Frequently asked questions

Immobilization alone is insufficient to meet Ukraine's needs.

Keeping Russia's immobilized sovereign assets out of Moscow's hands matters, but indefinite immobilization alone is not enough. Ukraine's recovery needs now exceed $588 billion, with $666 billion in losses over the past four years and total losses since 2014 topping $1 trillion. Russia's continued bombardment of civilian infrastructure deepens that toll daily. A large share of assets once held as debt securities has matured into cash, making the assets more practically and legally manageable. The question is no longer whether to act, but how to structure action that is lawful, financially prudent, and does not leave holding jurisdictions carrying disproportionate risk.

Repurposing RSA is in Europe's direct security and economic interest.

Investing in Ukraine's security, reconstruction, and compensation is investing in European security. Transferred funds would strengthen Ukraine's defense and deter further Russian aggression. Timely compensation and recovery funding would prevent prolonged instability, economic collapse, and renewed displacement — all of which carry long-term costs for Europe. Reconstruction will also create substantial opportunities for European firms across defense, energy, infrastructure, telecoms, agriculture, banking, and technology.

Keeping the assets idle undermines a just peace.

Decisive action on frozen Russian assets strengthens prospects for a just peace by making aggression costly. If the frozen assets were meaningful leverage for a ceasefire, that would have materialized across four years of negotiations — but it has not. Russia's priority is conquering Ukraine, not recovering these reserves. Leaving the assets idle withholds resources Ukraine needs now while offering no comparable strategic payoff. Mobilizing the assets for Ukraine's defense, recovery, and compensation would help restore confidence that the international system can respond meaningfully to aggression.

What are sovereign assets?

Russian sovereign assets are central bank reserves and related state holdings — funds accumulated by the Russian government and held in foreign financial institutions. Although the bulk consists of Central Bank of Russia reserves, "Russian state assets" is a broader category that also includes the Russian National Wealth Fund and the Russian Direct Investment Fund, among others. In total, approximately $300 billion in Russian state assets have been frozen across G7 jurisdictions, with the majority held via Euroclear in Belgium.

How are they different from private assets?

Frozen state assets are distinct from frozen private wealth. Approximately 2,000 Russian individuals and companies have been subjected to sanctions across the EU, US, Australia, Canada, and other members of the sanctioning coalition. The total amount of private property frozen was estimated at around $58 billion as of early 2023 — a fraction of the state asset total.

Why is the focus on state assets rather than oligarch wealth?

Two reasons. First, the scale of private frozen assets is far smaller and insufficient to meaningfully address Ukraine's recovery needs. The total amount of private property frozen was reported to amount to US$58 billion as of early 2023. Second, and more fundamentally, there is no legal basis for confiscating private property unless it constitutes the proceeds or instrumentalities of crime. State assets, by contrast, are subject to a different legal framework — one that permits countermeasures in response to internationally wrongful acts by the state that owns them.

"Frozen" vs. "immobilized"

Both terms are used interchangeably, and functionally they result in the same thing: Russia cannot use, sell, or otherwise dispose of the assets, though it remains their legal owner. Technically, "immobilization" refers to a regulation governing the conduct of financial institutions, not the status of the assets themselves. Financial institutions are restricted from performing transactions involving the relevant assets. However, the practical distinction is limited because there is no way to dispose of financial assets other than through financial intermediaries.

"Seizure," "confiscation," "transfer," and "repurposing"

These terms are also frequently used interchangeably, but politically they may have different connotations. "Seizure" and "confiscation" imply that the acting state formally takes title to Russia's assets for itself, while "transfer" and "repurposing" describe a process by which title is transferred from Russia directly to the lawful beneficiary — Ukraine — in satisfaction of Russia's reparations obligation. In other words, "transfer" and "repurposing" focus on making them available to Ukraine. This site uses "transfer" and "repurposing" as the default, reflecting the framing that what is at stake is not the taking of Russian property, but the enforcement of Russia's existing obligation to pay reparations to Ukraine.

The short answer is that we don't fully know — and that's itself a significant problem.

The commonly cited figure is approximately $300 billion in Russian Central Bank reserves immobilized across Western jurisdictions after February 2022. But no comprehensive, consistent public accounting exists. What we know has been pieced together from Euroclear's quarterly financial reports, occasional statements by government officials, the CBR's own last annual report before the invasion, and fragments of parliamentary and regulatory disclosures. Based on that patchwork, roughly $270–$290 billion can be identified with varying degrees of certainty.

Most governments have disclosed little or nothing.

