Weaponising sanctions: How EU plans to make Russia pay for Ukraine’s $10 billion arms package

In this handout photograph taken and released by the press service of the 65th Mechanized Brigade of Ukrainian Armed Forces on May 5, 2025, Ukrainian servicemen prepare to get into a military vehicle at an undisclosed location on the front line in the Zaporizhzhia region, amid the Russian invasion of Ukraine. (Photo by Andriy ANDRIYENKO / 65th Mechanized Brigade of Ukrainian Armed Forces / AFP)

In a bold new step to sustain military support for Ukraine, the European Union (EU) is working on a financial mechanism to ensure that Russia ends up footing the bill for the latest $10 billion arms package announced by US President Donald Trump.

According to a report in The Daily Telegraph, the EU is preparing to channel profits generated from frozen Russian assets into a NATO-controlled fund that would be used to purchase American weapons and deliver them to Kyiv. The move is being pitched as a way to hold Moscow accountable, not just politically and diplomatically, but financially, for its ongoing invasion of Ukraine.

Earlier this week, Trump unveiled a massive new arms commitment for Ukraine, which includes air-defence systems, missiles, and artillery shells. He said that the EU will act as the purchasing agent, buying the US equipment on Ukraine’s behalf.

At the heart of the EU’s plan is a clever workaround: instead of directly spending from its own coffers, the bloc aims to use returns from frozen Russian assets, which have remained invested and interest-bearing since the invasion of Ukraine in 2022.

Frozen Russian assets: €210 billion locked, €3 billion in annual profits

Following the start of the war, the EU froze approximately €210 billion ($243 billion) in Russian state assets, mostly central bank reserves, as part of sweeping sanctions on Moscow. While these assets remain locked and cannot be accessed by Russia, they have been generating interest income through investments in safe financial instruments such as sovereign bonds.

The EU’s new plan focuses not on the principal, but on the estimated €2.5–3 billion ($2.9–3.4 billion) in annual profits these assets generate. This income is now being eyed as a funding source for Ukraine’s defence needs.

NATO to manage the fund and purchases

As per The Telegraph, the NATO Security Assistance and Training for Ukraine (NSATU) will take the lead in managing and disbursing this cash pot. It will coordinate the purchase of weapons, mainly from the United States, and oversee their transfer to the Ukrainian military.

“It is widely considered that NATO’s support mission for Ukraine — NSATU — will play the lead role in coordinating purchases of American weapons and their eventual delivery to Kyiv,” a NATO official told The Telegraph.

In practical terms, the plan will work as follows: NATO will be handed control of a fund composed of EU and Canadian contributions, as well as profits from the frozen Russian assets. Using a Ukrainian-provided shopping list, NATO will then procure weapons from US manufacturers and facilitate their delivery to the front lines.