UK Plans to Use Frozen Russian Assets to Support Ukraine’s War Effort

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What are “frozen Russian assets”

  • Following Russia’s invasion of Ukraine in February 2022, the UK (alongside its allies) imposed sanctions that resulted in Russian state-assets, oligarchs’ assets, and related entities being frozen in UK jurisdictions. (GOV.UK)
  • According to the UK government’s reports, £25 billion worth of Russian assets had been frozen by the UK as of March 2024 under its sanctions regime. (GOV.UK)
  • In addition, the UK has helped freeze more than £48 billion globally (via allied enforcement) under the actions of the Russian Elites, Oligarchs, and Proxies Task Force. Within that, the UK has frozen over £18 billion belonging to Russian entities. (GOV.UK)

What the UK is planning / doing with those assets

The UK’s approach is more nuanced than simply seizing all frozen assets. The plan involves several mechanisms and legal tools. Some are already in use, others are proposals or still under negotiation.

Already in use

  1. Extraordinary Revenue Acceleration (ERA) scheme
    • The UK is using interest or profits generated by frozen Russian assets (not the principal frozen sums themselves) to fund military aid for Ukraine. (UK Defence Journal)
    • For example, UK Prime Minister Keir Starmer announced a £70 million aid package using interest from frozen Russian assets, which includes 350 air-defense missiles. (Ukrainian World Congress)
  2. Loan agreement to Ukraine
    • On 1 March 2025, the UK signed an agreement to provide Ukraine with a £2.26 billion loan, part of a G7-backed package (the ERA initiative). This loan is to be repaid (at least in part) using proceeds from frozen Russian sovereign assets. (The Independent)
    • The UK delivered the first tranche of £752 million from this loan by 7 March 2025. Subsequent tranches are planned. (Kyiv Post)
  3. Legal reforms and proposals
    • The UK is changing parts of its sanctions legislation so that sanctions are maintained until Russia agrees to pay compensation, rather than merely for purposes like protecting Ukraine’s territorial integrity. (The Guardian)
    • Also introduced are requirements for designated persons (those whose assets are frozen) to disclose all assets held in the UK; failure to do so may lead to fines or seizure. (The Guardian)

Proposed / under consideration

  • There is talk (among UK, EU, and G7 countries) of using not just the interest on frozen assets, but broader mechanisms involving frozen sovereign assets, to fund Ukraine’s war effort and reconstruction. (Reuters)
  • Proposals include a fund or foundation to manage/distribute parts of the frozen assets for the long term—particularly for reconstruction of Ukraine. (The Independent)

Legal, Diplomatic & Practical Constraints

Using frozen foreign state assets (or profits therefrom) to fund war efforts is complex—legally, diplomatically, and operationally. Here are the key constraints and issues:

  1. Sovereign immunity and international law
    • Assets belonging to a foreign state are usually protected under principles of sovereign immunity. Unilateral seizure or “forfeiture” could prompt legal challenges. (The Guardian)
    • The UK has tried to navigate this by not (yet) completely seizing state assets, but using profits and imposing compensation conditions / legal frameworks that make disposals contingent and in compliance with international legal norms. (The Guardian)
  2. Precedent risks and diplomatic backlash
    • If the UK proceeds aggressively, it risks setting precedents for other countries to seize foreign state assets. This could provoke retaliation or harm foreign investor confidence. Russia has already condemned UK plans as “criminal act” when assets are used for Ukraine’s military purchases. (Anadolu Ajansı)
    • Diplomatic diplomacy will be needed, especially with other allies (EU, G7) to coordinate so the legal risk is shared and the approach is consistent.
  3. What can be legally used: interest vs principal
    • A key distinction is between using profits/interest generated by the frozen assets vs using the frozen principal itself. The UK’s current schemes tend to focus on interest/profits, which is legally safer. (UK Defence Journal)
    • Using or selling (disposing of) the principal is more controversial and legally exposed.
  4. Timing and logistics
    • It takes time for frozen assets to generate usable interest; proceeds may be delayed. Also, freezing is not the same as liquid control—some frozen assets may be tied up in complex structures, subject to legal appeals, etc.
    • Loans need to be arranged, disbursed, and accounted for. The UK loan to Ukraine in the ERA scheme is being done in tranches. (The Independent)

Key Figures & Recent Actions

Item Amount / Detail What It’s Financing / Used For
£25 billion Value of Russian assets frozen in the UK (as of March 2024). (GOV.UK) General sanctions; potential reservoir for generating interest / proceeds.
£2.26 billion UK loan to Ukraine under ERA scheme. (The Independent) Military-related expenditures (air defense, equipment, repairs etc.).
£70 million Aid package funded by profits from frozen Russian assets. (Ukrainian World Congress) Includes 350 ASRAAM missiles adapted for ground launch; part of air defence capability.
First tranche of £752 million Delivered to Ukraine under the UK loan. (Kyiv Post) To support Ukraine’s state budget / defense priority needs.

