Newsletter of the main news 25.08/31.08

1️⃣ Frozen Russian Assets

Belgium opposes the confiscation of frozen Russian assets, insisting they should remain in Euroclear until peace talks between Russia and Ukraine are concluded. Prime Minister Alexander De Croo stressed that implementing such a step is “not so simple” from a legal standpoint.

U.S. Treasury Secretary James Bessent argued against the immediate confiscation of frozen Russian assets, calling them a vital leverage point in negotiations with the Kremlin. He also criticized the EU and G7 for failing to impose higher tariffs on India and for continuing imports of oil products derived from Russian crude. According to the U.S. Treasury, sanctions have frozen around $58 billion in assets linked to influential Russians.

Hungary has filed a lawsuit with the EU Court of Justice challenging the decision to provide Ukraine with financial support from frozen Russian assets. Budapest claims it was unlawfully excluded from voting in the European Peace Facility Committee, violating the principle of equality among EU member states. The Hungarian government demands annulment of the Council’s decision and reimbursement of legal costs.

The EU is considering a plan to channel around €200 billion of frozen Russian assets into higher-risk investments with greater returns for Ukraine. This move could serve as a first step toward confiscation as compensation for war damages. Discussions began on August 29 in Copenhagen, with Ursula von der Leyen stressing that the initiative is intended to support Ukraine’s defense and reconstruction. Still, several member states remain opposed to direct confiscation.

Poland expressed readiness to assist the EU in confiscating more than €200 billion of Russian central bank assets frozen at Euroclear. Foreign Minister Radosław Sikorski stated that Warsaw is prepared to “insure” Belgium against potential Russian lawsuits if the assets are unlocked. The issue was on the agenda of the EU foreign ministers’ meeting in Copenhagen, as the bloc currently only transfers profits generated from these assets to Ukraine.

Estonia urged the EU to confiscate over €200 billion of frozen Russian assets and channel them to Ukraine. Foreign Minister Margus Tsahkna emphasized in Copenhagen that there are no legal obstacles, only a lack of political will, and called for a coalition of member states to share the associated risks.

Lithuania called for swift confiscation of frozen Russian assets and their transfer to Ukraine. Foreign Minister Kęstutis Budrys suggested placing the assets — including over €200 billion at Euroclear — into a dedicated mechanism that could also serve as collateral for loans to Ukraine, with repayment tied to future Russian reparations.

Sweden voiced disappointment that the EU has still not agreed on transferring frozen Russian assets to Ukraine. Foreign Minister Maria Malmer Stenergard stressed that this step is essential to increase pressure on Moscow and also urged adoption of the 19th sanctions package and acceleration of Ukraine’s EU accession.

2️⃣ International Sanctions Policy

Russia’s space sector is collapsing: the iconic Energia Corporation admitted to massive debts, workforce demotivation, and the risk of closure, while private company SR Space declared bankruptcy. Sanctions have cut Moscow off from Western technologies and international contracts, nearly halting foreign launches. With resources redirected to the war effort, Russia’s image as a “space superpower” is rapidly disintegrating.

The U.S. has activated record-high tariffs on India due to its imports of Russian oil: over 55% of Indian exports to the U.S. are now subject to the highest duties in Asia. The measures hit textiles and jewelry hardest, while sparing electronics and pharmaceuticals. This marks a sharp deterioration in U.S.–India relations and undermines New Delhi’s export competitiveness.

Washington has, for the sixth time, postponed sanctions on Serbia’s oil and gas monopoly NIS, majority-owned by Gazprom. The company runs Serbia’s only refinery in Pančevo, vital to national supply. The delay avoids potential disruptions to crude shipments via Croatia’s Janaf pipeline, while Belgrade continues lobbying for NIS to be removed from the U.S. sanctions list.

EU foreign ministers are preparing to discuss secondary sanctions against Russia at their meeting in Copenhagen. The mechanism, adopted in 2023 but never used, allows the EU to ban exports to third countries suspected of helping Moscow evade restrictions. The talks coincide with the drafting of the 19th sanctions package, which will target individuals linked to the deportation of Ukrainian children and may add further restrictions on Russia’s energy and financial sectors.

The U.S. has temporarily authorized imports of certain Russian-origin diamonds despite sanctions. Until September 1, 2026, stones of one carat (if outside Russia before March 2024) and half a carat (if outside before September 2024) may enter the U.S. market. However, the ban on non-industrial Russian diamonds remains in force.

Denmark, currently holding the EU presidency, is pushing for sanctions on Russian cryptocurrency transactions to cut off another channel of war financing. The proposal also includes tougher restrictions on oil and gas revenues and Russia’s financial sector, where crypto has been increasingly used for cross-border trade amid limited access to traditional systems.

3️⃣ Sanctions Violations and Evasion

Austria’s central bank sees no grounds for action against Raiffeisen despite allegations of sanctions breaches. Investigations into its Russian subsidiary’s purchase of government bonds concluded with “no need for further measures.” Meanwhile, Raiffeisen’s Russian operations generated the highest profits of any Western bank in Russia in 2024, and the subsidiary’s financial reports have disappeared from public access.

An Estonian court convicted dual citizen Erna Moisseyeva of spying for Russia’s FSB and attempting to breach sanctions. She collected intelligence on Estonia for Moscow and twice tried to smuggle luxury goods — wines worth over €300 — into Russia. She was sentenced to three years in prison and ordered to pay €3,100 in legal costs; the ruling has not yet entered into force.

Foreign companies paid at least $20 billion in taxes to Russia in 2024 despite international calls to exit the market. Since the start of the full-scale invasion, their total tax contributions have exceeded $60 billion — roughly half of Russia’s 2025 military budget. Major taxpayers included Raiffeisen Bank ($402M), Chery Automobile ($222M), Philip Morris ($220M), Japan Tobacco International ($182M), and Leroy Merlin ($128M). Analysts warn that such financial flows directly bankroll Russia’s war machine and undermine Ukraine’s security.