The U.S. Treasury has publicly confirmed only $5 billion in directly frozen CBR funds, while keeping a classified annex with the full aggregate. Japan has disclosed essentially nothing, despite the CBR's own 2021 report indicating it held roughly $57 billion worth of assets there. The U.K. has never publicly disclosed the separate reports it receives from financial institutions on Russian state entity holdings. In Canada, a formal parliamentary inquiry into the value of Russian state assets in Canadian jurisdiction yielded no new information, with the government stating that details on asset ownership remained "a commercial confidence of Euroclear." France presents its own puzzle: the CBR reported holding around €70 billion there at end-2021, but French authorities cited €22.8 billion in April 2022 and €19 billion by December 2023, with no public explanation for the discrepancies.

There is also a jurisdictional complexity that has gone largely unaddressed.

When the assets were first frozen in 2022, most were held as debt securities — government bonds in the custody of depositories like Euroclear, primarily subject to Belgian and EU jurisdiction. Since then, nearly all of those securities have matured into cash, which is now held in correspondent banks around the world in the currency of the original bond. This means a significant portion of the assets — estimated at $104 to $126 billion — is now subject to the jurisdiction of non-EU countries, including the United States, United Kingdom, Canada, Japan, and Australia. Most of those governments have disclosed little or nothing about the Russian state assets now within their reach. The practical consequence is that the commonly repeated framing that "nearly all the frozen assets are in Euroclear/Belgium" is no longer accurate, and the lack of transparency across jurisdictions makes it difficult to know the full picture.

Tracking the Numbers

United States

On April 24, 2024, then U.S. President Biden signed into law the Rebuilding Economic Prosperity and Opportunity for Ukrainians Act (the 'REPO Act'). The REPO Act allows the President to confiscate Russian sovereign assets to be deposited into the "Ukraine Support Fund." The Ukraine Support Fund is to be administered by the Secretary of State and may be used for:

• making contributions to an international body, fund, or mechanism that is charged with determining and administering compensation or providing assistance to Ukraine (such as the expected Claims Commission);
• supporting reconstruction, rebuilding, and recovery efforts in Ukraine; and
• providing economic and humanitarian assistance to the people of Ukraine, and other purposes for the welfare of the Ukrainian people.

Once an agreement is reached with the U.S. to establish a common international compensation mechanism (such as a trust fund accompanying the Claims Commission), the Secretary of State shall transfer funds from the Ukraine Support Fund to a "Common Ukraine Fund" that uses proceeds from Russian sovereign assets confiscated in the U.S. and other jurisdictions as compensation for Ukraine.

On September 19, 2025, U.S. Senators introduced the REPO Implementation Act of 2025 ('REPO 2.0'). If passed, REPO 2.0 would mandate the transfer of all of the estimated U.S. $5 billion in frozen Russian sovereign assets under U.S. jurisdiction to an interest-bearing account. The President would be encouraged to repurpose at least U.S. $250 million from that account "to benefit Ukraine" every 90 days. REPO 2.0 also includes measures on cooperation with other competent authorities, including encouraging the Secretary of State to implement a diplomatic campaign to persuade U.S. allies to begin repurposing at least 5% of Russian sovereign assets to benefit Ukraine according to the same schedule, and requiring reports on Russian sovereign assets held outside of the U.S.

Canada

Canada's C-19 Budget Implementation Act, which received royal assent on June 23, 2022, modified the 1992 Special Economic Measures Act and the 2017 Justice for Victims of Corrupt Foreign Officials Act. The amendments allow the Minister of Foreign Affairs to apply for a court order for assets frozen under sanctions to be forfeited where there have been grave breaches of international security, gross and systematic human rights violations, or significant corruption overseas, or a United Nations request for sanctions. A judge may make an order for assets which are owned, held or controlled by a foreign State, a person in that foreign State, or a national of the foreign State, to be forfeited. The net proceeds can be used for reconstructing Ukraine, restoring international peace and security, and compensating survivors (as a form of reparation).

Bill S-214, introduced by Senator Donna Dasko, proposes to further amend the 1992 Special Economic Measures Act to establish distinct mechanisms for the repurposing of sovereign assets, rather than private assets. Under the current framework, repurposing sovereign assets would require recourse to a judicial mechanism, bringing sovereign immunity concerns under Canada's State Immunity Act. By carving out a separate track for sovereign assets, Bill S-214 reflects that sovereign property requires a tailored approach distinct from the forfeiture mechanisms more straightforwardly applicable to private assets.

