The European Council has adopted a regulation concerning the obligations of CSDs holding assets and reserves of the Central Bank of Russia (CBR). Under this regulation, CSDs holding more than one million Euros in CBR assets are required to account the assets, which have been frozen due to EU restrictive measures in response to the Ukraine war, separately. The CSDs must also keep corresponding revenues separate, and are prohibited from disposing of the ensuing net profits.

The debate on how these funds can be used is a long running one. According to a press release from the European Council, about €260 billion in CBR assets have been immobilised in the jurisdictions of the Group of seven nations (G7), the EU, and Australia, More than two thirds of the immobilised assets are in the EU.

In consideration of the risks and costs involved in holding assets of the CBR, each CSD “may request its supervisory authority to authorise a release of a share of those net profits in view of complying with statutory capital and risk management requirements”.

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The council stated that the regulation is a first step in establishing a financial contribution to the EU budget that can be used to support Ukraine and its recovery and reconstruction.