Confiscated funds will be transferred directly to Estonia and further allocated to Ukraine through a project to accelerate damage assessment and critical repairs of the Ukrainian electricity system.
The US Department of Justice reported confiscating these funds after discovering an illegal procurement network that tried to import high-precision American-made machines into Russia. This is the first transfer of funds from the US to a foreign ally with the direct purpose of helping Ukraine and the second transfer since the KleptoCapture task force of the US Department of Justice seized $5.4M of Russian assets to support Ukrainian veterans.
At the same time, Euroclear, the international depository, does not support the use of the Russian Federation’s frozen assets as collateral for issuing debt obligations for Ukraine. It says the G7 plan is “pretty close to an indirect seizure” of assets and threatens legal action. However, Euroclear favors using earnings from these assets, as the funds legally belong to the institution.