Estonia

In May 2024, Estonia became the first EU member state to pass legislation enabling the use of frozen Russian assets to compensate Ukraine. The law permits the Estonian Ministry of Foreign Affairs to confiscate assets belonging to sanctioned individuals and entities and direct the proceeds as prepayment toward compensation for damage caused by Russia's unlawful use of armed force. Several conditions must be met:

• there must be a demonstrated connection between the asset owner and the commission of an unlawful act;
• Ukraine must have submitted an unsatisfied claim for compensation;
• the asset owner must be notified and may contest the decision before an administrative court; and
• the funds must be requested by Ukraine, an international organization, or an internationally recognized compensation mechanism such as the expected Claims Commission.

Estonia holds approximately €38 million in frozen sanctioned assets, primarily belonging to two oligarchs. The amounts are modest, but the legal framework is explicitly designed as a model for other EU jurisdictions. Activation requires either a bilateral agreement with Ukraine or the involvement of an international compensation mechanism.

Windfall profits from Euroclear

The most direct mechanism to date involves the interest generated on frozen Russian assets held at Euroclear. In February 2024, the EU Council required depositories holding frozen Russian Central Bank assets exceeding €1 million to account for proceeds separately rather than reinvesting them, paving the way for transferring Euroclear's windfall profits to Ukraine.

Three tranches have been transferred to date: approximately €1.55 billion in July 2024, approximately €2 billion in April 2025, and €1.6 billion in August 2025. In 2025, Russian assets at Euroclear generated €3.9 billion in interest — somewhat lower than prior years due to ECB rate cuts — of which €2.6 billion was transferred to the European Commission under the windfall contribution regulation. Separately, Belgian tax revenues collected on Euroclear's profits totaled €1.7 billion in 2024, though their disposition has not been publicly confirmed.

ERA Loan

The Extraordinary Revenue Acceleration (ERA) initiative is a G7 program providing Ukraine with a $50 billion loan backed by future revenues from frozen Russian assets. The U.S. disbursed its full $20 billion contribution in December 2024, and the EU has fully disbursed its €18.1 billion contribution across a series of tranches in 2025. Together with disbursements from the UK, Canada, and Japan, total ERA loans to Ukraine have reached approximately €30.9 billion.

Repayment is structured over 30 to 45 years and is expected to be serviced entirely from future windfall proceeds — Ukraine is not expected to repay the loans from its own resources. The ERA initiative demonstrated that frozen Russian assets can serve as the basis for large-scale financing even before any final decision is made on transferring the principal.

The Reparations Loan is a proposed EU mechanism that would go a step further than the ERA initiative by borrowing against the principal of frozen Russian assets, not just the interest they generate. The European Commission's proposal, advanced in late 2025, would require Euroclear to lend the EU up to €140 billion interest-free, drawing on the cash balances associated with immobilized Russian Central Bank assets. The EU would then on-lend those funds to Ukraine for defense, recovery, and reconstruction. Ukraine would only be required to repay the loan once Russia pays reparations — meaning that in practice, the burden of repayment would fall on Russia as the aggressor, not on Ukraine.

The proposal ran into significant political resistance at the December 2025 European Council summit, primarily from Belgium, which hosts Euroclear. Unable to bridge those differences in time, EU leaders instead agreed to a €90 billion loan for 2026 and 2027 financed through conventional EU borrowing on capital markets, backed by the EU budget. The December 2025 European Council conclusions explicitly called for continued work on the technical and legal aspects of the Reparations Loan, leaving the door open for a future agreement. As of early 2026, the proposal remains under active negotiation.

The prevailing expert view is yes. Leading international law scholars and practitioners from all G7 jurisdictions — including Dapo Akande, Harold Koh, Philippe Sands, Nico Schrijver, and Christian Tams — have argued in favor of the lawfulness of transfer in a memorandum coordinated by Philip Zelikow. Philippa Webb reached the same conclusion in a study commissioned by the European Parliament.

The legal basis is the international law doctrine of countermeasures, which permits states to take actions that would otherwise be contrary to international law in order to respond to another state's breach, provided the response is proportionate and aimed at restoring compliance. The underlying principle is that a state only benefits from the protection of its property rights when it is itself abiding by international law. Russia has violated two fundamental obligations: the prohibition on wars of aggression, and the duty to pay reparations for the damage caused. When misconduct is sufficiently egregious — as virtually every major international body has affirmed Russia's is — it is considered to affect the entire international community, giving any state the right, and arguably the obligation, to take countermeasures. By transferring assets to an international compensation mechanism, participating states would be compelling Russia to satisfy its existing reparations obligation — not "confiscating" property arbitrarily, but enforcing a debt that is already owed. At this point, the legal question has largely been answered. What remains is a political one.