Strategic & Political Motivations

  • Send a signal of resolve / deterrence: Using Russian assets shifts some cost of war onto Russia, demonstrating punitive and leverage-based policy.
  • Augment support for Ukraine: As Western domestic pressures and budget constraints increase, finding “extra” sources of support helps sustain military aid.
  • Encourage negotiations and accountability: Some proposals tie the use of frozen assets to war reparations or compensation, adding pressure on Moscow. (The Guardian)
  • Solidarity with allies: Coordinated efforts (UK, France, Germany, EU, G7) are aimed at ensuring that this approach has broader legitimacy and shared risk. (Reuters)

Risks, Criticism, and Opposition

  • Legal challenges: Russia has already condemned some moves as unlawful. There’s risk of international cases, or counter-claims. (Anadolu Ajansı)
  • Precedents & unintended consequences: Worry among some experts that seizing state assets could encourage other countries to seize UK or Western states’ assets in return under different circumstances.
  • Moral hazard and domestic politics: Some UK critics argue that relying on seized foreign assets may be unstable or morally questionable, especially if funds are used for military purchases rather than humanitarian aid, and if oversight isn’t strong.
  • Logistical/operational risk: Using proceeds depends on how much interest accrues, legal clarity, and how quickly funds can be channelled into Ukraine’s supply lines, procurement, equipment, logistics—all while managing corruption risks etc.

Implications & What to Watch

  • Scale of support: Will this move materially increase aid to Ukraine, or just offer symbolic value? The amounts so far (tens to low hundreds of millions) are helpful but far short of Ukraine’s funding gaps.
  • Legal reforms in the UK: Watch the evolving legislation around sanctions, forfeiture, compensation, and disclosure of assets. For example, the change in purpose of sanctions so they can be maintained until compensation is paid is significant. (The Guardian)
  • International cooperation: How EU member states, the EU Commission, G7 coordinate will be key. If one major country balks, legal and diplomatic friction could undermine plans.
  • Russia’s response: Likely both legal and retaliatory. Moscow’s embassy in London has already condemned certain UK actions as “criminal.” (Anadolu Ajansı)
  • Precedent for future conflicts or frozen assets in other contexts: If successful, this model may be cited elsewhere (e.g. frozen assets from other sanctioned states) for funding repair, reparation, or reconstruction.

Summary

In short:

  • The UK has frozen tens of billions of pounds of Russian assets.
  • It is now using some portion of interest / profits from those frozen assets to fund military aid and loans to Ukraine, through initiatives like the UK’s Extraordinary Revenue Acceleration (ERA).
  • There are ongoing proposals and legal adjustments to expand what can be done—both in scale and in using more of the asset pool.
  • However, legal risks, sovereign immunity issues, diplomacy, and operational translation into effective support are nontrivial constraints.
  • UK Plans to Use Frozen Russian Assets to Support Ukraine’s War Effort — Case Studies

    Below are focused case studies showing how the UK (and allied partners) have translated frozen Russian assets into concrete support for Ukraine — the mechanisms used, legal and diplomatic frictions, and practical outcomes so far. I’ve cited the most important sources for each load-bearing point.


    Case study 1 — The ERA loans: UK’s £2.26bn commitment and the first tranches

    What happened: the UK committed ~£2.26 billion as its share of the G7’s Extraordinary Revenue Acceleration (ERA) loan package to Ukraine — loans intended to be repaid from profits generated by immobilised Russian assets. The UK delivered the first tranche (about £752m) in April 2025. (House of Lords Library)

    How it works (mechanism): the ERA structure uses proceeds/returns from frozen assets (interest, dividends, income) and G7 coordination to issue low-cost loans now while tying ultimate repayment to future reparations or proceeds. This approach reduces immediate legal risk compared with outright confiscation of principal. (Parliament Research Briefings)

    Outcome so far: tranches have been disbursed and used for defence and budgetary needs (e.g., air-defence procurement). The UK government lists ERA contributions among its major support instruments. (GOV.UK)

    Lessons / risks: politically useful and speedier than waiting for reparations, but constrained by legal complexity and the scale of revenues interest can generate. (wrmcouncil.org)


    Case study 2 — Using interest/profits directly: the “first missiles” / £70m package

