On 3 August 2026, the European Union received €1.4 billion in windfall profits generated from interest on cash balances of immobilised Central Bank of Russia (CBR) assets, marking the fifth such transfer. The funds, covering revenues from the first half of 2026, will be channelled to support Ukraine, with 95% going through the Ukraine Loan Cooperation Mechanism (ULCM) and 5% through the European Peace Facility (EPF). European Commission President Ursula von der Leyen said: “Russia must pay for the destruction it has caused. And we are using the proceeds from the immobilised Russian assets to make sure it does.” The transfer brings the total windfall profits generated since immobilisation to €8 billion, and follows a fourth tranche delivered in March 2026.
The mechanism stems from EU sanctions imposed after Russia's full-scale invasion of Ukraine, which immobilised CBR assets held in the EU. In February 2024, the Council decided that central securities depositories holding over €1 million in CBR assets must set aside extraordinary cash balances and could not dispose of net revenues. On 21 May 2024, the Council adopted legal acts enabling the use of these net profits for Ukraine's benefit. In December 2025, the Council further prohibited transfers of immobilised CBR assets back to Russia in a more durable way via Regulation 2025/2600, using Article 122 TFEU as legal basis.
The ULCM provides non-repayable support to help Ukraine repay the EU macro-financial assistance loan disbursed in 2025 and loans from G7 bilateral lenders under the G7 'Extraordinary Revenue Acceleration (ERA) Loans' initiative, totalling €45 billion. The EPF addresses Ukraine's pressing military and defence needs. The transfer underscores the EU's continued commitment to stand with Ukraine "for as long as it takes," as stated in the press release.
This latest disbursement reinforces the EU's financial backing for Ukraine amid ongoing war, with the funds directly supporting Ukraine's resistance and long-term reconstruction. The mechanism balances the EU's fiscal prudence—using interest rather than the principal assets—with substantial financial aid, providing a steady revenue stream without depleting the immobilised capital. For EU taxpayers, the scheme redirects Russian-generated revenues to Ukrainian support, avoiding direct national budget contributions. For Ukraine, the funds are critical for debt repayment and military procurement, easing fiscal pressure and enhancing defence capabilities. For Russia, the measure continues to deny access to its frozen assets and their earnings, a significant economic and political blow. For EU financial institutions, the requirement to set aside and transfer these revenues adds administrative and compliance burdens, though it also clarifies legal obligations under sanctions.
The transfer is part of a broader EU strategy to use immobilised Russian assets to fund Ukraine's recovery and defence, with further tranches expected as revenues accumulate.