Tokyo refuses Brussels’ request to join plan on Russian sovereign assets

Japan has rejected the EU’s request to join its initiative to use frozen Russian state assets to fund Ukraine, undermining Brussels’s effort to secure broader international backing for the plan.

According to two EU diplomats cited by POLITICO, Tokyo conveyed its position during the December 8 meeting of G7 finance ministers, where it dismissed a proposal that Japan replicate the EU’s approach of providing Ukraine with the cash value of Russian sovereign assets held in Euroclear, the Belgian financial institution.

Japan indicated that it cannot use approximately $30 billion worth of frozen Russian assets located in Japan to issue a loan to Ukraine. The EU had hoped that Japan, along with the U.S., would participate in a coordinated effort to unlock the value of immobilised Russian reserves.

The European Commission is pushing EU member states to finalise an agreement before the December 18 leaders’ summit on how to use up to €210 billion in frozen Russian sovereign assets. However, Belgium remains hesitant, fearing it could be solely responsible for repaying the entire amount should Russia attempt to reclaim the funds. Brussels has therefore insisted that other G7 countries also extend loans to Ukraine, backed by the Russian assets they hold.

Belgian Prime Minister Bart De Wever has stressed that broader participation by G7 partners would spread the risk and reduce the likelihood of Russia retaliating exclusively against Belgium.

But both the U.S. and Japan have declined to join the EU’s model, leaving Brussels increasingly isolated as it attempts to secure long-term financing for Ukraine.

During the G7 meeting, the U.S. informed its partners that it will halt financial support for Ukraine once it completes the final disbursements of a G7-wide loan arranged under the Biden administration in 2024, an EU diplomat said.

Ukraine, already struggling under wartime conditions, is facing a projected budget deficit of €71.7 billion in 2026 and may be forced to begin cutting public expenditures as early as April if new funding does not materialise.

In their joint statement following the meeting, G7 finance ministers said they would continue working on “a wide range of financing options” to support Ukraine, including exploring ways to use “the full value of Russian Sovereign Assets, immobilised in our jurisdictions until reparations are paid for by Russia.” But they cautioned that any action must remain “consistent with our respective legal frameworks.”

Japanese Finance Minister Satsuki Katayama has firmly ruled out using frozen Russian assets due to legal constraints, according to an EU diplomat briefed on the discussions. However, several officials noted that Japan’s position is closely aligned with the stance of the United States, suggesting Tokyo is reluctant to diverge from its most important strategic ally.

U.S. President Donald Trump has signalled that he intends to use the Russian assets not to finance Ukraine directly but to pressure Vladimir Putin into negotiations. Washington has floated a proposal to return a portion of the assets to Russia while using the remainder to fund U.S.-backed investment projects in Ukraine.

Despite differing approaches among G7 partners, European Commission President Ursula von der Leyen reiterated her support for deploying Russian frozen assets to help Ukraine during a meeting on Monday with President Volodymyr Zelenskyy. The meeting was also attended by British Prime Minister Keir Starmer, French President Emmanuel Macron, and German Chancellor Friedrich Merz.

“Our Reparations Loan proposal is complex, but at its core, it increases the cost of war for Russia,” von der Leyen said in a statement. “The longer Putin wages his war, spills blood, takes lives, and destroys Ukrainian infrastructure, the higher the costs for Russia will be.”

Von der Leyen’s position received a boost as both the United Kingdom and Canada signalled they are open to transferring the Russian state assets held in their jurisdictions to Ukraine—provided the EU’s broader plan moves forward.

The issue is expected to feature prominently in upcoming talks between Prime Minister Starmer and Belgian Prime Minister De Wever on December 12.

By Tamilla Hasanova