Europe’s use of income generated by frozen Russian assets is becoming a permanent financial mechanism rather than an emergency measure. Belgian-based depository Euroclear plans to transfer €1.4 billion to the European fund supporting Ukraine at the beginning of this year. The payment will be made from interest income earned on Russian assets frozen under sanctions, DKNews.kz reports.
This will be the second transfer in 2025, confirming that the redirection of such income has now become part of the EU’s long-term financial framework.
Almost €5bn transferred so far
According to Euroclear’s statement, total interest income transferred to the Ukraine support fund has already reached around €5 billion. Importantly, these payments do not involve confiscation of the underlying assets - only the profits generated from their reinvestment.
Lower interest rates reduced income
Interest income from frozen Russian assets amounted to €5 billion last year, which is 26 percent lower than in the previous year. Euroclear attributes this decline to falling interest rates.
Under the EU regulation on windfall contribution, the depository created a €3.3 billion reserve for last year. Of this amount, €1.6 billion was transferred to the European Commission in July 2025.
Sanctions affected Euroclear itself
Sanctions against Russia and related countermeasures also had a direct impact on Euroclear’s own financial results:
- operating income fell by €34 million
- direct costs decreased by €113 million
- a €342 million reserve was created to cover significant risks and uncertainty
As a result, total operating expenses reached €455 million.
Russian assets dominate the balance sheet
By the end of last year, Euroclear Bank’s balance sheet stood at €222 billion, of which €195 billion was linked to Russian assets. These holdings remain the main source of interest income now being redirected to Ukraine.
The EU regulation on windfall profits was adopted in May 2024 and applies to central securities depositories holding Bank of Russia assets exceeding €1 million. Transfers of interest income to the Ukraine support fund have been taking place since 15 February 2024.
Legal dispute with the Bank of Russia
Euroclear also recalled the ongoing legal proceedings initiated by the Bank of Russia. Hearings are being held behind closed doors, and the depository has stated its intention to defend its position.
The Russian central bank filed a claim with the Moscow Arbitration Court at the end of last year, seeking 18.2 trillion rubles in damages. The lawsuit followed plans by the European Commission to use frozen central bank reserves to finance Ukraine.
According to the Bank of Russia, Euroclear’s actions caused financial harm because the regulator was unable to dispose of its funds and securities. The case is being heard in closed session due to banking secrecy.
A growing precedent
The situation around Euroclear shows that interest income from frozen assets has effectively turned into a stable funding stream for Ukraine. At the same time, legal battles over the assets themselves are intensifying and are likely to continue for years.
For the global financial system, this represents a major precedent - one whose long-term consequences are still unfolding.
