- “Thank you madam chair and thank you for the question. I find myself in a way just repeating my previous answer but I'm happy to do so. We are aware of the demands on the one hand and the fiscal situation that Europe finds itself on the other hand. That is why the president has put forward this proposal to mobilize these assets but to mobilize them in a way that is consistent with international law. We are working on that proposal now. We think it is possible to do so and that is so that will be in a sense answer the question that you've asked that we will mobilize them but we will remain consistent with international law and therefore meet the council conclusions and limit the risks that the ECB has identified in the past. In terms of companies still in Russia, it's important to note that from 2022 there were many, many companies that left Russia quite quickly. Some did not for a variety of reasons and now I think find it increasingly less straightforward to exit Russia. It's not quite a straightforward process but we are aware those companies are still there and those companies are also aware of the risks they take by staying there. But as I said it's not always so straightforward to exit at this point. But on the Russian assets I will just repeat again it is trying to balance these two constraints that we are actually that the president has put forward this proposal in the first place: that we need the money but we also need to respect international law and we think that we can meet both constraints. Thank you.”
EU-Russia relations (from March 2022) · Russia-Ukraine conflict (10th term) · Taxation of windfall profits
- “Thank you madam chair, thank you for the questions. I mean just to come back and say that, I mean in a way this is what the president has been saying: that this is Russia's war, Russia should pay. The EU will make a loan, it will be collateralized by these assets. Ukraine will only repay the loan if they receive reparations from Russia, otherwise the assets remain immobilized and Ukraine and the EU do not pay those assets. So this is linking, as has always been the case, linking the ultimate release of these assets to reparations paid by Russia after the war. ECB, we are in a continuous dialogue with the ECB and they have made their position very clear from the outset and I think as I said it is a position that people have listened to because we do not want to be in any way inconsistent with international law. And that's why we are, and I do not want to go into detail which is why I'm not going to answer your second question as well on this because I do not want the detail of this proposal now because it's still under preparation and I'm not really in a position to do that. But just to be aware that we, one of the reasons we're doing this is because we do want to take account of the ECB's concerns which are there and they continue to voice them and they are entitled to do so because it is a valid point. We have to be careful that whatever we do with respect to Russia does not have general or is not seen as having general applicability and therefore might undermine the broader confidence in the euro area and the international financial system as a whole. But their views are well taken into account and the technical detail will come back to later when I have the technical details myself in front of me but I don't want to go in there now because it's not my position to talk about that until the president has the chance to make the proposal. Thank you.”
European Banking Union · Russia-Ukraine conflict (10th term)
- “Thank you Madam Chairman. I think, as the Commissioner and as the President has made clear, there will need to be European guarantees involved here. So this is not the analogy you have just drawn; it is not a perfect analogy here by any means. The ownership of these assets will remain with Russia. The loan will be made by the European Union using these assets as a form of collateral against the guarantee. Ukraine will only repay that loan if Russia makes reparations. Europe will therefore receive its money back if Russia pays reparations to Ukraine. Otherwise, these assets remain immobilized here as the collateral against the European loan. So it is not the analogy of your furniture. This is actually consistent with international law because the assets remain in the ownership of the Central Bank of Russia, but they can be mobilized using these guarantees from the European side. The issue is not really about where they move or don't move; it's about repayment. The loan will be repaid either through Russian reparations or it will remain outstanding, backed by the collateral of these assets which remain in Russia. But as I said, it's getting very complicated. It is the guarantee that the European Union will give that makes it possible to make this loan without pledging somebody else's collateral. Okay, again, I don't want to go into too much detail on this because, as I said, this is something that I am not responsible for and it is being worked out as we speak. So perhaps it's better to let the details be decided and then we can come back because there are a bunch of issues that have to be looked at. But the fundamental point that the President has made is that we can mobilize these assets consistent with international law and that the ownership will not be changed. I mentioned earlier, I should have come back on these national implementation, these national sanctions units. I am told that by law they all exist, so I could tell you they're already there. But we know that some Member States have not managed to kind of operationalize them in terms of centralizing sanctions control. We're dealing with those. I still am not sure how many of those Member States. I am just informed that we are dealing bilaterally with them, but de jure they all have established them under law. They're not all operational yet, so that's perhaps the more important point there. Thank you.”
