US Allocates $20bn to Ukraine Using Seized Russian Funds Amid Shift in Leadership

The United States has transferred $20 billion to Ukraine, financed by assets seized from Russia, as part of a broader $50 billion aid package. This infusion of support is crucial as Ukraine faces challenges on the battlefield, with a change in US leadership on the horizon that may affect future aid.

The United States has recently provided $20 billion (£15 billion) in financial aid to Ukraine, using profits generated from assets seized from Russia. This funding forms a substantial portion of a $50 billion (£39 billion) assistance program established by G7 nations, announced back in June. US Treasury Secretary Janet Yellen emphasized that utilizing frozen assets allows Russia to shoulder the financial repercussions of its ongoing military actions instead of American taxpayers.

The decision comes just weeks before US President Joe Biden is set to hand over the reins to Donald Trump, who has indicated his intention to accelerate the conclusion of the Ukraine conflict. Trump’s administration has previously characterized financial assistance to Ukraine as a burden on American resources, thereby raising uncertainties about the continuation of such support under his leadership.

On Tuesday, the US Treasury confirmed the allocation of the $20 billion to a fund managed by the World Bank, from which Ukraine can access the funds. However, it is crucial to note that these resources cannot be utilized for military expenditures. Initial hopes were to allocate a portion of this money for military assistance, according to reports from Reuters, but this would necessitate Congressional approval—a process that has encountered significant delays amid ongoing political disputes in the House of Representatives.

Yellen remarked that this financial injection would provide a "critical infusion of support" for Ukraine as it combats "an unprovoked war of aggression." The deployment of this aid follows numerous discussions among the US and its allies, including the European Union, regarding the appropriate utilization of approximately $325 billion (£276 billion) in assets that have been frozen since the onset of Russia's full-scale invasion in 2022.

In October, the G7 reached an agreement to leverage the interest accrued from these frozen assets—estimated at roughly $3 billion (£2.4 billion) annually—to fund the aforementioned $50 billion in credit over a span of 30 years, with payment processes anticipated to commence by the year's end. The EU has similarly pledged more than €18 billion (£15 billion) through comparable funding mechanisms.

This latest financial assistance is particularly timely for Ukrainian President Volodymyr Zelensky, as his forces have recently been losing ground; reports indicate Moscow has been regaining territory in eastern Ukraine and around Russia’s Kursk region, a site previously targeted by Ukrainian offensives.