By John Q. Hosedrinker 
Rheinmetall announced a deal for Ukraine to receive Skyranger 35 short-range air-defense systems mounted on Leopard 1 chassis, funded by an EU member state using frozen Russian assets. The agreement, valued in the “hundreds of millions of euros,” will see production and integration handled in Italy. The Skyranger 35 features a 35 mm automatic cannon, with programmable airburst projectiles, and an effective range of approximately 4,000 meters. Equipped with advanced sensors, the system is designed to counter modern aerial threats, and serve as a modern alternative to the aging Flakpanzer Gepard.
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Ukraine to Receive Skyranger Air-Defense Systems Funded With “Hundreds of Millions” of Seized Russian Assets, and it’s about time! It appears Ukraine is slated to receive these much-needed Skyranger 35 short-range air-defense systems, thanks to funding generated from – and here’s where it gets interesting – the proceeds derived from some of Russia’s frozen assets. It’s important to clarify: the actual assets themselves, the original deposits as it were, haven’t been touched, as far as we know. But the income generated by those assets is being tapped.
This whole situation is, frankly, a long time coming. Many of us have been frustrated by the perceived slow pace of support for Ukraine throughout this conflict. The news that this crucial air defense system is on its way is welcome. These systems, mounted on Leopard 1 chassis, come from Germany’s Rheinmetall, providing Ukraine with a serious boost in its defense capabilities.
Given the state of things, it feels like a strong “yes” to Germany’s contribution. Now, regarding the mechanics of the funding: it seems the financial structure involves loans backed by the Russian assets. Russia can only regain access to these funds by paying back the loans, thereby effectively funding Ukraine’s defense in the process. It’s a clever maneuver, and while the semantics may be debated, the end result is clear: the support is being funded, directly or indirectly, by assets originally belonging to Russia.
There’s some interesting nuance here. It’s like a bank account analogy: if you have $100,000 in an account, and that account is frozen, and some of the interest earned is then used, you still have your original $100,000. The principle is intact. That said, the impact on the overall outcome is still that Russia is effectively losing money via this funding, even if the original asset remains untouched. So, whether you consider it “pedantic” or not, the practical effect is the same.
The distinction between directly using the assets and leveraging the proceeds from them is significant. Direct use could lead to the destruction of assets against the owner’s will, but using the proceeds, while still leveraging the assets against the owner’s will, leaves open the possibility of returning the original undamaged assets. It’s a more complex situation with fewer legal complications.
And while the technicalities of the funding mechanism may spark debate, the ultimate goal remains clear, to support Ukraine. From a practical standpoint, the impact remains the same: support for Ukraine via Russian assets. Regardless of how it is financed, the essential outcome is that it is funded by the proceeds of Russian assets.
It’s worth noting that Europe has, at times, struggled with ramping up the production of some of these new systems. This could be one of the factors contributing to the slower-than-desired provision of aid. However, the fact that these Skyranger systems are on their way is encouraging.
The implications are not quite straightforward, it’s more of a complicated matter. Belgium, for example, is already raising concerns. There’s no established legal precedent in Europe, or a mandate from the UN, for seizing funds or the interest earned on them. There are also legal and ethical considerations to keep in mind.
What’s happening here is complex, and there are different layers. This might ultimately lead to future costs for the EU member states, or raise concerns about the EU’s status as a safe haven for foreign deposits. Ultimately, no one knows for sure how this will shake out. But it’s a reminder that these financial maneuvers are never quite as simple as they initially seem.