EU countries fail to agree on giving Ukraine income on frozen Russian assets - Borrell

BRUSSELS. March 6 (Interfax) - The European Union's top diplomat, Josep Borrell is not yet ready to make a proposal to the European Council to use income earned on frozen Russian assets to help Ukraine because there is no consensus on the issue within the EU.

If EU countries managed to agree on using Russia's frozen assets, the EU would be able to send this money bolster Ukraine's defense capabilities, but this requires an agreement at the level of member countries, unanimously approved based on a proposal made as part of the EU's joint security and defense policy, Borrell said at a press conference in Brussels on Tuesday during a presentation with the European Commission of the European Defense Industrial Strategy and European Defense Industry Program (EDIP).

The budget for this program, among other things, provides for expanding defense and industrial cooperation between the EU and Ukraine and support for the development of Ukraine's defense technology and industrial base.

There is no agreement between EU member nations on using Russia's assets, Borrell said. In order to make such a decision, Borrell said that he, as the EU's high representative for foreign affairs and security and defense policy, must make such a proposal to the European Council and, since this concerns restrictive measures against Russia, obtain unanimous support.

Borrell said he will do this when he is confident that member countries are prepared to agree to this proposal, which is not the case at the moment. Discussions are continuing and agreement has been reached on defining the resources and holding them separately, he said.

This does not refer to the confiscation of Russian assets, he added. The discussions concern income generated by these assets, not the capital itself, Borrell said.

The European Council announced on February 12 that it had adopted a decision and a regulation clarifying the obligations of central securities depositories (CSD) holding assets and reserves of the Central Bank of Russia (CBR) that are frozen due to EU sanctions.

The Council said the decision clarifies "the legal status of the revenues generated by the CSDs in connection with holding of Russian immobilized assets and sets clear rules for the entities holding them." In particular, "CSDs holding more than 1 million euros of CBR's assets must account extraordinary cash balances accumulating due to EU restrictive measures separately and must also keep corresponding revenues separate." In addition, CSDs are prohibited from disposing of the ensuing net profits.