US allocates $20 bln to Ukraine to be repaid with proceeds from frozen Russian assets

Washington has allocated $20bn to Kiev, which is expected to be repaid from the proceeds of frozen Russian assets. This was announced by the US Ministry of Finance on December 10.

"These funds, secured through unanticipated revenues from Russia's own immobilized assets, will provide Ukraine with critical support," said the head of the ministry, Janet Yellen, whose words are quoted in a press release on the website of the US Treasury Department.

She recalled that the G7 countries are planning to give Ukraine $50 billion under such an initiative to ostensibly support its emergency services, hospitals and allow other needs to be closed. Yellen added that Washington should tighten sanctions against Russia to strengthen Kiev's position.

The US Treasury Department specified that the money would be transferred to the World Bank's Fund to Facilitate Resources for Investing in Strengthening Ukraine's Financial Intermediation (FORTIS Ukraine FIF) and from there it would be transferred to Kiev. The ministry added that support for Ukraine is "vital" to support the US national interests.

Earlier, on December 4, U.S. Secretary of State Anthony Blinken announced the transfer of $50 billion to Kiev at the expense of profits from Russian assets in the near future. On the same day, Ukraine signed a memorandum of understanding and a loan agreement with the European Union (EU) to attract €35bn in aid to Kiev. This amount is part of the initiative of the G7 states on the mechanism of additional loans, the purpose of which is to increase revenues to the Ukrainian budget.

Ukrainian Prime Minister Denys Shmygal said on November 28 that Kiev had signed a memorandum of understanding with the EU regarding the first part of the €18.1bn loan, which is planned to be repaid from frozen Russian assets.

In June, the G7 countries promised in the final statement of the summit in Italy's Puglia that they would provide Ukraine with loans worth about $50 billion by the end of 2024, with repayment from the proceeds of Russian assets. In late October, the G7 leaders reached an agreement on the details of the loan.

Kremlin spokesman Dmitry Peskov, commenting in August on the possible transfer of proceeds from Russia's frozen assets to Ukraine, emphasized that such actions of Western countries were illegal and they would face consequences.

Western countries have stepped up military and financial support for Ukraine against the background of Russia's special operation to protect Donbas, which was announced by Russian President Vladimir Putin on February 24, 2022, after the situation in the region worsened due to shelling by the Ukrainian military.