    What happened: the UK announced a package — reported at £70m — using proceeds from frozen Russian assets to provide air-defence missiles and related equipment to Ukraine. This was framed as using interest/proceeds rather than seizing frozen principals. (Reuters)

    How it works (mechanism): rather than sell or touch sovereign principal, governments route interest/earnings that accrue while assets remain immobilised into military aid — legally safer but limited by the yield on the frozen pool. (wrmcouncil.org)

    Outcome / significance: symbolic and practical — it demonstrates a pathway to convert frozen asset yields into materiel rapidly, while testing legal and political boundaries. But the funds available from yields are small relative to Ukraine’s needs. (UK Defence Journal)


    Case study 3 — Coordinated G7 / EU approach — pooling leverage and risk-sharing

    What happened: G7/EU talks have moved toward pooling frozen Russian sovereign assets (or their revenues) so member states can issue large loan packages to Ukraine (discussions in 2024–25 contemplated dozens to hundreds of billions in aggregate). EU disbursements and Commission mechanisms have already channelled multiple tranches to Kyiv. (European Commission)

    How it works (mechanism): multi-state guarantees, EU macro-financial instruments, and shared legal frameworks help dilute individual legal exposure (so one country isn’t solely liable for an unprecedented seizure). The EU has sought to exclude such guarantees from deficit calculations to ease fiscal constraints. (Reuters)

    Outcome / significance: pooling increases scale (potentially up to tens or hundreds of billions in political discussion), but requires legal harmonisation and political consensus — slow but higher legitimacy. (The Times)


    Case study 4 — Legal innovation at member-state level: Estonia and national mechanisms

    What happened: some EU states (e.g., Estonia) have developed or proposed domestic legal mechanisms to enable use of frozen Russian assets for compensation or reconstruction, creating pilot legal approaches that may be scaled. Cambridge and policy papers flagged the importance of these domestic innovations for wider action. (cfg.cam.ac.uk)

    How it works (mechanism): domestic statutes create explicit exceptions or procedural routes that skirt sovereign immunity constraints (e.g., making assets available for specific reparations funds or judicial claims), often contingent on international co-operation. (cfg.cam.ac.uk)

    Outcome / significance: useful testbeds — they can build legal precedent and momentum, but they also reveal disparities between member states’ willingness to carry legal risk. (cfg.cam.ac.uk)


    Case study 5 — Political/diplomatic friction: Belgium, EU debates and the precedent problem

    What happened: Belgium and other jurisdictions that hold significant frozen Russian central-bank assets have been cautious; EU debates have focused on how to shield member states from fiscal and legal exposure. Proposals to use up to €140bn (or larger figures discussed publicly) face pushback unless clear rules and Eurostat treatment are resolved. (Reuters)

    How it works (mechanism): political negotiations seek to (a) classify loan guarantees so they don’t count against national deficit rules, and (b) create joint instruments to insulate treasuries from contingent liabilities. (Reuters)

    Outcome / significance: demonstrates the practical limits: even with political will, finance ministries worry about accounting, investor confidence, and reciprocal precedent for frozen assets. Progress requires technical fixes and shared political cover. (Reuters)


    Cross-cutting legal, financial and ethical themes (what the case studies show)

    1. Distinction: income/profits vs principal. Most practical steps so far rely on yields from frozen assets (interest/profits) rather than selling principal — a legally safer but much smaller revenue stream. (wrmcouncil.org)
    2. Pooling & guarantees reduce individual legal risk. G7/EU coordination is central: pooled instruments and shared legal frameworks let countries scale support while diffusing liability. (House of Lords Library)
    3. Domestic legal innovation matters. National laws (e.g., Estonia) can create templates for larger international mechanisms, but varying legal traditions create fragmentation risk. (cfg.cam.ac.uk)
    4. Scale vs speed trade-off. Direct use of interest can be fast and symbolically powerful; comprehensive use of principals requires complex legal pathways and time. (UK Defence Journal)
    5. Precedent and geopolitical risk. Aggressive confiscation-like moves raise concerns about sovereign immunity, reciprocity, and investor confidence; cautious constructs aim to minimize those risks. (Hoover Institution)

    Quick summary (one paragraph)

    The UK’s approach combines direct use of yields (interest/profits) for immediate aid (small but concrete packages), participation in G7 ERA loans (larger, coordinated tranches like the £2.26bn commitment), and support for legal and institutional innovation across allies to scale the model — all while navigating significant legal, diplomatic and accounting constraints that make full confiscation of principal politically and legally fraught. (GOV.UK)