What are frozen assets, and who freezes them? 

Frozen assets are financial funds or property that the owner can not access or use for any transaction or transfer, due to restrictions imposed by a government — or bloc like the EU. 

In Russia's case, both its sovereign assets — in the form of cash, bonds and securities held abroad — as well as private assets such as yachts and real estate owned by sanctioned Russian billionaires, were frozen.

Assets are usually frozen via sanctions.  

"The implementation of the freezes lies with financial institutions," such as commercial banks or central securities depositories (CSDs) which must block transactions and cut off access to frozen assets, Agathe Demarais, Senior fellow at the European Council of Foreign Relations (ECFR), told DW. 

Why were Russian assets frozen? 

Russian assets were frozen as a result of Western sanctions after it invaded Ukraine in 2022. The move was intended to constrain Russia financially and ensure it couldn't use that money to fund the war.

Some experts say the presence of the largest chunk of frozen Russian assets in EU member states offers the bloc key leverage in driving the peace talks in Ukraine's favor. 

Where are Russian assets?

Out of a total of around €300 billion in frozen assets, around €210 billion worth of assets are held under EU Member States' jurisdictions.

The rest are scattered across the US, Japan, the UK, Switzerland, and Canada. 

But the largest chunk, €180 billion, is at an institution called Euroclear in Belgium. 

What is Euroclear, and why is it against the EU using Russia's assets?

Euroclear is a major financial-market infrastructure firm, called a securities depository. 

Euroclear is worried that seizing Russian money will damage its reputation among international investors and could even trigger litigation by Moscow. Russia's central bank has already decided to sue Euroclear for €230 billion — to recover both the frozen money and interest lost. 

Which countries want to use Russia's assets, and for what?

Most European countries including Germany and France want Russia to pay for the damages it has caused by inflicting a war of aggression on Ukraine.

The frozen assets could therefore be used to both strengthen Ukraine's defenses and rebuild the country.

Which countries do not want to use Russia's assets, and why not?

From a legal perspective, using Russian frozen assets is a tricky area and there has been an extensive debate over whether these assets, particularly the principal amount, can legally be used to help Ukraine.

Belgium has vetoed the use of the frozen assets due to fears it may get into legal trouble with Moscow. It is also worried about being on the hook to pay back the amount at a later date if Moscow asks. 

In addition, European heavyweight Italy, as well as Malta and Bulgaria, have asked the EU to look for alternative ways to fund Ukraine's needs. 

What is happening to the frozen assets in the interim?

They remain frozen or as the EU says, immobilised. That means that any transaction, or transfer back to Russia is blocked.

Last year, the EU decided to use windfall profits earned on the assets in Euroclear and paid the first tranche of €1.5 billion to Ukraine mid 2024. 

Where does the US stand on the use of Russia's assets? 

Under President Joe Biden, the US — which holds less than €5 billion of Russian assets — agreed to the use of windfall profits to aid Ukraine. The current Trump administration wants to use a part of the frozen Russian assets toward joint projects with Moscow.

Experts however say the US can only decide what to do with assets lying in its own jurisdiction and not with those in EU countries. 

What does Trump's peace plan say about the frozen assets? 

According to the leaked version of Trump's initial 28-point peace proposal, €86 billion ($100 billion) in frozen Russian assets would be invested in "US-led efforts to rebuild and invest in Ukraine" and the US would receive 50% of the profits. According to Demarais of the ECFR, Trump intends to take that money out of Russian assets frozen in Europe and use that to profit both the US government and US companies.

The rest of the frozen funds, still more than €200 billion, would be invested in a joint US-Russian investment vehicle, "to create a strong incentive not to return to conflict," according to the proposal. For Demarais, however, this would merely benefit Washington and Moscow, but not Ukraine.  

Why has the EU 'indefinitely immobilized' Russian assets?

Originally, the freeze on Russian assets was renewed every six months. And each time it was up for renewal, there was the fear that Hungary's Russia-friendly Prime Minister Viktor Orban could veto the renewal.

The EU's decision to "Indefinitely immobilize" Russian assets achieves two goals: It prevents the need for renewal and hence Hungary's potential veto, but also guards the funds from the US. 

"In essence, it puts the assets out of reach of the US, complicating Trump's plans to transfer the assets to American firms or to a US-Russian investment fund," Demarais explained. "The move also paves the way for the EU to issue a loan to Ukraine." 

Edited by: Andreas Illmer