European Union flags fly outside European Commission headquarters in Brussels in March 2023.

European Union flags fly outside European Commission headquarters in Brussels in March 2023. (Johanna Geron/Reuters)

BRUSSELS — EU countries have formally adopted a plan to use windfall profits from Russian central bank assets frozen in the EU for Ukraine’s defense, Belgium’s government said Tuesday.

The text only needed a rubber-stamp by ministers after EU ambassadors reached the agreement in early May. Russia has repeatedly warned the West of consequences if its assets are touched and accused Washington of bullying Europe to take more radical steps to thwart it in Ukraine.

Under the agreement, 90% of the proceeds will go into an EU-run fund for military aid for Ukraine against Russia’s invasion, with the other 10% going to support Kyiv in other ways.

The EU expects the assets to yield about $16.30-$21.70 billion in profits by 2027. The assets are gaining exceptional interest, resulting in so-called windfall profits. Ukraine is expected to receive the first tranche in July, EU diplomats said.

The Group of Seven countries (G7) froze around $300 billion worth of Russian financial assets soon after Moscow’s invasion of Ukraine in 2022. Since then, the EU and other G7 countries have debated how and whether to use the funds to help Ukraine.

Ukraine Foreign Minister Dmytro Kuleba thanked the EU for the decision on Tuesday but reiterated Ukraine’s ultimate goal of seizing Russian financial assets, not just benefiting from interest.

“With all our gratitude for this decision today, the amounts are not commensurate (with the amount of frozen assets),” Kuleba told reporters.

“That is why the third step, which we have been talking about since the beginning of the year, should actually be the confiscation of the assets themselves,” he added.

U.S. Treasury Secretary Janet Yellen is pushing fellow G7 nations this week to agree a plan to use the profits as collateral to back a larger loan to help Ukraine.

Reporting by Julia Payne, Yuliia Dysa, and Anastasiia Malenko.

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