Brussels: Europe and the Arabs

Extraordinary revenues accumulate due to the freezing of the assets of the Russian Central Bank. The European Commission in Brussels published on Friday more information and clarifications about the first transfer of one and a half billion in proceeds from frozen Russian assets that became available to Ukraine to benefit from. The clarifications came in the form of a question and answer. A statement by the Commission said that due to the freezing of the assets and reserves of the Russian Central Bank, unexpected and extraordinary cash balances accumulate on the balance sheets of central securities depositories (CSDs), resulting in unexpected and extraordinary revenues. These revenues do not have to be provided to the Russian Central Bank under the applicable rules, even after the suspension of the transaction ban (freeze). They do not constitute sovereign assets.

When did you receive these extraordinary revenues?

The Commission received the first payment of extraordinary revenues on July 23, 2024 after the financial contribution from the central depository concerned was called.

What share of the extraordinary revenues will be entered into the European Peace Facility and the Ukraine Facility?
90% of the financial contribution from the exceptional proceeds will go to the European Peace Facility (EPF) and 10% to the Ukraine Facility to support Ukraine’s military and reconstruction needs respectively.

Why don’t you send these exceptional proceeds directly to Ukraine?
The exceptional proceeds are used entirely for the benefit of Ukraine through two EU instruments, the European Peace Facility and the Ukraine Facility. The Directive ensures that the proceeds are spent on strengthening military capabilities and reconstruction in line with sound financial management rules.

Why do you only collect the exceptional proceeds from Euroclear Belgium – what about other central depositories?

Currently, only Euroclear Belgium falls within the scope of the Council Regulation establishing rules on the management of fixed assets. These rules stipulate that only central depositories holding reserves and assets of the Russian Central Bank of more than EUR 1 million are subject to the obligations to allocate the amounts and report to the Commission on the exceptional proceeds generated.

When will you receive the next payment from these exceptional proceeds?
The next application for a financial contribution from the relevant securities centre will be submitted in March 2025.