EU-Russia relations (from March 2022) · Russia-Ukraine conflict (10th term)
- “Thank you, Madam Chair, thank you for the question. The ECB's concerns, I mean, they are not only the ECB's concerns but they're the ones the ECB have been expressing will be addressed. I think by what the President has said is that whatever we eventually propose to do will not affect the ownership of these assets. What has been the ECB's major concern is that we will breach international law. So the idea here, and I don't want to go into too much detail because this is a proposal that's still under preparation, is that we can mobilize this money without affecting the ownership of the assets. So that will be in conformity with international law, and this is where the concern—and it's a concern we fully understand—about the possible implications for the international financial system and for the euro area financial system as part of that in particular needs to be borne in mind. So the idea will be to mobilize these assets but not in a way that affects the ownership of the assets, which is in fact the point that the ECB is primarily and mostly concerned about. Your point on the possibility of retaliation, well, this is always there, and this is one of the things we have to bear in mind when we talk about this subject. There are—it's not just, how do I put it, an open and shut case. There are other considerations to be borne in mind. One is the concerns as expressed by the ECB and others, but the second is what Russia might do if we do this. So again, it is very important that we present the proposals in line with international law so there is no excuse for anyone to take this retaliation because we have not actually breached international law. And then on the HCHRTC, yes, we are looking at building a case perhaps for listing Russia, but we are where we were back then. We are trying to build the case, we're trying to put together the evidence. You will know, of course, that Russia has not been suspended from the FATF. It's been suspended in the FATF, it has not been taken out of the FATF. So there is still a problem of finding us the evidence we need to make the case to actually put them on the list for AML reasons. Okay, so this has to be a legally sound proposition for us that has to be based on the AML framework and breaches of Russia of that framework, and that's what we're looking for now. But this, of course, is difficult to acquire this evidence. Ordinarily, you do on-site inspections and you see what's going on. That's not really a possibility at the moment, so we're trying to do this from remote, but we are working on it as we promised we would do. Thanks.”
EU-Russia relations (from March 2022) · Anti-money laundering regulation · European Banking Union
- “Thank you. On the deadline I can say yes the deadline is the same so whatever my, I think it's what my commissioner said here holds so we are still working on it. Two things here just to clarify in case there's any confusion. There are two possible listings here. One is a FATF listing which we need to get the support of other FATF members and we have been trying but it's not so straightforward because there's a block of people in FATF who are not supporting this. There is of course the possibility for us to go on our own list which is what we were discussing before and that is what we're working on but we still have to build the same case we would build in the FATF context to do that. Okay so that is legally sound within our own framework and that requires quite a bit of work and we have to prove that they have actually breached along certain rules. And remember prior to the suspension from FATF they were not listed in FATF. They had in fact if I remember just rightly they had gone through an examination by FATF and had come out of it rather well. So we have to build that case and that's what the work is underway. The national sanctions implementation I will have to check on this to see exactly who has and who has not done this and I can come back to you. I cannot today give you the numbers on that. What I will say here is that we are, the Commission is aware that there's an implementation issue around sanctions but we need to understand that we have gone from almost zero to maximum capacity in a very short space of time. When I took over the sanctions file back in whatever it was 2020 this was a very small operation. It has now become a very big operation in Europe. The member states have had the same process we have had. They have to go from very low level to very, very high capacity output in a very short period of time. So implementation yes we need to work on that. We need lots of things in implementation but actually we're also in the process of imposing more and more sanctions through packages now nineteen packages over three years so it's quite a rhythm. So I think we have to be a little bit realistic here and understand that the member states like us are having to resource this, they're having to organize this while at the same time implement pretty aggressive pretty large scopes packages. So we accept there is an issue of implementation. I think I would love to have a moment of calm so we can all sit down and talk about how we can do that better but we are not in a moment of calm. We're in a moment of continuously ramping up the pressure on Russia through sanctions but yes there is an issue of implementation and we need to work on it and I think that's a valid point. On cryptocurrencies very early on cryptocurrencies were identified as one of those areas where you may be able to circumvent sanctions. We put certain sanctions on cryptocurrencies in the very early packages but we are keeping an eye on this to see to what extent it is being used. I mean to be fair cryptocurrencies are a more general issue around money and money laundering and not just for Russia. It's a more general issue about cryptocurrencies, the possibilities to use them for these purposes. So it's not a uniquely sanctions issue but we are keeping an eye on that area in specifically related to sanctions. Sanctions.”
