Russia’s Central Bank plans to challenge use of assets to support Ukraine in EU Court / The New Voice of Ukraine

Russian dictator Vladimir Putin and Elvira Nabiullina, head of the Central Bank of the Russian Federation (Photo: DR)

“The Bank of Russia is challenging an EU regulation that treats the Bank of Russia’s sovereign assets as a form of financial support for a third country,” the regulator said.

The lawsuit, filed in the Luxembourg-based court, targets Regulation (EU) 2026/467 adopted on Feb. 24, 2026.

“The appeal concerns the legal and financial mechanism established by the aforementioned European Union act to provide support to Ukraine in 2026–2027,” the central bank stated.

“The Regulation allows for the interpretation that Ukraine’s repayment of the loan provided to it will be carried out at the expense of the Bank of Russia’s assets, which is an illegal and covert form of using assets as collateral for the loan and/or the subsequent legalization of the expropriation of sovereign assets. The contested EU Regulation, in terms of its content and legal consequences, goes beyond the scope of ordinary measures of financial and economic cooperation with a third country. The disputed mechanism treats the sovereign assets of the Bank of Russia as an element of financial support for a third state, altering the legal and economic regime of sovereign assets, and thereby violates the norms of European Union law, fundamental rights, and applicable principles of international law, including the immunity of states and their central banks.”

As part of the EU sanctions imposed in response to Russia’s invasion of Ukraine, the European Union and its member states have adopted several packages of restrictive measures.

The assets in question were frozen by the EU as part of sanctions. The ban on transactions involving the assets and reserves of the Central Bank of Russia and its affiliates leads to the accumulation of cash and deposits on the CSD’s balance sheet from maturing financial instruments and generates income.

In February 2024, the Council of the EU decided that central securities depositories holding assets and reserves of the Central Bank of Russia worth more than €1 million, which have been frozen as a result of EU sanctions, must maintain emergency cash reserves accumulated as a result of EU sanctions, and may not dispose of the net proceeds generated by operators within the EU.

In 2024, the EU Council adopted a series of legal acts allowing these net proceeds to be used for the benefit of Ukraine.

On March 31, 2026, EU High Representative for Foreign Affairs and Security Policy Kaja Kallas announced that the EU is providing Ukraine with €80 million ($93 million) from the proceeds of frozen Russian assets.

In April 2026, it was reported that the European Union had earned €1.4 billion ($1.6 billion) in interest on cash balances derived from frozen assets of the Central Bank of Russia (CBR) held in central securities depositories (CSDs).

On May 21, 2026, the Court of Justice of the European Union ruled that trust assets may be frozen if sanctioned individuals can effectively influence or use those funds, even without formal ownership.

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