EditThe €300bn question: Why Russia’s frozen assets are still not financing Ukraine
Four years after the first pledges, sovereign assets remain frozen, private assets rarely reach confiscation, and sanctions fines are only partially redirected
Four years ago, Ukraine’s international partners pledged that Russia would pay for its war. Sovereign assets of the Russian Central Bank were frozen, along with private assets belonging to individuals linked to the aggression. Moscow was cut off from global financial markets and enforcement of sanctions was stepped up.
At the time, it appeared that confiscating those assets and redirecting them to support Ukraine was only a matter of time. Senior EU officials, including then High Representative Josep Borrell, backed the idea of using frozen funds for reconstruction. Ukraine’s president proposed a multilateral treaty to that effect. In November 2022, the UN General Assembly recognised Russia’s obligation to compensate for the damage caused.
Yet the decisive step – confiscation – has not been taken.
According to monitoring by the Institute of Legislative Ideas, which has tracked the issue since 2022, the principle that “the aggressor will pay” now rests on partial solutions and political compromises rather than full-scale asset seizure.
Sovereign assets: frozen but not confiscated
The main focus has been on roughly $300 billion in frozen sovereign Russian assets. After the full-scale invasion, many expected direct confiscation. However, resistance from some countries – including Belgium, a key holder of these funds – made clear that outright seizure would not proceed.
Instead, governments opted for a compromise: using not the assets themselves, but the income generated from them.
In July 2024, Ukraine received a first tranche of €1.5 billion derived from such revenues. In autumn 2024, G7 countries agreed on the Extraordinary Revenue Acceleration (ERA) mechanism – a loan of around $50 billion to be repaid from future proceeds generated by frozen Russian assets.
In 2025, $37.9 billion was mobilised under the programme, with the EU fulfilling its commitments in full. However, according to IMF estimates, Ukraine’s financing gap for 2026-2029 stands at approximately $136.5 billion. The ERA mechanism is gradually being exhausted, while U.S. support has become less predictable following Donald Trump’s return to the White House.
In autumn 2025, the European Commission proposed a new “reparations loan” of up to €140 billion, based not on income but on the frozen assets themselves. The proposal would have represented an unprecedented step. It was not adopted, after opposition from several member states.
Instead, the EU agreed on a €90 billion loan for 2026-2027 financed through EU borrowing rather than Russian assets. Even this decision is currently blocked, as Hungary has refused to support one of the necessary documents, linking its position to the transit of Russian oil via the Druzhba pipeline.
Meanwhile, the Russian Central Bank has filed a lawsuit against the EU in Luxembourg over the freezing of its assets. Although focused on specific legal aspects, the case could lead to closer scrutiny of regulatory decisions related to the war.
For now, sovereign Russian assets remain frozen but untouched.
Private assets: slow and stalled
Attention to private Russian assets – estimated at over $50 billion – has been more limited. Unlike sovereign funds, decisions on these assets are taken by individual states where they are frozen. They do not pose systemic risks to global financial stability and cannot be blocked by a single country.
Even where legislation allows confiscation, progress has been slow.
In Canada, legislation adopted in December 2022 enabled the confiscation of $26 million linked to Roman Abramovich. More than three years later, the decision has not been implemented. An Antonov An-124 aircraft was arrested in June 2023, but confiscation proceedings began only in May 2025. The owner filed a $100 million lawsuit citing a bilateral investment treaty between Canada and Russia.
Estonia introduced a legal mechanism allowing the use of frozen assets to compensate Ukraine, becoming the first EU country to do so. However, despite around €50 million being frozen at national level, no practical steps have yet followed.
The case of the sale of Chelsea Football Club illustrates further delays. In June 2022, Abramovich received a special licence from the UK authorities to sell the club. The expected £2.5 billion was to support victims of the war in Ukraine. The funds remain in a UK bank account due to a dispute over their use. The British government insists the money should go exclusively to humanitarian needs in Ukraine, while Abramovich has argued it should also benefit Russian soldiers affected by the war. In late 2025, London gave a final opportunity to agree voluntarily on transferring the funds to Ukraine, otherwise the case may go to court.
To date, there has been no case of full confiscation of frozen private assets followed by their transfer to Ukraine.
A frozen Russian assets breakthrough: Abramovich’s Chelsea billions will head to Ukraine
Ukraine’s domestic mechanism and sanctions fines
Inside Ukraine, a confiscation mechanism has been operating since three months after the full-scale invasion began. A law allows the seizure of assets belonging to individuals involved in threats to national security and territorial integrity.
The High Anti-Corruption Court has issued more than 76 decisions applying the sanction of asset confiscation. The state has received over UAH 561 million and $236 million, as well as hundreds of properties, vehicles and corporate rights.
Separately, Ukraine has nationalised corporate rights and financial assets of the Ukrainian subsidiaries of Sberbank and VEB RF, along with around 1,600 railway wagons owned by Russian companies.
However, the pace has slowed. In 2024, 27 lawsuits were filed by the Ministry of Justice’s Sanctions Policy Department seeking confiscation. In 2025, that number fell to 15. The department was merged with the ministry’s litigation unit, reducing its institutional capacity.
Fines for sanctions violations have generated significant sums abroad. Over $215 million was collected in the GVA Capital Ltd case. A German court confiscated more than €5 million for exporting luxury cars to Russia in violation of sanctions.
In the United States, legislation adopted in 2023 allows the transfer to Ukraine of funds confiscated from sanctions violators. $5.4 million has already been directed to the rehabilitation of Ukrainian veterans and around $500,000 to energy infrastructure recovery. The mechanism applies only to assets confiscated before 1 May 2025 and excludes civil fines.
Lithuania has allowed not only confiscated property but also sanctions fines to be transferred to Ukraine, with the first €167,000 already allocated for veteran rehabilitation.
In most other countries, such funds remain in national budgets.
Four years after the first pledges, sovereign assets remain frozen, private assets rarely reach confiscation, and sanctions fines are only partially redirected. The commitment that “the aggressor will pay” remains, for now, more evident in declarations than in final figures.
Tetyana Khutor and Andriy Klymosyuk from Analytical Center “Institute of Legislative Ideas” wrote the article for EUalive’s partner European Pradva. It’s full version in Ukrainian can be found here.
Caption: Ukrainians hold placards during a protest demanding the use of the frozen Russian assets, on the sidelines of the Economic and Financial Affairs Council (ECOFIN) meeting in Brussels, Belgium, 12 December 2025. Belgium has been blocking an EU plan to approve a large ‘reparations loan’ for Ukraine backed by frozen Russian state assets, because it fears major legal and financial risks since most of those assets are held in Brussels and is demanding stronger guarantees before it will agree to let the scheme go ahead. EPA/OLIVIER HOSLET
Updated: March 5, 2026 - 06:30
