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If the European Union decides to use Russia's frozen sovereign assets to provide Ukraine with a 'reparations loan,' Moscow may take retaliatory financial measures by using foreign assets frozen in Russia, up to and including the nationalisation and sale of foreign companies. This is stated in a report by the Roscongress Foundation/Institute for the Study of World Markets, published on 29 October.

Recalling that the EU is considering a plan for a 'reparations loan' to Ukraine secured by Russian assets, "which goes beyond the legal boundaries," the report goes on to point out that the decision to impose new sanctions, such as the expropriation of assets, requires the unanimous approval of EU members. "Reaching a consensus on this issue is difficult, among other things due to the need for the European Union as a whole and each member individually to comply with international law," the report says.

One possible option is to issue interest-free bonds. "It is proposed to invest them [the Russian assets] in interest-free bonds issued by the European Commission and guaranteed by EU governments. The EU would then use the money to grant Ukraine a ‘reparations loan’. The plan would be for Ukraine to repay the loan only after receiving military reparations from Russia as part of a peace agreement, which would effectively allow Kyiv to spend the money now," the Foundation writes. However, such a transformation of Russian assets without Moscow's consent could be regarded, if not as confiscation, then as "quasi-confiscation," the report comments.

If the EU manages to reach a political agreement on a reparations loan to Ukraine, the relevant instruments could be adopted as early as spring 2026, and payments could begin next summer, the report suggests. In response to the seizure of its sovereign assets, Russia could file lawsuits, "although the hearings could drag on for years with no clear prospects."

But in addition to legal instruments, Moscow may apply financial countermeasures, the Foundation points out, recalling the Russian president's decree of 30 September 2025, which envisions a mechanism for the accelerated sale of federal property in order to protect national interests. Russia could nationalise and quickly sell off the assets of foreign companies under this special privatisation mechanism, Bloomberg reported earlier.

The Roscongress Foundation believes that if the European Union implements an action plan that bears the hallmarks of expropriating Russian sovereign assets, other countries' attitudes toward holding reserves abroad may change. If foreign investors doubt the security of their European bonds, they could react by selling them, which would increase the cost of borrowing for European governments, the report says. In the future, such investors may opt for gold, the dollar or the yuan, the Foundation expects.