Immobilized reserves are a central bank's foreign exchange reserves that other governments have blocked under sanctions, so the owner cannot transfer, sell or otherwise use them. The assets still legally belong to the central bank, and interest or coupons may keep accruing, but every transaction is prohibited. The term is most closely tied to the reserves of the Central Bank of the Russian Federation, frozen by Western countries after Russia's full-scale invasion of Ukraine in February 2022.
Immobilization is different from confiscation. A frozen asset can in principle be released when sanctions end, while confiscation transfers ownership for good. It also differs from civil asset forfeiture, which targets private property linked to crime. Because central bank property normally enjoys strong immunity under international law, what can lawfully be done with immobilized reserves has become one of the most debated questions in international finance.
Immobilized reserves in plain terms
Picture a safe-deposit box rented at a foreign bank. One day the host country's government orders the bank to stop letting the owner open it. The money inside is still the owner's on paper, and nobody has carried it away, but the owner cannot take it out, spend it or move it somewhere else. The key has simply stopped working.
That is what happened to a large part of Russia's national savings in 2022, money it had built up partly to protect the Russian ruble. Most of the money was held as bonds and cash with banks and settlement firms in Europe, North America and Asia. Those countries told their institutions to block it. The box stayed shut, and the debate since then has been about whether anyone may use what grows inside it while it is locked.
How reserves are immobilized
Reserves are rarely kept as cash in the owner's own vault. They are bonds and deposits held through foreign custodians, clearing houses and central securities depositories. That makes them reachable by the laws of the countries where those institutions sit. On 28 February 2022 the European Union banned transactions related to the management of the Russian central bank's reserves and assets, and the United States, United Kingdom, Japan, Canada and Switzerland took similar steps. In the US the measures were applied through the Treasury's Office of Foreign Assets Control (OFAC).
Estimates put the total at about $280 billion to $300 billion, close to half of Russia's pre-war reserves. Most of it ended up in Belgium, at the central securities depository Euroclear Bank. As the frozen bonds matured, they turned into cash that Euroclear could not pay out, and that cash earned interest. Euroclear reported holding about €202 billion of sanctioned Russian assets at the end of June 2026.
Windfall profits and the G7 loans
Western governments separated the question of the principal from the question of the income it generates. In February 2024 the EU required central securities depositories holding more than €1 million of Russian central bank assets to account for the extraordinary cash balances and the resulting net profits separately. In May 2024 it went a step further, requiring Euroclear to pay a financial contribution from those net windfall profits to the Union for Ukraine. The first payment, about €1.5 billion, was made in July 2024, and total transfers had reached about €8 billion by August 2026.
In June 2024 the G7 agreed to bring that future income forward. Under the Extraordinary Revenue Acceleration (ERA) initiative, finalized in October 2024, G7 members committed about $50 billion in loans to Ukraine, to be repaid from the windfall profits rather than from Ukraine's budget. The United States committed $20 billion of the total. The principal itself remained untouched.
Developments since 2025
EU sanctions must normally be renewed by unanimity every six months, which left the freeze exposed to a single veto. On 12 December 2025 the Council adopted Regulation (EU) 2025/2600, based on the emergency powers in Article 122 of the Treaty on the Functioning of the EU, banning any transfer of the assets back to Russia with no fixed end date. The European Commission had also proposed a "reparations loan" that would have lent Ukraine the cash balances themselves. On 18 December 2025 the European Council chose instead a €90 billion loan for 2026 and 2027 funded by EU borrowing, while keeping the assets immobilized and reserving the right to use them to repay that loan.
The Bank of Russia has fought back in court. It challenged the December 2025 regulation before the EU General Court in February 2026, and in May 2026 a Moscow arbitration court ruled in its favour against Euroclear; Euroclear's appeal was dismissed in July 2026, and it contests the rulings. As of late 2026 the reserves remain frozen, not confiscated, in the EU.
Legal and economic debate
Supporters of tougher measures argue that Russia owes compensation for war damage and that using its assets is a lawful countermeasure. Critics, including Belgium and some central banks, raise several concerns:
- Sovereign immunity. Central bank assets are usually protected from seizure, and weakening that protection could invite legal challenges and retaliation.
- Financial stability. A depository holding the assets could face claims it cannot meet, and other countries might move reserves away from European or US custodians.
- Reserve diversification. The freeze has pushed some central banks to reconsider which reserve currencies they use and to buy more monetary gold, which can be kept at home.
For reserve managers, the episode added legal and political risk to the classic concerns of reserve management, and it is now a standard stress scenario. It also sharpened interest in secondary sanctions risk for firms dealing with sanctioned states and in robust sanctions screening by custodians.