The United States and European Union recently took steps to implement regulations related to the confiscation and disposition of Russian sovereign assets for the benefit of Ukraine. On July 23, 2024, the U.S. Department of the Treasury announced that a new reporting requirement had been issued under the Rebuilding Economic Prosperity and Opportunity for Ukrainians Act (the “REPO for Ukrainians Act”). A notice of the reporting instructions was also published in the Federal Register on July 26, 2024. The new requirement applies to all financial institutions that hold Russian sovereign assets and that know or should know of such assets. These financial institutions are now required to notify the Office of Foreign Assets Control of any Russian sovereign assets that they hold no later than August 2, 2024 or within 10 days of their detection. According to the Department, the notice can be made using OFAC’s new form and must contain the details listed in the reporting instructions. Financial institutions were specifically instructed not to re-report information on Russian sovereign assets that were previously reported to OFAC.
The European Union also recently began implementing the EU regulation on the windfall contribution that requires Central Securities Depositories that hold Russian Central Bank (“CBR”) assets with a total value of more than €1 million, to make a windfall contribution to the European Fund for Ukraine – a requirement that applies to CBR assets dated from February 15, 2024 onward. In July 2024, Belgium-based Euroclear Bank announced its plan to pay approximately €1.55 billion to the European Fund for Ukraine in compliance with this regulation – its first payment to the Fund since the regulation went into effect. The European Parliament also recently demonstrated its support for Ukraine by issuing Resolution 2024/2721 (RSP) on “the need for the EU’s continuous support for Ukraine.” The resolution reaffirmed the EU’s continued support for Ukraine’s independence, sovereignty and territorial integrity and, among other things, condemned the recent visit to Russia by Hungarian Prime Minister Viktor Orbán, which was considered to be a blatant violation of EU treaties and foreign policy.
U.S. Department of Treasury Press Release | Recent Action | Federal Register | Euroclear Press Release | European Parliament Resolution (2024/2721 (RSP))