Every mainstream news agency was this week reporting that the European Union is using US$1.6 billion from seized Russian assets "to support Ukraine", focusing on "defence and reconstruction". But it's not true.
The small print of actual statement, not quoted by the media, shows that the European Union is taking the entire sum of money, rightfully belonging to the Russian people, for itself.
SELF-PAYMENT FACILITY
Ninety per cent of the cash actually goes to a fund known as the EPF. This technically stands for "European Peace Facility" but the name is the opposite of what it does: it is a weapons financing operation—for EU self-payment.
European countries take money from the EPC when they want reimbursement for arms and ammunition (often not the best quality) they have already sent to Ukraine.
The remaining ten per cent also goes to the European Union, directly to the EU budget. This money is also earmarked for war purposes, providing weapons for Ukraine to use against Russia.
MONEY 'FOR SUPPLY OF WEAPONS'
However, the EU has said that a fraction of the 10 per cent MAY be diverted to reconstruction if countries don’t want "their share" of the Russian cash used for military purposes.
This allows EU leader Ursula von der Leyen to claim that the money is for Ukraine to use for reconstruction when in fact it will be 95 to 100 per cent used for weapons and military expenses.
The details are clearly outlined in the 21 May European Union statement detailing the forthcoming use of the Russian money. Key sentence:
"In 2024, 90% will be devoted to the supply of military equipment through the assistance measures funded under the EPF and 10% for the EU budget."
The statement quotes EU official Věra Jourová: "This initiative not only aids Ukraine in its recovery but also underscores our commitment to upholding international law and justice." Her title is Vice-President for Values and Transparency.
LOSS OF TRUST
The EU move is fraught with danger. The European Union's population is just six per cent of the world, and many other regions and countries across the globe have expressed dismay at the use of the Russians' money in this way. Saudi Arabia, for example, warned that it would sell some or all of its European debt if the move went ahead, Bloomberg reported.
Other analysts have expressed concern that the EU move would gravely reduce trust in the west, and show the rest of the world that de-dollarization must be speeded up.
by Nury Vittachi
Lai See(利是)
** The blog article is the sole responsibility of the author and does not represent the position of our company. **
Dr. Celeste Lo (Solicitor (Hong Kong), Greater Bay Area Lawyer (PRC), Postdoc Fellow at the School of Law of City University of Hong Kong)
With the release of its latest White Paper, Hong Kong: Safeguarding China’s National Security Under the Framework of One Country, Two Systems, China’s State Council has delineated a comprehensive blueprint for the metropolis’s future. Issued in February 2026, the document provides a granular retrospective on the implementation of the Hong Kong National Security Law and the recently enacted national security laws. Far exceeding a mere policy review, the White Paper serves as a definitive pronouncement on the recalibrated constitutional nexus between the Central Authorities and the Hong Kong Special Administrative Region, firmly establishing national security as the indispensable bedrock of Hong Kong’s enduring prosperity.
The central thesis of the White Paper is unambiguous: security and development are not competing interests, but symbiotic imperatives. The document contextualizes the severe turbulence of 2019 not merely as a localized political dispute, but as an existential vulnerability that challenged the sovereign integrity of the state. From Beijing’s perspective, the ensuing legislative interventions were constitutional necessities, urgently required to seal long-standing statutory loopholes. By restoring social equilibrium and erecting a formidable security architecture, the White Paper contends that the central government has successfully safeguarded the “One Country, Two Systems” framework, insulating it against external subversion and internal destabilization.
A substantial portion of the White Paper is devoted to elucidating the institutional refinement of Hong Kong’s governance apparatus. At the heart of this transformation is the fundamental principle of “patriots administering Hong Kong.” The White Paper details how the reformed electoral framework ensures that the city’s executive and legislative branches remain harmonized to align with the broader national interests. This alignment is championed as a vital corrective to overcome historical political deadlocks, thereby cultivating an efficient, executive-led administration uniquely equipped to resolve entrenched socioeconomic challenges. According to the White Paper, this high-caliber, orderly governance paradigm supersedes partisan gridlock with constructive policy formulation, ultimately advancing the tangible wellbeing of the city’s 7.5 million residents.
Equally salient is the White Paper’s sophisticated overture to global capital. Recognizing Hong Kong’s irreplaceable role as a conduit between the Chinese mainland and the global economy, the White Paper introduces the nuanced concept of “open security”. The document marshals an array of compelling economic indicators, surging GDP growth, premier global IPO rankings, and a proliferation of family offices, to illustrate that capital flourishes within a secure, predictable ecosystem. The central government reaffirms its steadfast commitment to preserving Hong Kong’s distinct institutional advantages, notably its esteemed common law jurisprudence, its enduring status as a free port, and the unimpeded circulation of international capital and data.
Ultimately, the White Paper cements a resilient paradigm for Hong Kong. It explicitly asserts that the “highest principle” underpinning the “One Country, Two Systems” policy is the absolute safeguarding of national sovereignty, security, and developmental interests. Within this recalibrated architecture, the contours of the “Two Systems” are precisely demarcated and robustly shielded by the overarching strength of the “One Country”. By projecting a vision wherein ironclad legal safeguards precipitate an open, dynamic, and globally integrated business ecosystem, the White Paper charts a confident vision for Hong Kong to navigate an increasingly complex global landscape with renewed stability and vigour.
