Ukraine’s allies plan to direct frozen Russian assets to help Ukraine without their immediate confiscation.

According to a plan proposed by Belgium, the allies could issue debt obligations to finance Ukraine’s needs, using the assets of the Russian Federation as collateral to guarantee repayment of the debt.

According to FT, in this case, the coalition of countries supporting Ukraine will demand that the Russian Federation pay the debt, and if it does not, it will seize the frozen assets. Currently, this is the leading option for unlocking these frozen funds for Ukraine’s benefit. This plan is designed to allow the G7 to raise funds for Ukraine without immediately resolving legal issues regarding other countries’ grounds for seizing Russian sovereign assets.

At the same time, although the EU countries recently approved new rules that facilitate the transfer to Ukraine of interest income from Russian assets stored in the Euroclear international depository, the new legislation does not apply to the income from 2023 but only to amounts accumulated after the entry into force of the new rules.