How the EU tries to secure frozen Russian assets and the risks Trump poses
Trump's silence about Ukraine in his inaugural speech is not just a political fact. Over the past year, while using loud rhetoric about the need for peace negotiations, the new-old US president has avoided addressing other sensitive topics related to Ukraine.
One such topic, which he has not yet directly addressed, is the fate of the frozen reserves of the Russian Central Bank.
The risk of failing to extend sanctions and the de facto return of Russia's frozen assets seemed increasingly likely. Brussels had to urgently seek a safeguard against this scenario.
Read more more about what might happen to Russia's frozen assets under Donald Trump in the article by Ivan Horodysky, Director of the Dnistryanskyi Center – Protection from Orbán: how Trump "suspended" the future of Russian assets and what the EU plans to do
After the election of the new US president, the issue of asset confiscation received less attention in the rumours surrounding negotiations than topics like the deployment of peacekeepers in Ukraine or territorial debates. However, by early 2025, reports emerged suggesting that the Biden administration might move to confiscate frozen Russian assets before the end of its term.
Although these plans never came to fruition, some details that emerged in the media could later become part of the Trump administration's strategy.
According to these reports, the United States would need to seize Russian sovereign assets simultaneously with the European Union and other allies. These funds would then be transferred to a special "escrow account" – an account in which funds can only be returned to the owner under specific conditions. The assets would remain blocked until an agreement is reached to end Russian aggression against Ukraine.
What happens next – whether the money is returned to Moscow or transferred to Ukraine – remains unspecified.
This approach though aligns seamlessly with Trump's style of thinking, where money – especially when it involves hundreds of billions of US dollars – becomes both a lever of pressure and a key bargaining chip in future negotiations.
To implement this strategy, the new White House team would need to secure the support of the European Union or, at the very least, advance this initiative with the help of its long-standing ally, Hungarian Prime Minister Viktor Orban.
EU sanctions against Russia, including the freezing of Central Bank reserves, are not indefinite. They must be renewed every six months with unanimous approval from all member states.
Hungary has repeatedly leveraged the issue of sanction extensions to advance its own interests.
Therefore the EU began to look for a plan "B", which was found in the form of... the prerogatives of the Belgian King Philippe I. In 1944, according to a special decree, the Belgian monarch was granted the ability to block the withdrawal of assets from the country.
Although on the evening of 21 January, Radio Liberty's Brussels correspondent Rikard Jozwiak reported that EU sanctions would most likely be extended in coordination with the new US government, the possibility of using the option of a royal decree remains a realistic alternative.
The proposal to transfer frozen Russian assets to an "escrow account" remains underdeveloped; for instance, it is unclear how the $50 billion "reparations loan" would be repaid.
At this stage, however, this scenario does not appear to be the most favourable option for Ukraine.
In fact, the formula that our allies have repeatedly repeated: "Russian assets will remain frozen until Russia compensates Ukraine for the damage caused" may change to "until Russia concludes a peace agreement."
Undoubtedly, the fate of these assets will become a key bargaining tool in future negotiations. The task for the Ukrainian government is to ensure that this lever is wielded to prioritise Ukraine’s interests and those of individuals affected by Russian aggression.