When Russian forces invaded Ukraine in 2022, the European Union moved quickly to freeze €200 billion in funds belonging to Russia’s central bank. That’s more than two-thirds of the roughly US$300 billion in Russian foreign reserves frozen across the West in total. The bulk of these funds in Europe—€183 billion—now sits immobilized within Euroclear, a Belgian bank and securities depository.
Crucially, frozen doesn’t mean taken; the funds are still technically Russian property. And the whole arrangement has an ongoing expiration date: Unless all 27 EU member states unanimously agree to renew the sanctions every six months, these reserves could be returned to Moscow, potentially undermining Europe’s diplomatic credibility—and risking Ukraine’s entire future. So now what?
Sir William Browder is the head of the Global Magnitsky Justice Campaign, a London-based organization that promotes targeted visa bans and asset freezes on human rights abusers and highly corrupt officials around the world—which he established following the death of his lawyer Sergei Magnitsky in Russian police custody in 2009. Browder says it’s an unsustainable risk for the EU to continue cycling through its existing sanction renewals. For one, it’s increasingly likely that, under the new U.S. administration, America’s financial backing for Ukraine’s war effort will dry up—meaning Ukraine’s defense will need alternative sources of funding. And meanwhile, Hungary, and now Slovakia—two Kremlin-friendly EU member nations, emboldened by U.S. President Donald Trump’s move away from Kyiv toward Moscow—are threatening to veto renewal. Which make it urgent, Browder says, that the EU seize the funds once and for all.
The complication is that there’s resistance to the idea, not just from Moscow’s friends in the EU but from Kyiv’s allies, not least in Brussels, where Euroclear is based. They’re anxious—about legal ramifications, as well as the implications for other countries about what could happen to them if they put their money in European financial institutions …
John Jamesen Gould: Who exactly froze these funds to begin with—and how?
Sir William Browder: It was a coalition of Western countries led by the Group of Seven nations—Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States—along with the European Union. As to how: By the time Putin launched his full-scale war with Ukraine, he’d already invaded Georgia, taken Crimea, and bombed Syria. The West had screamed bloody murder but not put up any meaningful resistance, so Putin was convinced he could invade Ukraine with hardly any pushback. At first, it seemed as though he was right. I remember the British government imposing sanctions on banks in occupied eastern Ukraine; it was just such a weak reaction. But then something happened.
There was one person in the G7 who had experience with both finance and the Russian state: Chrystia Freeland—then Canada’s finance minister. She showed up at a meeting of the G7 and convinced her counterparts to freeze Russian state assets.
That surprised me—and it certainly surprised the Russians. Altogether, these allies ended up freezing around $300 billion out of $650 billion, more than two-thirds of which was held in Europe. All of a sudden, Putin lost a massive extent of his war chest.
Gould: Why 300 of 650?
Browder: Because that money was held in territories where they had the legal right to seize it. The other $350 billion was held in gold and in other currencies.
Gould: And most of that 300 was in Europe?
Browder: Exactly. The Europeans realized there was this huge pot of money sitting there. My immediate reaction was, they shouldn’t just freeze it; they should confiscate it altogether. Putin broke international law. It was the right thing to do—morally, politically, and financially.
The Europeans realized there was this huge pot of money sitting there. My immediate reaction was, they shouldn’t just freeze it; they should confiscate it altogether. Putin broke international law. It was the right thing to do—morally, politically, and financially.
By this time, I’d been running around the world, lobbying political leaders to target Russia financially for 13 years. But now, with Moscow launching a full-scale war, more of them started to listen. Elected politicians in the West who hadn’t been sympathetic to my case before the invasion were now suddenly ready to take serious steps: Putin had crossed a line.
Yet even though a lot of these politicians were coming over to my side, their governments weren’t. They seemed to think the war would end before long. Of course, they were wrong. Then they tried to convince themselves to remain inactive. They said things like, We can’t lower ourselves to the Russian level, we believe in the rule of law and in a rules-based world order.
