The Ukraine war: how Europe pays for it and polices it
Europe funds Ukraine with the interest on Russian reserves it has chosen not to confiscate, and polices Russian oil by checking a tanker's flag rather than its cargo. Both instruments were built narrow on purpose, and how far each may be stretched is disputed.
Europe funds Ukraine with the interest on Russian money, not with the money. Russian central bank reserves sit immobilised inside the EU, and the cash balances they throw off pile up at the institutions holding them. The Council decided that those net profits should go to Ukraine, on the ground that the cash does not belong to Russia. The reserves themselves were never confiscated. Council Regulation 2025/2600 of 12 December 2025 calls its own prohibition on transfers temporary, reversible and under periodic review.
At sea the instrument is a list. The EU designates the tankers of Russia's shadow fleet, 41 more in July 2026. A designation shuts a ship out of EU ports. It gives nobody the right to stop one. The power to board came from another mandate. Irini, the EU's Mediterranean mission, has gathered information on oil smuggling since 2020. In March 2026 it was authorised to exercise the right of visit for flag verification under Article 110. The frigate that boarded the Toa Payoh in August served with Irini.
Why this matters now is visible in one night. On 5 August 2026 Russia fired 24 ballistic missiles, four other missiles and 115 drones at Kyiv and its region, Ukrainian authorities said. Ukrainian defences stopped none of the missiles, and 17 people died. Zelenskyy said deliveries of defensive missiles in the first half of 2026 had fallen to a third of the 2025 level. On 30 July an object had come down in a field in Poland, and Donald Tusk said everything pointed to a Russian cruise missile.
Both instruments are contested at their edge. The Commission says pressure is working and loopholes are closing. Henning Jessen, writing in December 2025, argues the law of the sea is less accommodating: boarding a foreign-flagged ship to enforce sanctions that only some states apply is generally illegal. He allows that the convention's narrow exceptions can justify one, and flag verification is among them. On the money, the European Council agreed a 90 billion euro loan against its own budget rather than touch the reserves.
What is unresolved is what happens when the careful version stops working. Nobody has said how a flag state that refuses a boarding would be answered. Nobody has priced the reversal either: the regulation sets its own conditions for ending the freeze and calls the prohibition reversible. Meanwhile Russia is sourcing capacity outside the perimeter sanctions reach. Ukraine's military intelligence says a North Korean missile unit is deploying to the Voronezh region, and that Russia expects 120 ballistic missiles, a number not yet settled.
”It is very important for our partners to understand that delays in supplying them, or a reluctance to hand over anti-ballistic systems, lead directly to such horrific casualties and destruction.”
The numbers
What the comparison shows
Where they agree
None of the voices here wants the immobilised reserves returned to Russia while the war lasts, the proceeds sent anywhere but Ukraine, or the shadow-fleet tankers left alone. That Ukraine's shortage of ballistic interceptors is decisive is said by everyone here who addresses it, from Zelenskyy to Rob Lee.
Where they split
The disagreement is about how far each tool can be stretched. The Commission points to tighter enforcement; Henning Jessen, writing on the law of the sea in December 2025, held that boarding ships to push through unilateral sanctions is generally unlawful and that the effort belongs on the money instead. The EU took a third route and boards on a ground Article 110 does list, suspicion of a false flag. In Washington the line runs through a different tool: Senator Maggie Hassan backs sanctions but argues that tariffs on Russia's oil buyers are paid by Americans without helping Ukraine.
What nobody is saying
Two things go unsaid. The first is that the 90 billion euro loan is European debt, repaid by Ukraine only once Ukraine itself receives reparations, which means the Union has already taken the risk onto its own budget. The second is that the regulation itself calls the freeze reversible and names the conditions for lifting it, which means the reserves are not gone, only held. Beyond that sits the unanswered question of what happens when a flag state refuses a boarding.
Who says what
The Commission's line: the instrument is pressure. Each new package closes loopholes and tightens enforcement, and the aim is to force negotiations, not to seize anything.
