Sanctions — 2026-09-06

Ukraine Proposes Shifting Frozen Russian Assets from Belgian Euroclear to EU Custody to Unlock Reparations Loan

BLUFBelgium's veto and Commission inaction make EU adoption of Ukraine's proposed asset-custody transfer very unlikely by end of 2026, leaving Kyiv's funding gap unresolved well before the 2027 horizon Brussels claims is adequate.

Ukrainian Finance Minister Sergii Marchenko told Euronews that Kyiv has proposed transferring custodianship of roughly €200-210 billion in immobilised Russian central-bank assets from Belgium's Euroclear depository to an EU-controlled custodian, arguing this would make legal exposure "the joint responsibility of the 27" rather than Belgium's alone 123. Belgian Foreign Minister Maxime Prévot restated Belgium's opposition this week, saying "the reasons behind our opposition have not magically disappeared" and warning that using the assets "through a process amounting to confiscation would entail very significant risks" 1. Sweden, the Netherlands, Poland and Spain have pressed the European Commission to reopen the stalled "reparations loan" plan, which collapsed in December after Belgian objections and was replaced by a jointly financed €90 billion facility 34. Marchenko said Ukraine faces a funding shortfall of $32.6 billion and is preparing for the war to continue into 2027 35. The Commission has not adopted the custodian proposal and maintains the €90 billion loan should cover Kyiv's needs through 2027 2.

Analysis
Belgium's unmoved veto and the Commission's refusal to endorse Marchenko's custodian plan make EU adoption of the transfer very unlikely through December 31, 2026, and even a shift to EU-owned custody would still require separate legal authority to deploy the principal against a loan, pushing any reparations mechanism past this window. Reporting traces almost entirely to a single Euronews interview, with outlets republishing rather than independently confirming the mechanism, so moderate confidence rests on consistent messaging rather than corroboration or drafting movement. Where prior reporting showed only a four-minister push for Commission staff to explore options, Kyiv has now floated a concrete transfer mechanism, prompting Belgium's explicit restatement of opposition. Marchenko's proposal may function more as leverage to keep the reparations-loan debate alive ahead of 2027 IMF budget talks than as a serious legal blueprint, meaning Kyiv likely must seek bilateral or IMF bridge funding to cover the $32.6 billion shortfall within the existing €90 billion facility.

7 sources

Could an EU custodian break the long deadlock on the Russian assets? - Euronews
Kyiv to EU: 'Think outside the box' on Russia's frozen assets - Euronews
Ukraine proposes shifting frozen Russian assets from Belgian to EU custody - EU Today
EU States Push to Revive Russian-Asset 'Reparations Loan' for Ukraine - Kyiv Post
Ukraine Pushes EU Talks on Use of Russian Frozen Assets for Budget Aid - Global Banking & Finance Review
Ukraine proposes shifting frozen Russian assets from Belgian to EU custody - Bytes Europe
EU Custodian Could Break Russian Asset Deadlock - Newsy Today