U.S. Treasury Redirects $20B from Russian Assets to Support Ukraine

The U.S. Treasury has transferred $20 billion to Ukraine from profits on frozen Russian assets under the G7 Extraordinary Revenue Acceleration (ERA) Loans initiative to support Ukraine during its conflict with Russia.

The disbursement, directed through the World Bank’s Facilitation of Resources to Invest in Strengthening Ukraine Financial Intermediary Fund (F.O.R.T.I.S. Ukraine FIF), is part of the $50 billion package agreed upon by G7 nations in June. U.S. Treasury Secretary Janet L. Yellen emphasized that this initiative ensures Russia bears the financial costs of its actions instead of taxpayers in coalition nations.

“These funds will provide Ukraine with essential support for emergency services, hospitals, and other key operations needed to sustain its resistance against an unprovoked war of aggression,” Yellen stated. She added that this move, coupled with tightened sanctions on Russia, reflects the unified resolve of the G7 to support Ukraine’s sovereignty and uphold international norms.

Since Russia’s invasion of Ukraine in 2022, G7 nations have immobilized approximately $325 billion in Russian sovereign assets. The interest generated from these assets, estimated at $3 billion annually, has been earmarked for initiatives like the ERA loans. In October, G7 nations agreed to utilize these proceeds to provide long-term financial assistance to Ukraine.

The U.S. share of the $50 billion package, announced earlier this year, faced months of political deliberation before the $20 billion allocation was finalized. The funds will be restricted to non-military use, ensuring they address humanitarian and institutional needs within Ukraine.

According to Yellen, aiding Ukraine aligns with U.S. national interests, as allowing Ukraine to fall would threaten NATO allies and encourage further aggression from Russia.

The move comes at a challenging time for Ukraine, as its military faces territorial setbacks and growing pressure on the frontlines. Ukrainian President Volodymyr Zelensky has expressed the critical importance of sustained international support.

The announcement also comes weeks before U.S. President Joe Biden transitions power to President-elect Donald Trump, who has indicated a differing stance on Ukraine. Trump has described financial aid to Kyiv as a drain on U.S. resources, raising questions about the future of American support under his administration.

Beyond the United States, the European Union has committed over €18 billion ($19 billion) in similar financial aid to Ukraine, funded through the same mechanism of frozen Russian assets.