EU officials mull using sanctioned Russians' assets for Ukraine

[LONDON] European Union (EU) officials are discussing the possibility of using the assets of sanctioned Russian tycoons to help fund Ukraine's war recovery efforts, according to 3 people familiar with the matter.

The idea is at a very early stage and no decision has been taken, the people said. One possibility would be to use the assets to fund war reparations, the people added. Any decision over how to handle the assets would ultimately need to be made by member states.

"At this point the assets are only frozen," said Eric Mamer, spokesman for European Commission President Ursula von der Leyen, when asked for comment. "The president has not asked for this to be explored."

Since Russia's invasion of Ukraine last month, the EU has sanctioned dozens of Russian tycoons, including some of the country's wealthiest billionaires.

Following the adoption of the penalties, several member states have immobilised assets such as superyachts, private jets and properties. Italy alone has frozen about 780 million euros (S$1.17 billion) worth of assets, government releases show.

The current sanctions regime allows for assets to be frozen and the EU announced on Thursday (Mar 17) it was creating a "Freeze and Seize" task force to share information among member states in order to better implement the measures.

According to a statement released by the bloc's executive arm to announce the initiative, the task force "aims to go one step further: It will coordinate actions by member states to seize and, where the national law calls for it, confiscate assets of the listed Russian and Belarusian oligarchs."

In addition to the European task force, the EU will also work with Group of Seven countries, including the US, and Australia, on Repo - the "Russian Elites, Proxies and Oligarchs" task force - to coordinate efforts to identify the assets of those individuals and entities sanctioned in connection with Russia's invasion of Ukraine and take "legal steps to find, restrain, freeze, seize, and, where appropriate, confiscate or forfeit" their assets, according to the press release.

The discussion comes amid growing concern about Ukraine's ability to sustain its military operations and provide services to its citizens, particularly since its ability to issue bonds on the international market is significantly limited.

Separately, European Council President Charles Michel announced on Friday that he spoke with Ukrainian President Volodymyr Zelenskiy about the possibility of creating a Ukraine Solidarity Fund.

Such a mechanism would provide short-term liquidity for the country's defence efforts and basic services, as well as to pay for longer-term investments to reconstruct the economy, another official said. Michel said partners could contribute through an international donors conference. BLOOMBERG