Kiev reveals plans for Russia’s money
Ukraine will spend the profits it receives from frozen Russian central bank funds held within the EU on strengthening its defense capabilities and supporting manufacturers, Defense Minister Rustem Umerov revealed on Facebook on Wednesday. The bulk of the money will go toward purchasing ammunition and air defense systems, he wrote.
The EU and US illegally froze an estimated $300 billion in Russian sovereign assets at the outset of the Ukraine conflict in early 2022. While the EU has so far resisted demands from Kiev and Washington to seize the funds outright, it has agreed to expropriate the interest and proceeds they generate and hand the money over to Ukraine.
Under an EU Council’s decision in May, 90% of the revenues generated by the immobilized tranches are to be transferred to the European Peace Fund, the bloc’s mechanism for reimbursing member states for money spent on arms supplies to Kiev, and then on to the newly created Ukraine Assistance Fund. The remaining 10% will be directed to the EU budget for support programs for Kiev and the bloc’s own defense industry.
According to Umerov, Kiev expects to receive around €2.5-3.0 billion ($2.7-3.3 billion) annually. He claimed the first tranche of approximately €1.4-1.5 billion will become available for use at the beginning of August. The minister noted that he expects the goods and equipment financed by these funds to be delivered to Ukraine by the end of the year.
Russia has repeatedly criticized Western military assistance to Ukraine, which it says only prolongs the conflict. Moscow has also staunchly condemned the West for freezing its assets and warned against tapping them, which it sees as outright “theft.”
Kremlin spokesman Dmitry Peskov earlier this year warned that the confiscation of Russia’s assets would create a dangerous precedent and become a “solid nail in the coffin” of the Western economic system. He also noted that Russia would inevitably launch legal proceedings against entities that tap its sovereign funds.
Former Russian President Dmitry Medvedev, who currently serves as deputy chair of the Russian Security Council, last month went as far as to warn that the West’s targeting of Russian assets could be considered “an act of aggression” and grounds for declaring war.
