EU Commission presents new sanctions renewal options for frozen Russian assets

It aims to ensure continued sanctions support and secure financial aid for Ukraine

A person walks by the logo of the European Commission near its entrance in Brussels, Belgium, February 1, 2023. REUTERS

The European Commission has presented to EU ambassadors three new options to extend the sanctions renewal period covering Russia's central bank assets, crucial to securing a $50 billion G7 loan for Ukraine, EU diplomats said on Friday.

Leaders of the Group of Seven major democracies and the EU agreed in June to use the interest on frozen Russian assets to underpin a $50 billion loan for Ukraine to help it defend itself against Moscow's full-scale invasion.

The assets held by G7 members amount to some $300 billion, with most of that held in Europe by Belgium's securities depository Euroclear.

In order to secure the loan, the G7 wants to be sure the EU sanctions regime on the assets is not lifted. EU sanctions on Russia must be renewed with unanimity every 6 months, but renewals have sometimes been used as a bargaining opportunity for member states and Hungary's leader Viktor Orban has held up funding and legislation designed to help Ukraine in the past.

The renewal options were presented to ambassadors on Friday. These include a five-year freeze on the assets with a review every 12 months and a qualified majority of EU countries needed to unfreeze the assets.

The second option is a renewal of the asset freeze every 36 months with a unanimous vote, they said. The third option would be to extend the renewal period for all sanctions related to Russia to 36 months. Currently, the EU's sanctions on Russia are up for renewal every six months.

A Commission spokesperson declined to comment on the details of the options presented.