The Legal Case

Countermeasures, to be lawful under international law, must be taken "as far as possible" in a way that permits the resumption of normal obligations once the offending state comes back into compliance. This is known as the reversibility requirement, drawn from Article 49 of the Articles on the Responsibility of States for Internationally Wrongful Acts (ARSIWA). A common objection to transferring Russian assets is that doing so is irreversible, but this is a misunderstanding of what the reversibility requirement actually applies to.

The countermeasure at issue is not the transfer of assets itself, but the temporary suspension of the obligations normally owed to Russia — specifically, non-interference with its sovereign property. That suspension lasts only as long as Russia remains in breach of its international obligations. Once Russia ceases its aggression and satisfies its reparations obligation, normal legal relations are restored: its future and remaining reserves would again be entitled to full protection. What Russia cannot claim is the return of funds already lawfully transferred to compensate Ukraine — it can only require that transfers not exceed what it owes, and that they be credited against that debt. Since Russia's reparations obligation already exceeds the total value of its immobilized reserves, no over-collection is possible.

It is also worth noting that the reversibility requirement is not absolute. Article 49 explicitly provides that it may not always be possible to reverse all effects of countermeasures. The damage Russia has caused must be addressed quickly for any remedy to be effective — delay only compounds the harm, to the point where the countermeasure loses its practical purpose entirely.

This is one of the more debated legal questions in this area, but the weight of authority supports the answer: yes. The traditional framework for countermeasures was designed for disputes between two states — the one that committed a wrongful act, and the one directly harmed by it. The objection to "third-party" countermeasures is that other states are not directly injured and therefore lack standing to act.

But this framing is somewhat misleading. Russia has breached obligations that are owed to the entire international community, not just to Ukraine: the prohibition on aggressive war, the rules of warfare, and fundamental human rights norms.

These are what international law calls "erga omnes" obligations: duties that run to all states, not just the directly affected party. When these obligations are violated, any state has standing (and arguably even the obligation) to respond. In that sense, calling Western governments "third parties" mischaracterizes their legal position. They are not bystanders intervening in someone else's dispute — they are members of an international legal order whose foundational rules Russia has broken, and taking countermeasures to enforce Russia's reparations obligation is squarely within the framework of collective responsibility under international law.

No. Sovereign immunity is a concept that prevents the courts of one state from sitting in judgment of the governmental acts of another, or executing upon another state's sovereign assets. It is the most commonly cited legal objection to asset transfer — but it is largely a red herring in this context, because the mechanisms under discussion do not involve courts at all. Countermeasures would be adopted through executive action, legislation, or cabinet decisions. These are political acts of state, not judicial ones, and sovereign immunity simply does not apply to them.

What actually protects Russia's assets from interference by other states is not sovereign immunity but a set of customary obligations: the reciprocal regard sovereigns extend to one another, bilateral investment treaties, and the general expectation that a confiscating state would compensate for what it takes. But none of these protections are absolute, and that is precisely what the doctrine of countermeasures addresses. When a state commits sufficiently serious violations of international law, those obligations of reciprocal regard can be lawfully suspended until the offending state returns to compliance. To the extent sovereign immunity is still considered relevant, the countermeasure itself operates to suspend it for that purpose.

Some find it counterintuitive that property can be taken outside of a judicial process. But the rules that govern individuals and the rules that govern states are different. Individuals have due process rights that must be respected through court proceedings. States, under international law, operate in a different framework — one where the response to wrongful conduct is state responsibility and countermeasures, not litigation.

This is reparations, not theft. Under international law, Russia owes Ukraine full reparation for the damage caused by its war of aggression, an obligation recognized by the UN General Assembly and by most estimates already exceeding the total value of frozen assets. Russia owes Ukraine a financial debt it is unwilling to discharge. The "theft" framing is a Kremlin narrative. What is actually at stake is enforcing the largest inter-state financial obligation of modern times.

The analogy to individual liability is straightforward: when a person commits a tort (an act that harms another), they are obligated to compensate the victim, and their assets can be seized to ensure they do. The same principle applies to states.

European Central Bank President Christine Lagarde has argued that forcing Russia to pay would "break the international order." But this has it backwards. Property rights were never intended to carry more weight than human rights, international peace and security, or the foundational norms of the UN Charter. Transferring Russian assets to compensate Ukraine's victims would not break the international order — it would uphold it. Countries that take this step would be complying with their obligations under the very rules Russia has violated, including the UN Charter and the Genocide Convention. It is already accepted that Ukraine and its allies may lawfully destroy Russian military property in the course of legitimate self-defense. Transferring Russian state assets to compensate victims of the same aggression rests on similar legal foundation.

