Ukraine Closing In on Russian Money Bonanza

International momentum on both sides of the Atlantic is building for Ukraine to benefit from Russian assets frozen due to Vladimir Putin’s full-scale invasion.

The Restoring Justice for Ukraine conference in The Hague on Tuesday saw 44 countries back a special tribunal to address Moscow’s ongoing aggression and support a move for “immobilized Russian sovereign assets” to be used to help rebuild the war-torn country.

With continued U.S. military aid for Kyiv held up in Congress amid a debate about how Europe will fund its war efforts, a different weapon against Russia could be deployed to leverage around $300 billion of Central Bank of Russia assets frozen in the West.

Sanctions aimed at isolating Moscow from the global financial system and choking its revenue to wage war included targeting the Russian assets, which are largely in foreign currency, gold and government bonds.

Around 70 percent of them worth €190 billion ($206 billion) are held in the Belgian central securities depository Euroclear, but there are concerns over whether seizing the assets wholesale would undermine its reputation as a safe place to invest.

“They’ll do it, they just have to find a legal way to do this,” said Scheherazade Rehman, professor of international affairs at the George Washington University in Washington, D.C. “They also fear Russian retaliation on European assets and that’s not inconsequential.”

Rehman, who has advised institutions including the U.S. State Department and the World Bank, said discussions about frozen Russian assets are “less aggressive” from European leaders than those in Canada, the U.K. and the U.S.

As Congress discusses a new Ukraine aid bill, talks will ramp up on the U.S. House and Senate committees’ approval of legislation to confiscate up to $8 billion in Russian sovereign assets under U.S. jurisdiction to help finance Ukraine’s recovery.

House Speaker Mike Johnson told Fox News that the Russian asset seizure proposal could be the GOP answer to a Biden administration request for more Ukraine aid.

EU leaders’ proposals are targeted not at the frozen assets themselves but the after-tax profits of the Russian deposits, which are likely to generate between €15 billion ($16 billion) and €20 billion ($21 billion) between now and the end of 2027, depending on how interest rates develop.

“They’re a little bit afraid to go after the whole $300 billion because retaliation is coming and they know it,” Rehman said. “I believe they will go with leveraging it and taking the profits rather than seeking the $300 billion. Then there will be an entirely different, huge discussion about what are you going to use it for.

“If you use it for direct military aid—that becomes a lot more controversial than if you use it to rebuild infrastructure in Ukraine.”

Russia’s economy has so far been relatively resilient to some of the wide-ranging sanctions imposed since the start of the war, but using frozen funds would provide a direct benefit for Ukraine.

“We punished them when we locked him out of the SWIFT international financial payment system. We punished them when we didn’t give them access to foreign exchange,” said Rehman. “This is less about punishment than scrounging for money.”

“It’s about funding this venture that we all believe in and can’t find the money for,” she added.

The Hague conference this week also backed the Register of Damage Caused by the Aggression of the Russian Federation against Ukraine, which was established last May by the Council of Europe.

It allows victims of Russia’s war to log compensation of property damage, which would be part of any rebuilding process and will later allow applications for forced displacement, harm to life and violence, among other things.

Dmytro Kuleba, the Ukrainian foreign affairs minister, hailed the growing international approval for a tribunal “for the crime of Russian aggression against Ukraine.”

“A year ago, it appeared to be mired in disputes between states,” he posted on X, formerly Twitter, adding that now most states “have a clear understanding that there is no alternative to establishing a fully functional tribunal.”

Wayne Jordash, a British lawyer supporting Ukraine’s Office of the Prosecutor General in analyzing crimes against humanity, told Newsweek the registry was “just the beginning of the process” to quantify the widespread and systematic damage Russia has caused in Ukraine.

“However, enforcement is the key—how willing are democratic countries, and not just those 40-odd states and the EU, that have signed up as members to use Russia’s frozen assets, or demand reparation from Russia, not just now, but for years to come,” added Jordash, managing partner of Global Rights Compliance.