Newsletter of the main news 10.03/16.03

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Date

16 Mar 2025

1️⃣ Frozen Russian assets

British Foreign Secretary David Lammy has said that he will make every effort to unlock the £2.3bn received from the sale of Chelsea so that the money can finally be sent to Ukraine. For two years now, they have remained in the account of a special trust, and negotiations on their use have been delayed. Lammey stressed that he was frustrated by the delay and was moving to an ‘action-oriented approach’ to move the situation forward. The options include a lawsuit or an agreement with a fund to manage the money. At the same time, the government insists that the money should remain in Ukraine, while representatives of the fund suggest using it to support Ukrainian refugees abroad.

The French parliament passed a resolution in support of Ukraine and called for the seizure of frozen Russian assets to finance military aid and rebuild the country. The document was supported by 288 deputies, while 54 were against and the far right abstained. Although the resolution is symbolic, its authors hope to influence the position of the government, which has not yet supported the seizure of Russian assets. The MPs also called on the EU to increase military and economic assistance to Ukraine, stop importing Russian gas, and consider deploying a European peacekeeping force if a peace agreement is reached.

Ukraine received the first tranche of frozen Russian assets in Canada, which will be used for the priority needs of the state budget. Prime Minister Denys Shmyhal said that this payment is part of the Extraordinary Revenue Acceleration initiative, under which Canada has allocated a total of CAD 5 billion to Ukraine. This is the first time that the proceeds from blocked Russian assets have been used to provide financial support to Ukraine.

The Ukrainian government held the first meeting of the Interagency Working Group on the use of frozen Russian assets for the benefit of Ukraine. Prime Minister Denys Shmyhal stressed that the work is aimed at ensuring fair compensation for the damage caused, as well as cooperation with international partners to confiscate Russian assets. The group includes government officials, representatives of the NBU and financial services. Shmygal thanked the allies for their support and reminded them that Ukraine's losses are estimated at $524 billion, while the West has frozen about $300 billion of Russian assets, which Kyiv insists on using to rebuild the country.

The frozen Russian assets are not just sitting idle, but are generating profits that are already being used to service loans granted to Ukraine by the G7 countries. The Belgian ambassador explained that the ‘immobilised’ assets of the Central Bank of the Russian Federation have a different legal status from frozen private assets and play an important role in financial support for Ukraine. He stressed that the preservation of these assets is strategically important, as they could become a key tool in future reparations negotiations with Russia. At the same time, the diplomat warned that their confiscation could create financial and legal risks for the international system.

2️⃣ International sanctions policy

EU ambassadors agreed to extend sanctions against Russia for another six months, until 15 September 2025. An EU official refrained from disclosing the details of the decision, but confirmed that four people had been removed from the sanctions list, and three more due to death. At the same time, Russian businessman Mikhail Fridman remains under restrictions, while Rashevsky, Ismailova, Kantor and Degtyarev were removed from the list as a result of a compromise agreement.

The administration of US President Donald Trump imposes tougher sanctions on Russia, restricting its access to US payment systems. The Treasury Department has cancelled a licence that allowed certain transactions by sanctioned Russian banks, making it difficult for them to conduct large financial transactions, particularly in the energy sector. The restrictions include Sberbank, VTB, Alfa-Bank and the Central Bank of Russia. Analysts expect that the new sanctions could lead to a rise in oil prices, and their political motive is to put pressure on Moscow to agree to a 30-day ceasefire in the war against Ukraine.

The G7 countries have warned Russia of possible increased sanctions if it refuses to cease fire in the war against Ukraine. In the statement, the leaders stressed the importance of reliable security arrangements that will guarantee compliance with the ceasefire. Moscow must meet Kyiv halfway and agree to an equal cessation of hostilities, otherwise it will face new restrictions. The draft statement, approved by senior diplomats, still needs final approval by ministers. The G7 also stressed that the ceasefire must be accompanied by credible guarantees so that Ukraine can defend itself against future aggression.

British Prime Minister Keir Starmer named two key instruments of pressure on Russia that could force it to the negotiating table. The first is to build up Ukraine's military capabilities, for which new commitments have already been proposed. The second is to strengthen sanctions, including expanding restrictions and discussing the possibility of using frozen Russian assets. Starmer acknowledged that the issue of assets is complex, so London is also considering alternative sanctions measures that are not directly related to the confiscation of these funds.

3️⃣ Violation and circumvention of sanctions

The Danish government has introduced a bill to criminalise the violation of EU sanctions, in particular against Russia and Belarus. The document toughens penalties for individuals and companies that circumvent the restrictions, with a maximum prison term of 8 years. Justice Minister Peter Hummelgaard stressed that Denmark is committed to the effective implementation of sanctions and proposes stricter measures than the EU's minimum requirements.

Russia has begun using cryptocurrencies to trade oil with India and China, using bitcoin, ether and stablecoins such as Tether to convert yuan and rupee into rubles. This is still a small but growing part of Russia's total oil exports, which reached $192bn last year. According to the sources, the scheme involves payment through offshore accounts, subsequent conversion to cryptocurrency and transfer of funds to Russia. This strategy has already been used by Iran and Venezuela to circumvent sanctions. Analysts predict that cryptocurrencies will continue to be a tool in the Russian oil trade, even if sanctions are eased.

A woman was arrested in Germany on suspicion of circumventing sanctions against Russia. She is accused of facilitating the illegal export of 192 cars to Russia for a total of about €21.4 million. The authorities see this scheme as a violation of economic restrictions imposed on Moscow and continue to investigate possible accomplices.

Two former Siemens executives are to be tried in Germany for violating sanctions by exporting gas turbines to occupied Crimea. The Hamburg Land Court has decided to initiate criminal proceedings, while the cases against three other defendants have been dismissed. Siemens confirmed that these individuals no longer work for the company and stressed that the case does not concern the concern itself. The turbines were delivered to Crimea in 2017, despite EU and US sanctions banning the supply of energy equipment to the annexed peninsula.

Latvia's State Security Service (VDD) has asked the prosecutor's office to initiate criminal proceedings against four people for supplying portable satellite internet kits to the Russian army in violation of EU sanctions. The accused include a citizen of Azerbaijan, two Latvian citizens and one Latvian non-citizen. The investigation revealed that they had ordered and transferred dozens of Starlink Mini devices to Russia, which are banned for delivery to Russia. The criminal case was initiated on 9 October 2024, and the suspects are currently under arrest.

4️⃣ Sanctions policy of Ukraine

The Ministry of Justice of Ukraine initiated a lawsuit to confiscate the assets of the Belarusian company Belaruskali in favour of the state. The Ministry of Justice filed a lawsuit to impose sanctions under the law, which provides for the seizure of corporate rights, funds, railway cars and potash fertilisers belonging to the sanctioned company. "Belaruskali is accused of financially supporting the war against Ukraine through its cooperation with Russian military-industrial enterprises and occupation administrations. The company is also accused of facilitating the forced deportation of Ukrainian children to Belarus and supporting the policies of the aggressor state.

The Ministry of Justice of Ukraine has filed a lawsuit with the HACC regarding the nationalisation of the assets of a Russian aluminium company worth over UAH 2 billion. The assets in question are more than 440,000 tonnes of bauxite and 110,000 tonnes of metallurgical alumina owned by the sanctioned company. The investigation found that the company is a supplier of raw materials to Russian defence companies that produce military equipment, weapons and ammunition for the Russian army. The pre-trial investigation in this case is being conducted by the SBU as part of the proceedings on financing actions aimed at undermining the constitutional order of Ukraine.