”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.
Boarding ships to enforce unilateral sanctions has no basis in the law of the sea, and bilateral deals with flag states would take years and still not cover the thirty or more registries the shadow fleet moves between. Better to follow the money and hit the firms that service the ships. He was writing in December 2025, before the EU's flag-verification mandate, and he expressly counts the convention's own narrow exceptions as a possible ground for interference.
”Thus, interfering with freedom of navigation, especially boarding a foreign-flagged ship, to enforce unilateral sanctions legislation is generally illegal.”Thus, interfering with freedom of navigation, especially boarding a foreign-flagged ship, to enforce unilateral sanctions legislation is generally illegal.
The money is counted in interceptors, and they arrive too slowly. He says supplies of defensive missiles have fallen to a third of last year's level, and that ballistic interceptors could have saved the people killed on 5 August.
”It is very important for our partners to understand that delays in supplying them, or a reluctance to hand over anti-ballistic systems, lead directly to such horrific casualties and destruction.”It is very important for our partners to understand that delays in supplying them, or a reluctance to hand over anti-ballistic systems, lead directly to such horrific casualties and destruction.
At the edge where the war touches NATO territory, Warsaw chooses investigation over escalation. Tusk went to the crater outside Lublin himself and pointed to a Russian Kh-101, but refused to draw conclusions before the inquiry. NATO meanwhile called the object a Russian missile of unknown type.
”Everything points to it being a Russian Kh-101 cruise missile, but we do not wish to pre-empt the results of a thorough investigation.”Everything points to it being a Russian Kh-101 cruise missile, but we do not wish to pre-empt the results of a thorough investigation.
He calls the North Korean resources a significant threat to Kyiv: any increase in the quantity of ballistic missiles Ukraine faces poses a greater challenge. His particular worry is the state of the air defences by winter, when Russia could again target the power grid.
”Ballistic missile defence is one of Ukraine's greatest vulnerabilities”Ballistic missile defence is one of Ukraine's greatest vulnerabilities
Al Jazeera relays a post by Hassan on X in which she says she supports sanctioning Russia but does not think tariffs, which on her account are paid for by American businesses and consumers, will help Ukraine win. We did not find the post itself, so no words are quoted verbatim. The bill passed the Senate 86 to 12 and can then proceed to the House of Representatives, which is in summer recess.
Our coverage
- Lithuania warns Russia may stage a false-flag attack using Ukrainian dronesFriday, 7 August 2026
- Sweden to hand a seized shadow-fleet ship over to UkraineFriday, 7 August 2026
- Ankara urges Russia and Ukraine to safeguard Black Sea shipping after drone strike on Turkish-operated vesselThursday, 6 August 2026
- EU channels 1.4 billion euros in frozen Russian asset profits to UkraineThursday, 6 August 2026
- Russian barrage kills 17 in Kyiv region as Ukraine's air defences fall shortThursday, 6 August 2026
- North Korean missile unit deploying to western Russia, Ukrainian intelligence saysThursday, 6 August 2026
- Swedish Foreign Ministry summons Russia's chargé d'affaires over attacks on civilian targets in UkraineWednesday, 5 August 2026
- Ukrainian drones hit Russian warehouses, five killed in the Moscow regionTuesday, 4 August 2026
- Heavy attacks both ways: 16 killed in Russia and 11 in UkraineMonday, 3 August 2026
- Italian navy boards a sanctioned shadow-fleet tanker west of PantelleriaSunday, 2 August 2026
- Nine killed in missile strikes on Kyiv as Ukrainian drones sink a Russian-owned container shipSaturday, 1 August 2026
- The Senate's Russia bill opens the way to 100 percent tariffs on China, India and TürkiyeFriday, 31 July 2026
- Russian missile came down in Poland during the overnight barrage on UkraineThursday, 30 July 2026
- Zelenskyy at the White House as the Iran war and the Ukraine war convergeTuesday, 28 July 2026