EU considers new options to secure sanctions on frozen Russian assets

This content was published on September 13, 2024 - 16:52

2 minutes

By Julia Payne and Jan Strupczewski

BRUSSELS (Reuters) -The European Commission has presented EU ambassadors with three new possible ways to renew sanctions on Russia’s central bank assets for longer periods, a change that is crucial to securing a $50 billion G7 loan for Ukraine, EU diplomats said on Friday.

Leaders of the Group of Seven major democracies and the EU agreed in June to use the interest on frozen Russian assets to underpin the G7 loan for Ukraine to help it defend itself against Moscow’s full-scale invasion.

The assets held by G7 members amount to some $300 billion, with most of that held in Europe by Belgium’s securities depository Euroclear.

In order to secure the loan, the G7 wants to be sure the EU sanctions regime on the assets is not lifted. The diplomats said the Commission had discussed the three options with the United States ahead of time.

“Possible options were presented this morning…already discussed with the U.S.,” one of the diplomats said.

The U.S. representation to the EU in Brussels did not immediately respond to a request for comment. A Commission spokesperson declined to go into details.

A unanimous vote from the EU’s 27 member states is required to renew sanctions on Russia every 6 months. Renewals have sometimes been used as a bargaining opportunity; Hungary’s leader Viktor Orban has held up funding and legislation designed to help Ukraine in the past.

The renewal options were presented to ambassadors on Friday. The first option is a five-year freeze on the assets with a review every 12 months and a qualified majority of EU countries needed to unfreeze the assets, three EU diplomats said.

The second option is a renewal of the asset freeze every 36 months with a unanimous vote, they said. The third option would be to extend the renewal period for all sanctions related to Russia to 36 months from the current six months.

EU countries and the Commission have been discussing sanctions renewal options since July after the Commission first circulated an informal proposal.

“Overall a very constructive and positive meeting this morning. There was an overall feeling in the room that MS (member states) want to find ways forward now,” another of the diplomats said.

(Reporting by Julia Payne and Jan StrupczewskiEditing by Gareth Jones and Philippa Fletcher)