Why Ukraine’s allies are divided over using $300 billion in Russian assets

Subscribe to enjoy similar stories. Days after Russia began its full-scale invasion of Ukraine, Kyiv’s allies united to deploy a weapon against the Kremlin: freezing Russia’s overseas assets. The question of what to do with the $300 billion in frozen funds has divided European countries ever since.

But now that the U.S. is threatening to withdraw support for Ukraine, pressure is mounting on European countries to formally seize the funds and use them to help Kyiv. There has never been a full, official exposition of where the money is.

However, there are around 190 billion euros, equivalent to $205 billion, in Belgium’s Euroclear, one of the European Union’s biggest clearinghouses, where Russia parked the money ahead of the war. Between $5 billion and $8 billion are believed to be in the U.S. The rest is divided among the U.K., Canada and European financial centers such as Frankfurt and Paris.

In May 2023, the Group of Seven countries said the frozen assets—around half the foreign assets Russia’s central bank held on the eve of the war—would be retained until Russia pays for the damage it caused in Ukraine. The money frozen in 2022 has remained inaccessible to Russia. Bonds and other assets that have matured have been kept as immobilized funds.

The G-7 enacted a plan in December to make a $50 billion loan from the profits—mainly interest payments—generated by the Russian assets. They argued the profits didn’t belong to the Russian government but were the property of the institutions holding them. The loan was backed by the profits the G-7 expects the assets to generate over the next decade.