• EU top diplomat Josep Borrell proposes diverting interest earned on the assets for Ukraine.
• EU officials propose an estimated three billion euros a year to assist Ukraine.
• Most funds are held by Euroclear, based in Belgium.

On Wednesday, the Kremlin stated that the European Union would commit an “unprecedented violation” of international law if it used frozen Russian assets to arm Ukraine. For months, EU countries have been wrangling over what to do with the assets, with the bloc’s top diplomat Josep Borrell presenting a plan on Wednesday to divert interest earned on them for Ukraine.

“The Europeans are well aware of the damage such decisions could do to their economy, their image, their reputations as reliable guarantors,” Kremlin spokesman Dmitry Peskov said.

“They will become the target of prosecution for many decades,” he warned.

On Wednesday, Russian foreign ministry spokeswoman Maria Zakharova announced that Moscow would inevitably respond to what she labeled as “direct banditry and theft.” EU officials state that their latest proposal could allocate an estimated three billion euros a year to assist Ukraine. The EU froze around 200 billion euros of Russian central bank assets held in the bloc as part of punishing sanctions imposed on Moscow for sending troops to its neighbor in February 2022.

Most of the funds are held by the international securities depository Euroclear, based in Belgium. According to the EU plan, 90 percent of the money taken from the profits would go to a fund used to cover the cost of weapons for Ukraine.

The remaining 10 percent would be funneled into the EU’s budget, where it would be used to help increase the capacity of Ukraine’s defense industry.

The EU’s push to find more funds for Ukraine coincides with Congress blocking a $60 billion support package from the United States, Kyiv’s other major backer.

Dwindling weapon supplies two years into the conflict have left Ukraine’s forces outgunned on the front lines and struggling to halt Russian advances. EU leaders are scheduled to discuss the proposal at a summit in Brussels on Thursday, and officials said the money could begin to aid Ukraine by July if a quick agreement is reached.

EU officials insisted that their plan was legally sound because the profits being targeted were earned by the securities depositories as a result of the sanctions and did not belong to Russia. Some member states, including Germany, have been very cautious about any moves that could undermine the faith of overseas investors in the European financial system.

At the same time, Brussels faces pressure from Ukraine and the United States to go further and seize the entire 200 billion euros’ worth of Russian government assets.

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