EU-Russia relations (from March 2022) · Regulation of crypto · Anti-money laundering regulation
- “Thank you. Thank you, Commission. Thank you, Madam Chair, thank you for the question. I think we are very conscious of the need for a sound legal basis of what we propose. I mean, one of the interesting features of sanctions in the European Union is it is so legally based. Everything is based in law. We are, because of that reason, a little bit—we're quite a lot less flexible than our U.S. partners, but that is the structure we have and we operate within it. So anything we put forward will be assessed for legal soundness. So on the LNG, yes, this is an approach we have assessed. It is legally sound. On the Russian assets, well, I think you have made the point as others have made, this is a complicated discussion, okay, because there is a sense of grievance on one side that would say that this justifies certain actions, but there is international law, so we need to be careful that we remain within international law, and that is what we are trying to do here with this proposal. What the President has promised to offer is a way in which we can mobilize the assets while remaining fully within international law. So it's clear from her statement the ownership of the assets will not be touched. As I said, this is legally sound. I mean, this has been checked. It is legally sound and therefore—and has been, as I said, it is now under discussion with the Council and is at least for the moment accepted in the Council. Thanks.”
Natural gas · EU-Russia relations (from March 2022)
- “Thank you madam chair and thank you again for the question. Actually it's a good point and I should have made, I think I made it in my introduction but I have maybe not stressed it enough that a lot of what we do here is in the context of the G7 and this is part of an international consensus to work on the six months. You're probably aware that we managed in the specific context of the immobilized assets to lengthen that period so that has been somewhat lengthened. That was one of the, as you rightly said, one of the asks of our partners. In relation to the ERA loan we are again, I do not want to go into the details of the proposal which is currently under considerations but of course we are always aware that the sanctions are renewable every after certain periods of time six months or beyond depending on the asset concerned. So this is something we have to take into account and we will take it into account in this new proposal. Switzerland, well we work very closely with Switzerland. We have a long standing relationship with Switzerland in any case and in this particular context it has been very, very close. But in the end of course we cannot force things on our partners that they're not willing to do so. We are in touch, we are in contact with them, they know our position on this but in the end of course they're a G7 partner, they are not in the Union and there's not much we can do beyond that other than urge them to take account of our position on these things. Thank you.”
EU-Russia relations (from March 2022) · EU-Switzerland relations
- “Okay, thank you and thank you again for the question. Let me be very clear, there was a, it may have been a translation issue but there was a reference to confiscation. These assets will not be confiscated. Okay, so let's be very, very clear. The idea here, as I said, is to mobilize these assets without changing the ownership. So the ownership remains with the central bank of Russia and that's important because then we can mobilize the assets but in consistency with international law. I am not the service responsible for doing this. This has been, I mean ultimately the Commission is one body so it is the Commission itself that is responsible. Within the Commission this has been done not by DG FISMA but by DG EKFIN and others. But in the end it will be adopted by the Commission so it'd be a Commission responsibility. And of course I take the point that we have to do this in a way that is consistent with international law because we do not want to undermine confidence in the euro system. That is why I think I said at the beginning we have to be careful here because whatever we may feel about the specifics of this case it will be generally applicable. Whatever we do and others will take a view that irrespective of who is the target of this action now, they could be the target in the future. And so this is important but we are taking that into account and I do not think we are behaving in any way that's irresponsible. I think the president has been clear we need to mobilize these assets. Russia has started this war, Russia should pay for this war and therefore we're going to mobilize the assets but we're going to mobilize them in such a way that is not going to undermine Europe's position vis a vis international law. Thank you.”
EU-Russia relations (from March 2022) · Russia-Ukraine conflict (10th term)
- “I mean, I don't have a lot to answer here. I mean, it was on the cost of digital euro. I mean, I think on that I shall have to defer to, to Pietro because he has the numbers, I guess, on the difference between the cost of euro and the cost of issuing cash. I think that was the only question for me. Thank you.”
