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God Morgon

Geopolitics · Europe · Sweden · Türkiye · the economy
Background

How Europe pays for Ukraine, what it may do at sea, and what Washington would add

Europe funds Ukraine with the interest on Russian reserves it has chosen not to confiscate. At sea it uses a different instrument: a flag check under Article 110, which lets a warship stop a tanker but not keep it. In August the US Senate voted for a third route, tariffs on countries that buy Russian oil.

Russia's frozen reserves have thrown off 8 billion euros in interest, on the Commission's count, and 1.4 billion of it was paid over on 3 August 2026. On 2 August an Italian warship boarded a sanctioned tanker west of Pantelleria and checked its flag.
How Europe pays for Ukraine, what it may do at sea, and what Washington would add

The Russian money Europe spends on Ukraine is interest. The reserves themselves stay frozen. Central Bank of Russia assets sit immobilised inside the EU, and the cash they throw off as the securities mature builds up at the depositories holding them. The Commission says that interest does not belong to Russia, and the Council decided the net profits should go to Ukraine. On 3 August 2026 the EU received 1.4 billion euros of it, the fifth such transfer, taking the total since immobilisation to 8 billion on the Commission's count.

Ninety-five percent of that money goes through the Ukraine Loan Cooperation Mechanism, which helps Ukraine repay debt it already owes: the EU's macro-financial assistance loan and the G7 ERA loans. The other 5 percent goes to the European Peace Facility. The 90 billion euro loan the European Council agreed in December 2025 is separate borrowing. Its first instalment of 3.2 billion euros was paid on 25 June 2026, and Ukraine repays it only once it receives reparations. The Council calls the freeze on the reserves themselves temporary and reversible.

The EU's 21st sanctions package, adopted on 23 July 2026, listed 41 more ships on top of 632, and the criteria now reach ships that service listed ones. A listing shuts a vessel out of EU ports and services. At sea it stops nothing. Going aboard is the work of EUNAVFOR MED Irini, launched in 2020 to enforce the UN arms embargo on Libya. In March 2026 the EU gave the mission a new job, checking tankers' flags, and it boarded its first tanker in early May.

Article 110 of the UN Convention on the Law of the Sea does not allow boarding to enforce sanctions. It allows boarding only on reasonable suspicion of piracy, the slave trade, unauthorised broadcasting, statelessness, or a ship really of the warship's own nationality. Miro Sedlák, writing for the Center for European Policy Analysis, calls a quarrel over nationality the surest hook the law offers. A tanker Cameroon had struck off its registry was stateless when it was boarded, and any warship may board a stateless ship.

On 2 August 2026 an Italian warship in the mission boarded the Cameroon-flagged Toa Payoh, and Italy's defence ministry says the boarding complied with Article 110. Sedlák puts Russia's oil earnings in June 2026 above 10 billion euros a month, which listings have not yet meaningfully cut. The US Senate aimed at the same revenue on 7 August 2026, passing a sanctions bill 86 to 11 and opening the way to tariffs on Russian oil's biggest buyers. The Senate amended it first, so the bill goes back to the House.

”Article 110 gives a legal cause to act, but it does not give the right to confiscate a ship or try its crew.”
Miro Sedlákassociate research fellow, Institute for Central Europe

