The EU has decided to keep the assets of the Russian Central Bank immobilised for the foreseeable future. The ban, which is based on a provision for economic emergencies, pushes back against external attempts to release the €210 billion in assets before Ukraine is compensated.
The European Union has agreed to indefinitely immobilise the assets of the Russian Central Bank, a central element of the reparations loan to Ukraine, still under intense negotiations ahead of a make-or-break summit next week.
By doing so, the EU locks in the assets under its jurisdiction for the foreseeable future amid fears that the United States might seek control of the Russian funds and use them in a future settlement with Moscow to end the war.
The long-term immobilisation was agreed by ambassadors on Thursday afternoon under Article 122 of the EU treaties, which only requires a qualified majority from member states and bypasses the European Parliament.
The law prohibits the transfer of the €210 billion in assets back to the Russian Central Bank. The bulk of the assets, €185 billion, is held at Euroclear, a central securities depositary in Brussels. The remaining €25 billion is kept in private banks.
Until now, the funds have been immobilised under a standard sanctions regime, which depends on unanimity from all 27 and is vulnerable to individual vetoes.
But last week, the European Commission pitched to invoke Article 122 to keep the assets away from Russia for the foreseeable future. Article 122 has been previously used to cope with economic emergencies, such as the COVID-19 pandemic and energy crisis.
In a novel interpretation, the Commission argued that the shockwaves unleashed by Russia’s full-scale invasion of Ukraine have caused a “serious economic impact” for the EU as a whole, triggering “serious supply disruptions, higher uncertainty, increased risk premia, lower investment and consumer spending”, as well as countless hybrid attacks in the form of drone incursions, sabotage and disinformation campaigns.
