Thread by @Mylovanov

A step toward victory for Ukraine and a failure for Russia.

The EU has agreed to use Russia's frozen assets to fund weapons and aid for Ukraine

The opposition from Hungary, etc to fund weapons's been overcome. Their "share" will fund humanitarian aid 1/

The deal involves using the estimated €4.4bn windfall profits from €191bn of Russian Central Bank assets held by Euroclear in Brussels. 2/ .reuters.com/world/europe/e…

Belgium, where most of the assets are held, has agreed to consider transferring the collected taxes to Ukraine from 2025. It initially benefited from a 25% tax on the profits. 3/

90% of the funds will go towards weapons for Ukraine, while 10% will be used for non-lethal aid to accommodate EU member states that do not wish to fund arms 4/

The agreement opens broader discussions within the G7 about using Russia's frozen assets - including the body of the assets. Some European nations remain cautious about potential violations of international law 5/

The G7 countries froze and hold around $300 billion worth of Russian financial assets shortly after the 2022 invasion of Ukraine 6/

The U.S. has proposed seizing the assets entirely, but Europe has been hesitant due to risks to the euro and potential legal repercussions. Washington has more recently pushed for using the assets as collateral for loans to Ukraine. 7/

Russian officials have threatened severe responses and endless legal challenges if the assets are touched. Screw them! 8/

The EU estimates that windfall profits from the assets held in the bloc will total between 15 billion and 20 billion euros by 2027, including around 3 billion euros this year 9/

Belgium's securities settlement house Euroclear handles the majority of the immobilized assets in the EU. Euroclear's management fee will be reduced from 3% to 0.3% to free up more cash for Ukraine. 10/

To put this in perspective, as of Q1 2024, Euroclear Bank's balance sheet totaled 199 billion euros, with 159 billion euros related to Russian assets. 11/

Belgium is separately collecting tax on the profits from Euroclear, which is set aside for Ukraine. For the fiscal year 2024, Belgium expects to receive 1.7 billion euros, with most already allocated for Ukraine's military 12/

In some ways, the US is more aggressive wrt to Russian assets. The U.S. Congress adopted the REPO Act on April 23, 2024, which authorizes the confiscation of Russian sovereign assets to fund Ukraine's reconstruction 13/ kse.ua/about-the-scho…

The REPO Act removes legal ambiguity around confiscation at the national level and articulates that confiscation represents countermeasures under international law. It grants the President necessary powers while circumventing sovereign immunity issues. 14/

In addition, G-7 Eyes Plan on US-Led $50 Billion Aid Package for Ukraine. Plan would use profits from frozen Russian assets to repay aidLeaders from the G-7 countries will meet in Italy in June 15/ bloomberg.com/news/articles/…

The U.S. is in talks with G-7 partners to lead a group of allies to provide up to $50 billion in aid to Ukraine, which would be repaid using the profits from frozen Russian sovereign assets, mostly held in Europe. 16/

What are the Legal Grounds for Seizure of Russian Assets for Reconstruction of Ukraine? 17/

kse.ua/about-the-scho…

As of January 2024, direct damages from the war have reached $155 billion and continue to rise, leading to discussions about confiscating Russian assets for Ukraine's reconstruction 18/

The KSE argues that confiscation of Russian assets is lawful as a countermeasure under public international law, designed to address situations like Russia's aggression against Ukraine when UN Security Council resolutions are not available due to Russia's veto power. 19/

KSE report addresses Russia's abuse of its UN Security Council veto powers, its noncompliance with international court decisions, and amendments to its constitution that institutionalize defiance of international law 20/ kse.ua/about-the-scho…

The report clarifies that sovereign immunity concerns are erroneous, as the principle is procedural and applied only in the context of litigation 21/

Russia has adopted regulations leading to the effective expropriation of Western investors' assets in Russia, even though G7 governments stated that seizing CBR reserves was off the table. 22/

Democratic countries can stay within the bounds of the law while holding Russia accountable by entering into a binding multilateral treaty regarding the treatment of Russian assets to restore international peace and security. 23X kse.ua/wp-content/upl…