The numbers

The freeze, in the EU's own words
Council Regulation 2025/2600 of 12 December 2025, adopted under Article 122(1) of the Treaty on the Functioning of the European Union, prohibits any transfer of Central Bank of Russia assets and reserves. Recital 26 says the accumulated cash balances do not belong to the bank and are not sovereign assets, and that the prohibition on transfers is temporary, reversible and under periodic review. Article 6 says the measures cease to apply once Russia ends its war of aggression, provides Ukraine with reparations sufficient for reconstruction, and no longer poses a serious risk to the Union's economy.
EUR-Lex
The loan Europe took out
€90bn
In December 2025 the European Council agreed a 90 billion euro limited-recourse loan to Ukraine for 2026 and 2027, financed by EU capital market borrowing and backed by the EU budget headroom, to be repaid by Ukraine only once Ukraine itself receives reparations. The first instalment, 3.2 billion euros, was disbursed on 25 June 2026.
European Commission
The fifth transfer of the interest
€1.4bn
On 3 August 2026 the EU received 1.4 billion euros in interest on the cash balances arising from immobilised Central Bank of Russia assets. It was the fifth such transfer and covers the first half of 2026. The Commission states that since immobilisation the assets have generated 8 billion euros in all. 95 percent goes through the Ukraine Loan Cooperation Mechanism, which helps Ukraine repay the EU's macro-financial assistance loan and the loans G7 lenders made under the ERA initiative. The other 5 percent goes to the European Peace Facility.
European Commission
What a shadow-fleet listing does
+41 ships, July 2026
The EU's 21st sanctions package, adopted on 23 July 2026, listed 41 more vessels on top of the 632 already sanctioned. The measure is a ban on access to EU ports and a ban on receiving services. The listing criteria were widened at the same time to reach, for the first time, ships that provide services to the listed vessels.
European Commission
What Article 110 allows
Under Article 110 of the UN Convention on the Law of the Sea, a warship meeting a foreign ship on the high seas is not justified in boarding it unless there is reasonable ground to suspect piracy, the slave trade, unauthorised broadcasting, that the ship is without nationality, or that it is really of the same nationality as the warship. Sanctions enforcement is not among those five. The article does not govern interference deriving from powers conferred by treaty. Once a ground applies, the warship may verify the ship's right to fly its flag, and the article gives it no power to seize the ship.
United Nations
The mission that does the boarding
EUNAVFOR MED Irini was launched on 31 March 2020 to implement the UN arms embargo on Libya. One of its four original tasks was gathering information on oil smuggling. Council Decision 2025/488 of 11 March 2025 extended the mandate to 31 March 2027 and added maritime situational awareness. In March 2026 the mission was authorised to exercise the right of visit for flag verification under Article 110. Its first such boarding, in early May 2026, was on a tanker suspected of sailing under a false flag; it inspected the documents and reported what it found to the EU authorities.
EUNAVFOR MED Irini
The boarding of the Toa Payoh
The Italian navy ship Thaon di Revel, serving with the EU's Operation Irini, boarded the Cameroon-flagged tanker Toa Payoh in international waters west of Pantelleria on Sunday 2 August 2026. The ship is under EU sanctions and is counted as part of Russia's shadow fleet. The Italian defence ministry's account says the boarding was carried out in full compliance with Article 110, took about two hours and had support from a Greek ship and a Polish patrol aircraft. The master did not cooperate at first, so an Italian team reached the vessel by helicopter. The account does not say which of the article's grounds applied.
Euronews
What the US Senate passed
86 to 11
On 7 August 2026 the United States Senate passed H.R. 5334, titled "An act to impose sanctions and other measures with respect to the Russian Federation, as championed by the late Senator Lindsey O. Graham, and for other purposes", by 86 votes to 11, with three senators not voting. The Senate passed it as amended, so the text it approved is not the text the House passed. Maggie Hassan of New Hampshire voted no.
United States Senate

What the comparison shows

Where they agree

All three want Russia squeezed harder. Albuquerque's Commission keeps adding sanctions packages, Sedlák's complaint about the boardings is that they achieve too little rather than too much, and Hassan, who voted against the Senate bill on 7 August, says she supports sanctioning Russia.

Where they split

The Commission's case rests on what Russia has spent: more than two thirds of the liquid assets in its sovereign wealth fund have gone since the war began, on the Commission's own count. Sedlák's case rests on what Russia still earns from oil, and on the tankers that sail away after a boarding. Hassan is arguing about a third thing, who pays for the American tariffs.

What nobody is saying

When Euronews reported the boarding, the Italian authorities were still going through the Toa Payoh's documents, and nothing here says what happens to the ship next. Sedlák's charge, that nobody has built the legal grounds needed to keep a boarded tanker, gets no answer from the Commission, whose 21st-package announcement does not mention boarding at all.

Who says what

Maria Luís Albuquerque, European Commissioner for Financial Services and the Savings and Investments Union

Each package closes loopholes and tightens enforcement. Her Commission's account of the 21st package says more than two thirds of the liquid assets in Russia's sovereign wealth fund have been run down since the war began, and calls the Russian economy the weakest it has been since the war started.

”Our objective remains unchanged, to bring Russia towards meaningful negotiations and help create the conditions for a just and lasting peace for Ukraine.”Our objective remains unchanged, to bring Russia towards meaningful negotiations and help create the conditions for a just and lasting peace for Ukraine.
Source: European Commission · Thursday, 23 July 2026
Miro Sedlák, associate research fellow, Institute for Central Europe

French, British, Swedish and Finnish boarding parties have all taken control of shadow-fleet tankers, and most of the ships were freed shortly afterwards. One of them, the Boracay, was released within days and by June 2026 carried Russian crude under a new name. Sedlák calls the operations tactical rather than strategic, and says what is missing is the will to build durable legal grounds for condemning the ships and their cargo.

”Article 110 gives a legal cause to act, but it does not give the right to confiscate a ship or try its crew.”Article 110 gives a legal cause to act, but it does not give the right to confiscate a ship or try its crew.
Source: CEPA · Wednesday, 17 June 2026
Maggie Hassan, United States senator for New Hampshire

Al Jazeera relays a post by Hassan on X: she supports sanctioning Russia, but says she does not think tariffs, which are paid for by American businesses and consumers, will help Ukraine win. Critics of the bill, including her, say it hands the president too much power over tariffs.

Source: Al Jazeera · Friday, 31 July 2026

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