Russia has already filed suit before the EU's General Court challenging the December 2025 indefinite immobilization regulation — timed to create legal uncertainty and discourage action, not because the legal case is strong. Sovereign immunity does not apply to sanctions measures adopted by political institutions, the countermeasures doctrine favors the EU given that the freeze is a proportionate response to Russia's internationally wrongful acts, and the General Court has repeatedly dismissed similar challenges brought by Russian entities. The lawsuit also has no bearing on asset transfer or segregation, which rest on entirely separate legal foundations.

Could Russia challenge asset transfer before the ICJ?

No viable path exists. The ICJ — the international court with the widest powers to hear disputes between states — can only exercise jurisdiction where both parties have consented, either through a standing declaration, a specific agreement, or a treaty with a dispute resolution clause covering the subject matter. Russia does not accept the ICJ's compulsory jurisdiction, and no EU member state would voluntarily submit to it for this purpose. No international convention currently in force would bring such a dispute within the ICJ's reach. Russia's challenges to the unlawful occupation of Crimea, its covert invasion of the Donbas, and its full-scale invasion of Ukraine have all evaded accountability precisely because Russia has structured its international commitments to avoid adjudication — a fact that cuts directly against any claim that it could now haul Western governments before an international court.

What about bilateral investment treaties?

Russia has bilateral investment treaties (BITs) with a number of EU member states, and it has been suggested these could provide a basis for challenging asset transfer. They cannot. BITs are designed to protect investments by private investors — persons and legal entities — not by the contracting states themselves. Russia, as a sovereign state, does not qualify as an "investor" under the standard definition used in these treaties, including its BIT with Belgium and Luxembourg. Even setting that aside, any Russian claim would face additional obstacles: many of Russia's BITs limit arbitration to disputes over the amount of compensation for expropriation, not whether an expropriation occurred at all — a distinction Russia itself has long relied upon. A claim would also likely be deemed inadmissible on public policy grounds, given that it would amount to a challenge to measures designed to hold Russia accountable for an unprovoked war of aggression. And even if a tribunal somehow ruled in Russia's favor, enforcement of any such award could be blocked on public policy grounds in EU member states and other major arbitration seats. The litigation risk, in short, has been significantly overstated — and should be given little weight by policymakers.

There is meaningful precedent, and it spans decades. During World War I, the U.S. Trading with the Enemy Act allowed for the confiscation of enemy property. During World War II, Japanese and German assets were frozen and later offset against each nation's reparations obligations. These were not regarded as unlawful at the time, and they have not been seriously challenged since.

The most directly applicable precedent is the UN Compensation Commission (UNCC), established in 1991 following Iraq's invasion of Kuwait. Iraq's breach of fundamental peremptory norms of international law, and its corresponding duty to pay reparations, was widely accepted. The U.S., UK, and France led the transfer of frozen Iraqi state funds to an international escrow account to provide compensation to victims, without Iraq's voluntary consent. The immunity of Iraq's state assets was suspended to effectuate the transfer. The current situation with Russia follows the same framework: Russia's reparations obligation is recognized by UN General Assembly Resolution ES-11/5, the International Claims Commission provides the adjudication mechanism for processing claims as the UNCC did for Iraq, and frozen Russian state assets provide the funding source — just as Iraqi frozen assets funded UNCC awards.

One can argue that none of these examples are perfectly identical to the current circumstances. But that argument overlooks both the well-established legal doctrines designed to address exactly these situations, and the fact that the circumstances themselves are historically unusual: an outright war of aggression, hundreds of billions in frozen aggressor assets sitting untouched, and Ukraine's population — along with Western taxpayers — continuing to bear the burden. Under these conditions, precedent will be set either way, by action or by inaction.

The short answer is that this concern, while understandable, is largely not supported by the evidence. The event most likely to trigger capital flight from G7 currencies was the immobilization of Russian state assets in early 2022 — and the effects have been minimal. G7 currencies — the dollar, euro, pound sterling, and yen — still account for approximately 93.7% of allocated global reserves, essentially unchanged from before the freeze. Whatever long-term effects the original immobilization might produce are already being priced in. A structured transfer adds little to what markets have already absorbed.