Cash as means of payment · Digital euro · Means of payment (cash vs digital)
- “Thank you, Madam Chair Um, well, just to repeat what both Commissioner Dombroski and Pierre Sepuloni said, this is not an either or situation. So we do not see this as either public or private. We believe both can coexist and even leverage each other. Now, you asked me specifically about how we see the the current situation in terms of, um, private payment solutions in Europe. You will know that the commission has been supportive of private payment solutions, going back well beyond any discussion of the digital euro, and we remain very supportive of those proposals today. We have emerging initiatives like FP and Europa, and they're all heading in the right direction. They're exploring concrete ways of offering new and interoperable cross-border retail payments, and therefore they're providing alternatives to international card schemes. But their business model, and, of course, their long term viability and their ability to compete with these international cards is not yet assured. So today, these solutions are available in some member states only and offer person to person payments, whereas point of sale payments at shops are not yet rolled out. Also, achieving network effects with these various payment solutions will take time. So for merchants to be willing to accept a new means of payment, users need to be eager to use it and vice versa. So these are the network effects we need to see, so it remains to be seen by when these solutions will be accepted in every shop.”
Cash as means of payment · Digital euro · Means of payment (cash vs digital)
- “Will they be accepted in every shop across the union? So we are really closely monitoring these initiatives. We have, as I said, been supportive for many years. I have made many speeches myself over the years in support of these, going as far as we can go, and we're discussing commercial operations. But we are very, very supportive. But I believe, honestly that it is not either or. We think the digital euro will underpin these private sector solutions. They can actually reinforce the success of these solutions by providing, you know, um, initiatives to merchants in terms of the euro area that will offer them a sort of an immediate network benefit that would otherwise be too long and too costly to build. So the private solutions can use the infrastructure that the euro, the digital euro, will provide and therefore be up and running and functional more, more quickly. So I think in some we, um, we strongly support these initiatives. We hope they are successful. We don't think they're an alternative to the digital euro. They will co-exist. But of course we have to wait and see. We have been waiting a while.”
Digital euro · Financial regulation · Means of payment (cash vs digital)
- “Thanks, Commissioner. Um, as I said, in a way, this is almost a legal question. I'm not a lawyer, so please. Um, the legislation as it is currently drafted, uh, allows for the circulation of global stablecoin within the EU. Why? Because at the time it was drafted, global stablecoin was seen as a important new market. And the EU should have access to the liquidity market would bring. Now, we already acknowledged back then that most of these global stablecoin would be denominated in US dollars. It's simply there are very few chances, I think, of a euro denominated stablecoin, at least today. So we built in important safeguards as well for that. So those safeguards are there. Now other views are now being expressed about what has evolved since, and whether this is still the right decision or not to have taken. But the the text as it is written, allows for the. So it is not possible for us to read the text as saying we can prohibit it because the text doesn't say that. So for us, the best thing to do now is to issue the Q&A, to clarify to supervisors how best the safeguards we've put into the text can work. And that's why we want to issue the Q&A. So I said the text says they are allowed. We cannot use that text to prohibit. Best thing is to make sure that many safeguards and there are many safeguards built into Meka are as clearly understood by the supervisors at national level, because they are the ones who will make this decision, and that carries with it its own risks of, let's say, differences of view. To put it that way, we need to make sure that that is as clarified, as clear as possible, those supervisors, what they have to do. And that's the function of the Q&A. But the our legal service view is that the text, as it stands, does not allow the prohibition of global stablecoin.”