My argument was that protecting the rule of law isn’t in conflict with enforcing international law; the two have to go together. But these governments objected that a seizure like this would be totally unprecedented. Which wasn’t entirely true. Western governments seized Iraqi assets after Saddam Hussein’s forces invaded Kuwait in 1990—though that was after, not during, the war.
Gould: So they worried an outright seizure would take everyone into uncharted, chaotic territory?
Browder: That’s right. There were precedents but no exact precedents.
Gould: What made them change their minds?
Browder: As time went on, the bills started racking up. European governments had to spend many billions backing Ukraine, but with so many other political priorities, even the most bullish governments had a hard time spending that kind of money. Eventually, they settled on a compromise: Even if they wouldn’t confiscate the money itself, they would confiscate the interest it was earning.
They then came up with the idea of lending Ukraine $50 billion securitized against future interest payments from the frozen money. To state the obvious, $50 billion isn’t nothing, but it’s not $300 billion. Instead of just taking the money from Russia and giving it to Ukraine, they came up with this convoluted plan in which they were basically negotiating with themselves. It’s nonsense. It’s not smart. Because what no one seemed to have realized is that in order to keep that money frozen, the EU has to reaffirm its sanctions every six months—which requires the unanimous consent of every single member state.
Hungary, especially, but also Slovakia have been threatening to not reapprove the sanctions. And Hungary’s Prime Minister Viktor Orbán has become much more assertive on that score since Donald Trump became U.S. president. The sanctions will last until July 31, 2025. If Hungary vetoes the reauthorization, the $200 billion of frozen Russian assets that are held in Europe will then be returned to Russia. It will be one holy mess, because who’s going to pay back the $50 billion that the Europeans lent to Ukraine? That’s why I’m pushing so hard for this now. It’s not too late: Confiscate it immediately.
Gould: You’re saying they froze the assets without a long-term strategy in mind?
Browder: Their stated goal from the very beginning was that the money could eventually be used for the reconstruction of Ukraine. The idea was to use it as war reparations, not for making war. My view, however, is that there won’t be a Ukraine to reconstruct if they haven’t got resources to defend themselves.
If Hungary vetoes the reauthorization, the $200 billion of frozen Russian assets that are held in Europe will then be returned to Russia. It will be one holy mess, because who’s going to pay back the $50 billion that the Europeans lent to Ukraine?
They were prone to wishful thinking; that’s why they did what they did: They hoped it would be over quickly.
Gould: So quickly, they’d never have to re-up?
Browder: That’s right. They believed they could put enough pressure on Russia to make it irrational for Putin to keep the war going. They thought there’d have to be peace negotiations where they could possibly use the frozen money as a bargaining chip. But now the sanctions might expire, which would mean that the head of the Russian Central Bank could then send an instruction to Euroclear saying, Please wire the money to such-and-such bank in Russia.
Gould: What mechanisms could the Europeans seize the money, then?
Browder: Euroclear is headquartered in Brussels, so the Belgian government is worried a seizure might open them up to a Russian legal challenge. In fact, I was recently at an event at the European Parliament when the Belgian ambassador to the EU told me just that. My response is very simple: Russia is not part of any international treaty where such a judgment could be enforced; they’re not a member of any international body where they could make that claim. They could go to domestic courts in Europe. But the European Parliament could prevent that by passing a law that says your assets can legally be seized if you invade your neighbor.
Gould: Does the European Parliament have the power to pass such a law?
Browder: I’m not a lawyer, of course, but if the EU’s lawyers think that’d be a problem they could pass a regulation at the Council of Ministers. Alternatively, the individual member states could pass laws of their own.
Gould: How would the EU handle objections from Hungary or Slovakia?