The reason is straightforward: central banks hold reserves based on economic fundamentals, not political preferences. They need assets that are available at scale, sufficiently liquid, freely floating, and supported by hedging instruments. Those conditions are simply not met outside G7 currencies. China's renminbi, for instance, is constrained by capital controls, opaque governance, and limited liquidity. Russia itself attempted a concerted effort after 2014 to diversify its reserves away from G7 currencies — and despite years of effort, it still found more than $300 billion frozen in Western jurisdictions when the invasion came. If the Central Bank of Russia could not meaningfully reduce its G7 exposure, other central banks face the same structural constraints.

The financial stability concern also rests on a somewhat absolutist premise: that foreign reserves must be inviolable under any circumstances, regardless of whether the owner has committed a war of aggression and owes hundreds of billions in reparations. As former World Bank President Robert Zoellick has noted, countries hold reserves to protect against macroeconomic risks, not so that they can attack their neighbors — and if G7 countries act collectively, as they did when freezing the assets, alternatives simply do not exist. More simply put, transferring Russia's frozen assets would not affect other countries' reserves or change the calculus of governments that are not planning to invade their neighbors.

The Economic Case

Waiting for Russia's voluntary agreement to pay reparations is not a realistic strategy. Russia consistently denies any wrongdoing in Ukraine and has defied the International Court of Justice's March 2022 order to immediately suspend military operations. For over a decade, Russia has shown no indication it intends to comply with its international law obligations arising from its actions in Ukraine. Its strategy is the economic and social ruination of Ukraine — and a policy of indefinite immobilization plays directly into that strategy.

The legal and financial case for acting now is straightforward. Russia's reparations obligation already exceeds the total value of its frozen reserves. Conservative estimates put Ukraine's reconstruction needs at over $588 billion, not including physical and psychological harm to civilians, many of whom have been displaced. The frozen assets, at approximately $300 billion, would not fully cover that figure even if transferred today. Every month of delay widens the gap. Meanwhile, the status quo benefits primarily the financial institutions holding these funds, which have reported extraordinary profits as a result.

The EU's December 2025 decision to indefinitely immobilize Russian state assets — tying their release to Russia's cessation of hostilities and payment of reparations — is, in effect, a decision to compel payment. It is seizure in all but name, without the mechanism to actually deliver the funds to Ukraine.

Reconstruction cannot wait for the end of hostilities. Infrastructure must be rebuilt as it is destroyed to prevent further civilian deaths, maintain Ukraine's economy, and sustain its ability to defend itself. The frozen assets should also be available to fund Ukraine's defense directly because a Ukraine that cannot defend itself cannot be rebuilt. If Russia's assets are not mobilized, G7 taxpayers must either fill the gap themselves or accept the consequences of Ukraine's failure: a failed state in Europe whose costs would far exceed the value of the frozen reserves.

To the extent this sets a precedent, it would be a positive one. Transferring Russian state assets to compensate Ukraine would reinforce the principle that unprovoked wars of aggression carry real material consequences, which would act as a powerful deterrent against future violations of the UN Charter's core prohibition on the use of force against another state's territorial integrity. The concern that it sets a dangerous precedent gets the logic backwards: the dangerous precedent is inaction, which signals to any would-be aggressor that sovereign assets held abroad are safe regardless of what crimes are committed.

In terms of a slippery slope: Russia's conduct is fortunately rare, if not unique, in the modern international order. Its invasion of Ukraine — accompanied by stated war aims that include the destruction of Ukraine as a state and the restoration of imperial-era territorial boundaries — represents a breach of peremptory international norms on a scale not seen since World War II. There is already substantial evidence of this, reflected in decisions by the UN General Assembly, the International Court of Justice, the Council of Europe, and the European Court of Human Rights. The problem is the lack of any enforcement mechanism. Russia's veto on the UN Security Council has neutralized the very body responsible for maintaining international peace and security. Acting through countermeasures is not an arbitrary workaround; it is precisely what the international legal framework is meant for in these circumstances.

Any precedent set here can also be carefully scoped. National and international legislation can be drafted to limit asset transfer to circumstances involving a particularly clear, widespread, and egregious breach of international law, which Russia's aggression unambiguously satisfies. Each state retains discretion over what circumstances would justify such a response in the future. Far from opening a slippery slope, a well-drafted framework would send the opposite message: that there is a high and clearly defined threshold for this kind of action, and that Russia has crossed it. Failing to act, by contrast, would signal that an aggressor can wage a war of conquest, violate international law at scale, and still recover its foreign reserves while those costs fall on the victims and on Western taxpayers.