Financial regulation · Use of stablecoins · Regulation of crypto
- “Thank you. Um, as I said, we have been strong supporters of these private initiatives. And in fact, I think they're stronger now than they probably have ever been. Um, so I think the the jury is still out, but they are making a lot more progress than they have in the past. I think it wasn't a question of regulation. You cannot regulate this into into existence. These were commercial decisions to be made by banks, so we could not sort of force them to do this, but we could encourage them to do this. And we encouraged them to the limit that we could, because, I mean, they are commercial operations and the Commission cannot favour one over the other. So we simply said, as you will go back to the time of several commissioners ago, we were making speeches saying we want a single European payment solution, please deliver sending nice signals to the market that this was what we liked. But this is all we can do. We cannot kind of create this thing because it's ultimately a commercial operation. So I don't think it was a question of regulatory ambition. I think it was perhaps just a slowness on the part of the market. I think this is just the story of, I will say, the story of financial integration is persistent fragmentation and an inability to get around that fragmentation. And this was true in payments, as it was true in other parts, and still is true in other parts of the market. I don't know whether I will take the or. I leave the question to to Piero.”
EU Single Market harmonisation · European Banking Union
- “Thank you Madam Chair. I can be very brief. First of all, thank you for the opportunity to come here. It's always important to hear the views of the Parliament on these issues. As I said at the beginning, we have now implemented eighteen packages and will very soon put in place the nineteenth package. You will see that certainly these packages have become bigger and broader in scope as we have gone along. They are having an effect. Sanctions are never—they are slow burners. They are not things that affect immediately but they progressively impact over time. I think we can see in terms of the numbers coming out of the Russian economy that they are impacting over time, so they are important. It's important that we continue to have your support for this effort. On the assets, as I've explained to you, you must distinguish between private and public. On private, this is a matter of not really sanctions law; it's a matter of criminal law whether you can confiscate these assets or not. We cannot do this under sanctions law, as has been pointed out. There have been improvements to how it can be managed under criminal law, but without criminal legal proceedings and due process, it's not possible to just confiscate these directly under sanctions law. On the Russian sovereign assets, as I said, we have this issue of consistency with international law. It is an important point for many members of the Union but also our G7 partners. So what we are doing is working on a proposal that will allow us to mobilize the assets more fully but remaining consistent with international law. I think that's what the proposal we are working on now hopes to do. The President has indicated that she will bring them forward before the end of the year, and I will leave it for her to do that and not speculate too much in advance what will be in it. Thank you very much. ****Aurore Lalucq (France, S&D) @Chair: Thank you, Mister Adiakov.”
EU-Russia relations (from March 2022) · Anti-money laundering regulation · Russia-Ukraine conflict (10th term)
- “Thank you, Madam Chair. Just very quickly on the Russian sovereign assets, I acknowledge the frustration, but the reality here is that there are some very strong views around the table on this particular issue, and there is disagreement. Those who are concerned are concerned about the fact that sovereign immunity exists in international law, and if we move against it, then we cannot just confine it to one country. It then applies to all countries, and that therefore has implications more widely on the system. So this is where this discussion comes, and I think I understand the frustration, but we need to understand that this is a very important point and that it could, in the longer term, be quite detrimental to the international financial system to do this because you cannot limit it to one country. Once you break it, it's broken for all countries. On the purchasing of real estate, I mean, the Commission is open to all of these ideas, but every package we put forward is a careful balance between—I mean, we are not responsible for adopting sanctions; we propose them as usual. Member states adopt, member states implement. So every package we put forward is a careful balance. I have to say they're getting stronger and stronger over time now, but we are open to these ideas, but much will depend on whether member states are willing to go along. On anti-circumvention, you will see from the last packages, starting particularly from seventeen onwards, we have been taking increasingly measures against third countries around circumvention. In the last package, even to the point of putting transaction bans on banks in third countries, which has been a very strong signal. There has been strong reaction to them as well, but that in a sense was the point. We have, as you know, an ambassador who is responsible, you know, David O'Sullivan, an envoy who is responsible for visiting these countries and making the case and explaining to them what we see and what we might do if we continue to see problems. As a matter of sort of order, we have not in the past been extraterritorial on our sanctions. Sanctions, we have not sought to apply sanctions beyond EU borders. That is a principle we have held. That does not mean, of course, we cannot apply our sanctions in such a way that they have these effects on those who are circumventing. So I think if you look at the seventeenth, eighteenth, and have a look at the nineteenth proposal we have made, you will see that the anti-circumvention focus has increased significantly over time.”
