BRUSSELS, July 26. /TASS/. The EU has expropriated and transferred a €1.5 bln tranche for Ukraine to the European Commission (EC) using proceeds from the reinvestment of frozen Russian assets, the European Commission said. The next tranche is expected in March 2025.
"Today we transfer €1.5 billion in proceeds from immobilized Russian assets to the defense and reconstruction of Ukraine," EC President Ursula von der Leyen wrote on her page on X social media.
Concurrently, the EC published a document explaining how the funds transfer would work. According to the document, the funds will not go directly to Kiev. Instead they will be channeled to the EC, to the European Peace Facility, to compensate EU countries for weapons.
"The money will now be channeled through the European Peace Facility and to the Ukraine Facility to support Ukraine's military capabilities as well as to support the country's reconstruction," the European Commission said.
"90% of the financial contribution from the extraordinary revenues will go to the European Peace Facility (EPF) and 10% will go to the Ukraine Facility to support Ukraine's military and reconstruction needs, respectively," according to the EC’s explanations.
The European Peace Facility is used to compensate EU countries for supplies of weapons to Kiev (on average at the level of payment of 40% of the cost of weapons and ammunition delivered), while funds from the Ukraine Facility are used to pay for supplies of electric generators, for example. The EC oversees both funds.
The European Commission also said that so far proceeds have only been collected from assets blocked at Euroclear Belgium. Consequently, in reality the funds have simply been transferred from accounts in Euroclear to the EC.
The European Commission’s actions to expropriate sovereign assets are unprecedented. They are based on the decree passed by the EC in January 2024, saying that revenues from reinvestment of frozen Russian assets are allegedly not owned by Russia. Most experts both in Russia and globally consider this reasoning legally flawed. It is akin to saying that dividends from a bank deposit are not owned by the owner of this deposit.