No. Transferring frozen Russian assets to compensate Ukraine is a lawful economic countermeasure under international law, not an act of war. Under Article 2(4) of the UN Charter and customary international law, an "act of war" involves the use or threat of armed force against another state's territorial integrity or political independence. Financial and economic measures — including asset freezes, sanctions, and asset transfers — are explicitly recognized as non-forcible countermeasures that states may lawfully employ in response to internationally wrongful acts. International law allows third-party states (those not directly parties to the conflict) to take countermeasures in response to serious violations of peremptory norms (jus cogens) — such as aggression and crimes against humanity — particularly when those violations affect the international community as a whole, as recognized by the UN General Assembly in Res. ES-11/5.

Russia itself has engaged in far more aggressive economic measures against European states (energy cutoffs, trade restrictions, seizures of foreign assets in Russia) without those actions constituting acts of war. The transfer enforces Russia's existing obligation under international law to pay reparations, and responds proportionately to its ongoing aggression against Ukraine — the actual war in question.

Russia is already doing this — and has been since well before any decision on frozen sovereign assets. In April 2023, Russia seized power plants owned by Finnish and German companies Fortum and Uniper; in July 2023, it placed Carlsberg and Danone under state control. Since then, the practice has only intensified.

While 547 international companies have fully exited as of January 2026, more than 55% continue to operate, and Russia has continued to seize foreign assets regardless of what Western governments do or don't do with frozen Russian state assets. The pattern is that Russia expropriates when it sees fit, not in response to Western policy decisions.

Companies that remain in Russia do so at their own risk and with full knowledge of the potential consequences. There is no viable path to conducting business in Russia based on rule of law, and companies remaining there contribute, through their taxes, to the Russian war machine. Foreign businesses' direct losses in Russia (from write-offs, seizures, unfair court rulings, and exit taxes) already exceed $170 billion. Companies seeking to protect their interests are far more likely to succeed by challenging illegal Russian expropriation through established international investment tribunals than by attempting to placate the Russian government or opposing lawful measures to hold Russia accountable. Governments should not allow the business decisions of companies that chose to remain in a war economy to constrain their foreign policy obligations.

On reparations: since Russia's debt to Ukraine already exceeds the total value of frozen reserves — Ukraine's reconstruction needs are estimated at over $588 billion, against roughly $300 billion in frozen assets — the frozen funds cannot create meaningful leverage to compel payment. Leverage requires that what you are withholding be worth more to the other side than what they stand to lose. That condition is not met here.

On ceasing hostilities: four years of frozen assets have produced no discernible effect on Russia's war calculus. Russia's total military and security spending in just 2025 was approximately 40% of the entire federal budget (around $440 billion), exceeding the value of its frozen reserves. According to Germany's Federal Intelligence Service, Russia's real defense spending in 2025 was approximately 66% higher than official figures suggested. Russia's total planned military expenditure in 2026 is estimated even higher. It is not rational to assume that Russia will reverse course to potentially recover funds that represent a fraction of what it is spending on this war.

There is also a deeper problem with the "bargaining chip" framing. There is no acceptable scenario in which Russia recovers its assets while Ukraine's victims go uncompensated. Returning the reserves to Russia in exchange for a ceasefire that forecloses reparations would reward aggression, undermine deterrence, and ask G7 taxpayers to cover hundreds of billions in reconstruction costs that should fall on Russia. If the assets are to remain on the table during negotiations, the way to keep them there is to transfer them to an international compensation mechanism — not to hold them indefinitely in the hope that Russia will one day volunteer to pay what it owes.

The honest answer is that the obstacles are political, not legal or financial. The legal case has been made repeatedly, by some of the world's most eminent international law scholars. The economic case has been tested by four years of immobilization with minimal market disruption. What has been lacking is political will.

Several dynamics are at play. First, there is a classic collective action problem: each government is waiting for others to move first, unwilling to absorb any political or reputational risk unilaterally. Belgium, the country holding the largest concentration of assets via Euroclear, has been among the most resistant, pointing to legal exposure and financial stability risks that experts have largely characterized as overstated. The result is a situation where everyone agrees in principle that Russia must pay, but no one is willing to be the first to act on it.

Second, there is an institutional preference for unanimity that has become an excuse for paralysis. In the EU context, decisions of this magnitude require broad consensus among member states with divergent interests, domestic politics, and relationships with Russia. The December 2025 indefinite immobilization decision was itself a significant step, but it still stopped short of the harder question of what to do with the principal.

Third, there is a shortage of political courage. This is, in essence, a version of the bystander effect: when responsibility is diffuse and the costs of action are visible while the costs of inaction are dispersed and slow-moving, individuals and institutions tend to do nothing, assuming someone else will step in. Each government can point to the others and say the problem is not uniquely theirs to solve. Meanwhile, Ukraine bears the consequences of that collective hesitation in real time.

