Ukrainian success at the G7 Summit: use of windfall proceeds from Russian sovereign assets, security pacts with the USA,

The 50th anniversary G7 Summit was held from June 13 to 15, 2024 at Borgo Egnazia in the city of Fasano in Apulia, Italy. Ukrainian President Volodymyr Zelensky attended the gathering among other invited participants. The first day of the event saw the signing of important agreements for Ukraine.

In particular, President Zelensky signed two 10-year security agreements. One is with the United States, signed by President Joe Biden, which reaffirms the unwavering U.S support for Ukraine as it is fighting for its sovereignty and territorial integrity. And that support is not with words only, but with deeds as well, as the document contains a number of specific commitments (see below for details), including new air defense systems.

The second security agreement was signed with the Prime Minister Fumio Kishida of Japan, which addresses security and defense assistance; humanitarian, technical, and financial cooperation; joint work on the implementation of the Ukrainian Peace Formula provisions, sanctions against the Russian Federation and prosecuting Russia’s leadership for the war against Ukraine. Moreover, Japan has committed to provide Ukraine with USD 4.5 billion worth of aid through 2024.

Another decision of importance for Ukraine was a plan announced by G7 leaders to provide Ukraine with USD 50 billion in new financing by bringing forward the interest earned on immobilized Russian sovereign assets held in the European Union and other jurisdictions. Leaders reaffirmed their commitment that Russia’s sovereign assets within G7 jurisdictions will remain immobilized until Russia ends its aggression and pays for the damage it has caused to Ukraine. This new financing will provide critically needed support for Ukraine’s military, budget, and reconstruction needs.

The governments of the United States, United Kingdom and Canada last week issued a sweeping set of new sanctions and export control measures, guided by G7 commitments to intensify the pressure on Russia for its war against Ukraine. Foreign banks now face increased sanctions risk when they deal with Russia’s war economy. New sanctions on more than 300 individuals and entities in Russia, the People’s Republic of China (PRC), and globally target Russia’s financial infrastructure; over a dozen international evasion and procurement networks; Russia’s future energy, metals, and mining revenues; and Russian elites involved in the deportation or so-called re-education of Ukrainian children. The U.S. Administration also announced steps to restrict access to certain U.S. software and information technology services, to crack down on diversion of goods through shell companies, and to more extensively restrict exports to entities that supply Russia with U.S.-branded items produced abroad. This has already affected the ruble’s exchange rate versus the US dollar, which has plummeted to 200 against the dollar from less than 90 the day before.