On the 12 February 2023, the EU Council has decided to regulate the handling of assets belonging to the Central Bank of Russia (CBR) which are immobilised due to EU sanctions. Financial institutions holding these assets must segregate revenues and follow specific rules. Central Securities Depositories (CSDs) with over €1 million of CBR assets must separate extraordinary cash balances and revenues, and are prohibited from disposing of net profits.
Considering the risks and expenses associated with holding assets and reserves of the CBR, each CSD has the option to seek approval from its supervisory authority to release a portion of the net profits in order to meet statutory capital and risk management obligations. The European Council may later decide to allocate a portion of these profits to support Ukraine's recovery.
Approximately €260 billion worth of assets belonging to the CBR have been rendered immobile in the form of securities and cash across the jurisdictions of the G7 nations, the EU, and Australia, with over two-thirds of these assets immobilized within the EU.
EU Council's press release can be found here.
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