The irony is that the longer Western leaders wait, the harder action becomes. As political fatigue sets in and as peace negotiations introduce new complications, the window for acting from a position of unity and resolve narrows. The legal framework exists. The economic analysis supports it. What remains is the decision to act.

The stated concern: legal and financial risk

Belgium's official position is that transferring frozen Russian assets would expose it to catastrophic litigation by Russia, given that Euroclear — which holds approximately €193 billion in frozen assets — is headquartered in Brussels. These concerns have been substantially addressed by legal analysis: there is virtually no forum in which Russia could successfully bring such a claim. The ICJ lacks jurisdiction, bilateral investment treaties do not cover sovereign-to-sovereign disputes, and any arbitral award in Russia's favor would be unenforceable in EU courts on public policy grounds. This is also a collective EU measure, not a unilateral Belgian decision, and the EU has signaled willingness to indemnify holding states accordingly.

The unstated interest: Belgium profits significantly from the status quo

The current arrangement has been financially lucrative for both Euroclear and Belgium. Euroclear generated €6.9 billion in revenue from frozen Russian assets in 2024 alone. Under the existing framework, Euroclear retains the approximately €5 billion in net windfall profits earned between 2022 and 2024 as a so-called "buffer" against litigation risk — funds it is not required to return even if that litigation never materializes. It can also retain 10% of profits generated after February 2024 as an additional safeguard, plus 3% of proceeds indefinitely. Belgium, meanwhile, levies a 25% corporate tax on Euroclear's income from these assets, generating €1.7 billion in tax revenue in 2024 alone. A detailed accounting suggests that the cumulative amount retained by Euroclear and captured by Belgium since 2022 — rather than directed to Ukraine — may reach €10–11 billion. Belgium has a structural fiscal interest in maintaining the current arrangement.

What Belgium's leaders are actually saying

Belgian Prime Minister Bart de Wever stated that "Russia will not lose, therefore we can't do anything with the assets because the loser pays," and added that Belgium does not want a nuclear state like Russia to lose because it would cause instability. This is legally incorrect. State responsibility under international law does not depend on military outcomes — that logic was superseded by the UN Charter eighty years ago. Reparations flow from wrongful acts, not from who wins a war. Belgium itself voted for the November 2022 UN General Assembly resolution affirming that Russia must pay reparations — unconditionally.

That the leader of a European capital would suggest a nuclear-armed aggressor must not be allowed to lose raises questions about what is actually driving Belgium's resistance, and whether the litigation concerns are serving as cover.

Policymakers have several concrete steps forward.

1. Identify, disclose, and segregate the assets. There is still no comprehensive public accounting of where Russian state assets are held across jurisdictions. Governments must first identify and publicly disclose the assets within their reach — including those held indirectly via Euroclear in non-euro currencies — and require that they be segregated into designated accounts distinct from other funds. This is a prerequisite for everything that follows, and it can be done now without resolving the larger question of final disposition of the assets.
2. Establish a protected international trust structure. European partners and willing states should establish a purpose-built international trust or comparable structure with clear governance, professional management, and full transparency. This structure must expressly protect Belgium, other holding states, and Euroclear through full indemnification, a litigation reserve, and legal safeguards against residual exposure. Removing these institutions' liability to the CBR eliminates the principal rationale for their resistance to action.
3. Transfer the assets into the structure. Participating states should coordinate the gradual transfer of Russian state assets into the trust, preserving servicing of existing ERA loan commitments in the process. Neither segregation nor transfer into a trust has to change ownership of the funds, and neither step constitutes "seizure" or "confiscation." Any potential claims by Russia arose at the moment of indefinite immobilization, not at the point of transfer.
4. Ratify the International Claims Commission. On December 16, 2025, the EU and 35 countries signed the Council of Europe Convention establishing an International Claims Commission for Ukraine. The Convention enters into force after 25 ratifications. Ratification should be an immediate priority — this is the adjudication mechanism that will process compensation claims and channel funds to victims.
5. Use the assets for Ukraine's defense, recovery, compensation, and reconstruction. Ultimately, these assets should fund Ukraine's defense, urgent recovery, reconstruction, and compensation through the emerging international architecture. The ERA loan and windfall profits mechanisms are interim measures — the €90 billion EU loan will be exhausted by 2027, and windfall profits generate only around €3 billion annually. A durable solution requires the principal. The legal framework exists. The institutional architecture is being built. What is needed now is the political decision to use it.

Policy Recommendations