Browder: You’re right, Hungary might use their veto. A country with one and a half percent of the population of the entire European Union could basically hijack the national security of the European Union. But the EU could then tell Hungary, Okay, tomorrow the $14 billion of EU subsidies that you get on an annual basis will stop. And they could restructure the voting rights within the EU. They could, if necessary, force Hungary to behave themselves. Budapest doesn’t truly have power; they just think they have it when everyone is being polite. But when it comes to European security, there’s a lot that could be done if it had to be done.
Gould: Do you see the political will for something like that?
Browder: Not enough of it. I’ve met maybe half the foreign ministers of the European Union. That’s to say, I’ve met those who already agree with me—in countries like Estonia, Latvia, Lithuania, Poland, the Netherlands, Sweden, Denmark. The Belgians, of course, are scared of their own shadow. Britain is on board, but they’re not part of the European Union. Canada would be on board, but they don’t have a lot of Russian assets. France and Germany have been wavering. The former German Chancellor, Olaf Scholz, said he’d step forward to lead, but instead, he took two steps backward. Scholz’s successor, Friedrich Mertz, however, is fully ready to go. He just approved the use of Taurus missiles to hit Russian targets. And he’s sent German troops to Lithuania.
The EU could force Hungary to behave. Budapest doesn’t truly have power; they just think they have it when everyone is being polite. But when it comes to European security, there’s a lot that could be done if it had to be done.
I think European governments are moving in the right direction, though. I’ve seen it before. When I started the Magnitsky Campaign, everyone said, Absolutely no way, it’s impossible, it’s illegal, it’s not going to happen. But today 35 countries have Magnitsky acts. And I think something similar will happen in this case: It just makes so much sense to seize the money.
The U.S. is currently responsible for 40 percent of Ukraine’s military aid. If that support comes to an end, Russia will win the war. That makes it very urgent for Europe. If Ukraine loses, Russia will then move on to Estonia, Latvia, and Lithuania. This isn’t some paranoid figment of imagination, either; it’s Russia’s publicly stated objective. Europe will have a war inside its own territory. Ukraine simply has to be given whatever it needs to stay in the fight. Which gives European governments two choices: They can tax their citizens a few extra percentage points, which would be very unpopular, or they can take the Russian money.
Gould: Do you think the American president might get behind it? He seems to be getting a little frustrated with Putin.
Browder: He’s just as frustrated with Zelenskyy.
Gould: True enough, but what if Trump were to see this as an opportunity for America not to pay as much?
Browder: Maybe. During the Biden administration, Congress passed the bipartisan Rebuilding Economic Prosperity and Opportunity for Ukrainians Act, which allows the U.S. to seize Russian assets. But it now looks like America might abandon Ukraine, perhaps even the North Atlantic Treaty Organization. That’s why the Germans approved a trillion-dollar defense budget.
That’s why everybody is going to the Oval Office with invitations to meet the “king.” Everybody is trying to stave off what looks increasingly inevitable. If, for some reason, America doesn’t abandon Ukraine, that would be the biggest windfall for Europe imaginable. But most likely, it will.
Gould: Is there a risk that a full seizure might create a new precedent for hostile countries—like China or Russia, or Iran—to band together to seize Western assets, if on bogus charges?
Browder: Russia has been seizing Western assets on bogus charges long before the war started. Anything that anyone has in Russia has already been written off. Besides, China, Russia, Iran—North Korea, even—these countries are already cooperating closely.
Gould: What about a risk that seizing Russian assets might deter other states and organizations from investing in European currencies?
Browder: That might be the case, if there were more viable alternatives. But what are the alternatives, really? The reserve currencies of the world make up something like 92 percent of all trade globally. If you’re the Saudi sovereign wealth fund, you’re not going to suddenly start keeping your money in Iranian rials and Argentine pesos. You’re going to keep your money in dollars, euros, Swiss francs, Sterling, and yen.
Of course, it would have to be done within a careful framework. It can’t be arbitrary. But you’d make the fundamental rule very clear: If you invade a sovereign neighbor, you’re liable for the damages.