EU-Russia relations (from March 2022) · Anti-money laundering regulation
- “Thank you, thank you madam chair, thank you for the question. I probably should have said it last time that the delisting of Russia on the AML list will be in many ways a symbolic gesture from our side because European banks are already subject to a transaction ban vis a vis a lot of the entities that you're talking about. So sorry but again in Dubai we, this would require us to be extraterritorial in our sanctions and this principle is not there. So we do not impose our sanctions on entities outside of the EU. Within the EU we have a transaction ban which in a sense covers the AML point within the EU but we do not apply our AML law either by the way extraterritorial only to the EU. So this is the only answer I can give you on this is that we already have in place what we need to manage AML from the EU AML framework perspective. Of course listing would be a powerful signal as well but that requires us to build a case that shows that they are somehow in breach of AML laws within the AML framework. But as I said it's a largely symbolic thing because from the EU AML framework we've already achieved the objective through the transaction bans we put in place under the sanctions law. And as for Dubai as I said this would be extraterritorial application and this is something we have not at least at this point chosen to do.”
EU-Russia relations (from March 2022) · Anti-money laundering regulation
- “Thank you. I mean it's important just to recall what the objective of sanctions are. The objective of sanctions is to put pressure on the entities and the country on which the sanctions are imposed. They are meant of course to be reversible. Okay, so the sanctions law itself cannot confiscate. This is simply not within the logic of the law, it's not within the scope of the law. So as I said earlier, if you want to confiscate these assets you need to prove criminality and criminal and that requires due process. So it's not a question of whether we're happy or unhappy with the member states. The member states have to identify if this criminal behavior exists and then through due process prove it and then of course they can confiscate, they can confiscate the asset. I mean I always feel a bit bad when I say this because it always sounds like we're ducking slightly but you know we are not responsible for the implementation of sanctions. This is a national competence delivered to the national competent authorities and we have seen good examples of national authorities that have done this. I think Latvia is one example of what has been done. So it's not a question of whether we're happy or not. We are not responsible for this. We cannot do it through the sanctions law but we accept that confiscation of these assets requires proof of criminal behavior. We set up this freeze and seize task force which was to help harmonize the approaches, use best practices, help member states to learn from each other but in the end this is something that member states need to do themselves. And then we cannot have a view if that criminality is not proven then the sanctions law does not allow the confiscation of the assets. Thank you. ****Aurore Lalucq (France, S&D) @Chair: Thank you, so I think if you want to know.”
EU-Russia relations (from March 2022) · Anti-money laundering regulation · EU policy on criminal justice
- “Many thanks, Madam Chair, honorable members, good morning to everybody, and thank you for the opportunity to contribute to this discussion on the implementation of financial sanctions. Our overall work on sanctions has been unprecedented and it has been swift—in record time. We have imposed the toughest economic sanctions in the history of the EU. Our eighteen packages of sanctions make it harder for Russia to continue its war of aggression against Ukraine. We will continue our support and make sure to strengthen Ukraine's position for every scenario, including for any possible peace negotiation process. In this context, it's necessary to step up economic pressure on Russia. That's why the Commission adopted its proposal for a nineteenth package of restrictive measures last Friday—that's the nineteenth of September—and it's currently in discussion with the Council and going well. To be successful, our measures must be effectively implemented. This requires ongoing effort from all actors involved, both at the EU and the national level. That's why in the Commission we will continue to support member states in boosting compliance and strengthening enforcement. In the Commission, we are pursuing numerous avenues to strengthen implementation of our sanctions, including financial sanctions. I'd like to just touch upon a few of these. Guidance is available through our frequently asked questions, and there are now thousands of these out there, and through our recommendations for proper due diligence. Resources are also available through a number of online tools, in particular the Sanctions Map and the Financial Sanctions Database. EU facilities to enhance better coordination and the safe exchange of information with and among member states are provided through a dedicated whistleblower tool to inform about sanctions violations and the so-called Sanctions Information Exchange Repository—and here comes an acronym, SIER. The SIER is an IT platform that connects securely all sanctions authorities, allowing them to share among themselves and with the Commission information about frozen assets, licenses, and exchange about implementation challenges. We also host expert groups as fora for discussion among member states and other meetings to discuss