The issue of frozen Russian assets has remained unresolved since the onset of the full-scale war. Each year, Kyiv’s allies mount a herculean effort to provide the $40–60 billion needed to cover its budget deficit, all the while reluctant to unlock the vast trove of Russian wealth in their custody.
More than $300 billion of Russian assets have been frozen across multiple countries, predominantly in Europe. Yet, despite persistent pressure from some European and American politicians, no legal framework has been established to transfer these funds to Ukraine. This money could play a crucial role in financing the reconstruction of Ukraine’s devastated infrastructure—a bill that continues to swell, now estimated at $600 billion.
In April 2024, the US Congress passed the Rebuilding Economic Prosperity and Opportunity for Ukrainians Act (REPO), granting the Biden administration authority to seize $5 billion of Russian assets and channel them into a dedicated Ukraine Support Fund.
However, the procedure was never put into action, as it required formal approval from the G7 nations and all 27 EU member states. Instead, a so-called compromise was reached: Ukraine would receive a $50 billion loan, to be repaid using the interest generated by the frozen Russian assets — around $5 billion a year.
In 2025, US officials continued to press for progress. In January, during the final days of the Biden administration, Washington urged European allies to leverage the frozen assets in negotiations with Moscow. Then, in March, bipartisan calls intensified, urging the incoming Trump administration to deploy every available financial tool to pressure Putin — chief among them, the outright confiscation of Russian assets.
To confiscate or not to confiscate?
Donald Trump’s return to power reignited the debate over Russia’s frozen assets across Europe. The issue drew heightened attention following Volodymyr Zelensky’s unsuccessful visit to Washington in February 2025 and the subsequent suspension of US military aid.
On 15 May, just days after returning from Kyiv, Germany’s new chancellor Friedrich Merz raised the prospect of confiscating Russian assets. Like many of his European counterparts, he voiced support for transferring the funds to Ukraine — but only if a “legally sound” mechanism could be established. “If the assets can be mobilised legally, we will certainly do it. But we must consider the risks to the European financial market,” he cautioned.
Backing for confiscation is growing across the continent. Spain’s foreign minister José Manuel Albares proposed using the frozen assets as an advance on future reparations from Russia. Poland, the Czech Republic and Estonia have all called for full confiscation. In March 2025, the French parliament voted to urge EU leaders to expedite the transfer of funds to Ukraine, despite President Macron’s ongoing reluctance.
The French president is not alone in his hesitation to support the transfer of Russian assets to Ukraine. Among the sceptics are European Central Bank president Christine Lagarde and UK Prime Minister Keir Starmer — despite London having frozen around $30 billion. However, just days ago, the British government proposed investing these assets to generate higher returns, which could then be channelled to Ukraine.
France’s finance minister, Éric Lombard, has cautioned that confiscating Russian funds could undermine global confidence in the euro as a reserve currency. Meanwhile, Belgian Prime Minister Bart De Wever warned that such a move would amount to “an act of war” and risk destabilising the entire international financial system.
Mechanisms behind confiscating assets
Despite some politicians’ dire warnings, the legal transfer of frozen Russian assets to Ukraine is entirely achievable. In 2024, the European Parliament’s Research Service published a report detailing the conditions under which such a transfer could be carried out lawfully. Central to this is framing the confiscation as a countermeasure against Russia’s violations of international law. Once seized, the funds would need to be transferred through an appropriate mechanism — for example, by placing them in escrow accounts for Ukraine to use as collateral for new loans.
The report’s authors emphasise that, under international law, states are obliged to provide reparations for internationally wrongful acts. A ruling by the Permanent Court of International Justice states: “It is a principle of international law, and even a general conception of law, that any breach of an engagement involves an obligation to make reparation.”
This obligation can be enforced by any state through established legal procedures. For instance, after Iraq’s unlawful invasion and occupation of Kuwait, the UN Security Council reaffirmed the duty to provide reparations, declaring Iraq “liable under international law for any direct loss, damage — including environmental harm and depletion of natural resources — or injury to foreign governments, nationals and corporations resulting from its unlawful invasion and occupation of Kuwait.”
The UN General Assembly has already affirmed that Russia “must bear the legal consequences of all its internationally wrongful acts, including making reparation for the injury, including any damage, caused by such acts.”
The report’s authors argue that a solid legal foundation already exists for transferring Russian assets to Ukraine. What EU leaders must now do is establish a mechanism that classifies these funds as reparations, while also mitigating the financial market risks highlighted by Chancellor Merz.
Alternatively, the confiscation could be justified as a reciprocal measure in response to Moscow’s own actions. In 2024, Vladimir Putin signed a decree permitting the seizure of all American assets in Russia — a measure later expanded to include property belonging to all “unfriendly” countries.
How Russia funds Ukraine’s weapons
While debates over frozen Russian assets persist, European countries are exploring new ways to channel the returns generated by these funds. On 19 May, it was announced that around €90 million would be allocated to Finland as compensation for a new military aid package to Ukraine, including 155mm shells, air-to-surface missiles, and other equipment. Finnish Defence Minister Antti Häkkänen said the funds would be directed to domestic arms manufacturers, helping to boost aid while also creating new jobs at home.
Just days earlier, speaking in Lviv, French Foreign Minister Jean-Noël Barrot revealed that proceeds from Russian assets would be used to repair CAESAR artillery systems. While these measures stop short of unlocking the full value of frozen Russian assets, they at least help to ease the strain on national budgets across the European Union.
Fortunately, EU leaders have not overlooked Ukrainian manufacturers. Last week, Ukrainian Prime Minister Denys Shmyhal announced a €1.9 billion package, noting that “€1 billion will be directed towards purchasing weapons from Ukrainian producers. Over €600 million will be allocated to artillery and ammunition, with more than €200 million earmarked for strengthening Ukraine’s air defences.”
Restoring justice
More European politicians are coming to recognise that, given the unpredictability of Washington’s stance, there is an urgent need to identify new sources of support for Ukraine. Frozen Russian assets remain the clearest and most accessible option.
It is unlikely Ukraine will see these funds released in the coming months — possibly not until well into 2025 or beyond. Yet the process is gaining momentum, propelled by several factors: the volatility of US aid, Moscow’s refusal to engage with peace proposals, and the pressing need to secure sustainable financing for Ukraine.
Opponents of confiscation continue to cite concerns over violating international law. Yet Russia has been flagrantly breaking that very law every day for more than three years, while openly threatening war not only on Europe but the wider world. Seizing its assets shouldn’t be seen as a violation of international law but as a necessary step to uphold it.
