia imposed for its full-scale invasion of Ukraine. They are extended every six months by consensus among all EU member states.
In the case of an indefinite freeze of Russian funds, the document states, the EU Council may, however, review the decision at "regular intervals" (e.g., after 12 months) based on "clear predefined criteria." These criteria include the end of the war, Russia's compensation for damages, etc.
"This open approach will provide G7 partners with the highest degree of predictability. The termination of the freeze on the assets of the Central Bank of Russia will require a new Council (EU - ed.) act based on a report by the EU High Representative for Foreign Affairs/European Commission, which will assess whether the criteria for the freeze have been met," the document says.
Another option is to further freeze assets "for consecutive periods". The principle is the same as the current one - currently, sanctions against Russia are extended every six months. The difference is in the length of the periods: the proposal lists 18, 24, and 36 months as options.
"This is in line with the current 'prolongation' system, but with longer extensions to give more predictability to long-term loans to Ukraine. Each extension would require a new act of the EU Council," the document says.
The proposals also state that "different timeframes for CBR assets and other sanctions can be protected.
"The former (the assets of the Central Bank - ed.) are the main financial assets of the aggressor state, which shows no signs of ending its illegal war, and which, according to international law, is obliged to pay reparations," the document says.
The publication adds that the European Commission will present the developed legislative proposal at the end of August. The ambassadors of the EU member states will discuss it in early September. It remains to be seen whether Hungary, which did not block the extension of anti-Russian sanctions but opposed the change in the six-month approach, will support the plan.
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In June, G7 leaders agreed to use proceeds from about $300 billion worth of Russian assets frozen after Moscow's invasion of Ukraine in 2022 to support a $50 billion loan to help Ukraine and give it confidence in external financing after this year.
The plan does not include asset confiscation to avoid a precedent that the European Union believes could destabilize the global financial system. But the details of the loan have proven more difficult to achieve than originally envisioned.
According to a representative of the Ministry of Finance, the United States wants guarantees that the assets will remain frozen for a long period of time, at least until a peace treaty is signed that will end the war, preserve Ukraine's sovereignty, and provide for compensation by Russia for the damage caused to Ukraine by the war.