sanctions implementation as a complement to work undertaken by the Council. Capacity building measures are also provided for national sanctions authorities via the EU-funded Technical Support Initiative program. When it comes to implementation and enforcement of our measures, we rely on the member states, of course, via national competent authorities to make sure that the EU sanctions have the intended bite. To help our small and medium-sized enterprises navigate the complex landscape of sanctions compliance, the Commission has also launched the EU Sanctions Help Desk. This portal offers a comprehensive range of services designed to help SMEs comply with EU sanctions worldwide, reducing the risk of noncompliance and associated costs. Since the beginning of Russia's war, we have seen significant improvement in enforcement throughout Europe; however, we need to keep up the pressure here. To this end, we are committed to continue tightening sanctions, notably but not only in the financial sphere. For example, we plan to expand transaction bans to additional Russian banks and third-country banks supporting circumvention. We are also working on better alignment with the U.S. on crypto restrictions and financial targets and limiting the circumvention through various Russian payment systems, including MIR payment cards and SBP—these are both Russian payment systems. Now, I'd like to say just a few words concerning our work on Russian assets. These include the state or the so-called sovereign assets of Russia and private assets—assets of private individuals or companies in Russia. Russian assets are subject to different restrictive measures depending on whether they are public or private assets and, of course, on their ultimate owner. So under EU sanctions, all assets and economic resources belonging to or controlled by listed persons or entities must be frozen. Currently, in connection with EU sanctions against Russia, we have assets of over twenty-five hundred people and entities frozen—so it's two thousand five hundred. So far, EU member states have frozen around twenty-eight billion euros of assets belonging to Russian and Belarusian private persons and entities. The Commission has set up the Freeze and Seize Task Force to ensure EU-level coordination to implement sanctions against listed Russians and Belarusian oligarchs. These private frozen funds cannot be confiscated simply because they are owned by the individuals and entities subject to the sanctions. EU sanctions are temporary and precautionary measures and are meant to be reversible, so the sanctions alone cannot change ownership. However, as soon as there's a demonstrated link with criminal activities, these assets can be confiscated by the member states on the basis of existing criminal law regimes, to a large extent already harmonized at EU level. To facilitate this task, the Commission has adopted a directive on the criminalization of EU sanctions violations, which sets out common EU rules making it easier to investigate, prosecute, and punish violations of sanctions in all member states alike. In addition to these private assets, as part of the sanctions imposed by the EU on Russia in response to the aggression in Ukraine, the assets of the Central Bank of Russia held by financial institutions in member states have been immobilized since February 2022. The extraordinary revenues generated by the immobilization of these Russian central bank assets but earned by the EU entity according to the previously concluded agreement with the asset owner are already being redirected to the EU budget and are then used to support Ukraine. The immobilized sovereign assets held in the EU are worth over two hundred billion euros and represent the largest share of such immobilized assets worldwide. But these assets enjoy sovereign immunity under international law. Legally, their confiscation as part of countermeasures raises questions of compatibility with international law in particular. They are also required to be reversible, which a definitive confiscation would not allow for. So looking ahead, we will need to remain agile. The global landscape is shifting, and we will need to be able to adapt and respond decisively to new challenges. We must strive to ensure that sanctions implementation and enforcement is further improved to ensure that they have the maximum impact on Russia while having the minimal impact on the EU. To this end, the Commission will continue to support member state authorities. While the assets of the Central Bank of Russia should remain immobilized until Russia pays for the damage it has caused to Ukraine, the Commission is working towards finding a new comprehensive and legally sound solution to leverage these assets to aid Ukraine in obtaining compensation from Russia. As the President of the Commission announced in her State of the Union address, we are working on a new solution to finance Ukraine's defense efforts based on these immobilized assets but without impacting on the ownership of those assets. We will continue to work closely with international partners to ensure the successful completion of the IMF program and to guarantee that Ukraine has sufficient resources to combat Russia's aggression. This includes the full implementation of the G7 ERA Long initiative by all G7 partners in the coming months. Within the EU, we will continue to aim for uniform implementation and enforcement of our measures as well as support for national authorities and economic operators. And I will, as I have now gone well over my time, stop here. Thank you.”
EU-Russia relations (from March 2022) · Russia-Ukraine conflict (10th term)