Brussels: Europe and the Arabs

The European Union institutions in Brussels announced in a statement issued Wednesday that on August 3, the EU received €1.4 billion in windfall profits from interest accrued on the cash balances of frozen Russian Central Bank assets held in central securities depositories. This is the fifth such payment, following the fourth payment in March 2026. This amount covers the accrued revenue for the first half of 2026. Since the freezing of these Russian assets, the total windfall profits have reached €8 billion.

European Commission President Ursula von der Leyen stated, "Russia must pay for the destruction it has inflicted on the country. We are using the proceeds from frozen Russian assets to ensure this. We are also making an additional €1.4 billion of these funds available to Ukraine to support its ongoing resistance against Russia's illegal war."

These funds come from Russian Central Bank assets frozen under EU sanctions imposed in response to Russian aggression against Ukraine. While the assets themselves remain frozen, the interest accrued on the cash balances does not accrue to Russia. Based on a proposal from the Commission and the High Representative, the Council decided to use these net profits to support Ukraine. This action is part of the EU's ongoing commitment to supporting Ukraine for as long as possible.

Ninety-five percent of the proceeds will be used to support Ukraine through the Loans to Ukraine Cooperation Instrument (ULCM), and 5% through the European Peace Facility (EPF). The ULCM provides non-repayable support to help Ukraine repay the EU Macro-Financial Assistance loan disbursed over the course of 2025, as well as loans from G7 bilateral lenders under the Extraordinary Revenue Acceleration Loans (ERA) initiative. The total support provided under the ERA amounts to €45 billion. The EPF, on the other hand, helps Ukraine meet its urgent military and defense needs.

The statement also noted that in response to Russia's brutal and unjustified invasion of Ukraine, the EU and its Member States have adopted several packages of restrictive measures (sanctions) against Russia. As part of these sanctions, the assets of the Central Bank of Russia held in the European Union were frozen. The ban on transactions involving the assets and reserves of the Central Bank of Russia and its affiliated entities led to the accumulation of cash and deposits in the balance sheets of Central Securities Depositories (CSDs) from outstanding financial instruments, resulting in exceptional income.

Based on proposals from the Commission and the High Representative, the Council decided in February 2024 that CSDs holding more than €1 million of assets and reserves of the Central Bank of Russia, frozen as a result of EU sanctions, are obliged to allocate the exceptional cash balances accumulated due to those sanctions and may not dispose of the net income generated from those assets.

Based on further proposals from the Commission and the High Representative in March, the Council adopted on 21 May 2024 a set of regulations authorizing the use of these net profits for the benefit of Ukraine. In December 2025, the Council decided to prohibit the transfer of assets of the Fixed Assets Reinvestment Programme to Russia in a more sustainable manner, based on Regulation 2025/2600, which is based on Article 122 of the Treaty on the Functioning of the European Union.