Russia vows to retaliate if EU gives frozen assets to Kyiv; Ukraine hit with overnight drone attack (2024)

A Ukrainian 122-mm self-propelled howitzer 2S1 Gvozdika fires onto Russian positions near the occupied Ukrainian city of Bakhmut on Dec. 18, 2023 in Donetsk Oblast, Ukraine.

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Russia has established "comprehensive" defence cooperation with North Korea as well as continuing its strategic partnerships with India and China, the chief of the Russian General Staff, Valery Gerasimov, told foreign military attaches on Thursday.

Defence Minister Sergei Shoigu visited North Korea in July, Russian President Vladimir Putin hosted a summit with North Korean leader Kim Jong Un in September, and there have been other exchanges.

The United States and its allies have voiced concern that Kim could provide weapons and ammunition to Russia to help replace stocks used in its war in Ukraine, and South Korean lawmakers said Russia had helped Pyongyang launch a reconnaissance satellite a month ago.

"The course towards developing a comprehensive strategic partnership with China and India continues. Active, comprehensive cooperation has been established with the DPRK," Gerasimov said in a year-end address, using an official abbreviation for North Korea.

He gave no further details.

The U.S. has said Russia may be helping North Korea to evade Russian-backed U.N. sanctions prohibiting cooperation with Pyongyang, notably in ballistic missile programs and aeronautical engineering.

The Kremlin said the allegation was "absolutely unfounded".

— Reuters

Three Ukrainian civilians were reportedly killed and five were wounded in Russian aerial stikes on mines in Toretsk, an indudustrial city in the Donetsk region.

Ukraine's Minister of Internal Affairs Ihor Klymenko said on the Telegram app that two bombs hit one mine, killing one, while 32 miners who were underground were rescued. Klymenko said two more bombs hit another mine, killing two, while administrative buildings and equipment were damaged.

CNBC has not independently verified the reports.

— Jenni Reid

Ukraine received the final 1.5 billion euro ($1.65 billion) installment from the European Union's $18 billion 2023 funding package, Prime Minister Denys Shmyhal said Thursday, adding that he hoped support would continue into 2024.

"Today we have received the last 1.5 billion euros of the 18 billion euro financial aid package. Hope for continued unwavering support from the EU," Shmyhal said in a social media post.

Ukraine has been heavily dependent on internal support to prop up its economy and bolster its war efforts since Russia launched its full-scale invasion in February 2022.

Next year, it hopes to receive a further $18.5 billion from the EU and more than $8 billion from the U.S., though votes on both packages have been delayed until January amid pushback from certain corners.

Hungary's Prime Minister Victor Orban said Thursday that EU funding to Ukraine should not be granted from the bloc's budget and that a "sensible" timeline should be set for any further support.

— Karen Gilchrist

Russia on Thursday vowed to retaliate in kind if the European Union moved ahead with plans to hand profits generated from Russia's frozen assets to Ukraine.

"We also have enough assets that are frozen here, in type-C accounts," Finance Minister Anton Siluanov said in an interview with state TV network Russia 24.

"The figures are not small, the income from using these funds is substantial and can certainly also be used if a decision is made by our unfriendly partners," he said.

The EU is considering reallocating income generated from around $300 billion of frozen funds from Russian central bank reserves, amid mounting pressure to help support Ukraine's war-torn economy.

On Wednesday, German prosecutors said they would move to confiscate more than 720 million euros ($790 million) from the Frankfurt bank account of a Russian financial institution — a move Russian Foreign Minister Sergei Lavrov equated to theft.

— Karen Gilchrist

The White House believes Russian troops are waiting for the ground to freeze over in order to intensify offensive operations around the war hotspot of Avdiivka in eastern Ukraine.

"We have seen that the Russians are ... and continue to intend to want to conduct offensive operations, particularly in the east around this place called Avdiivka," National Security Council Coordinator for Strategic Communications John Kirby told reporters Wednesday.

"We have every reason to believe that as the ground freezes towards the end of January and into February, that will make it easier for Russians, Russian forces to go on the move," he added.

Russian and Ukrainian sources continue to report on the impacts of challenging weather conditions on offensive and reconnaissance operations throughout the front, analysts at the Institute for the Study of War note, "even as reported freezing and snowy winter conditions in eastern Ukraine offer the prospect of better conditions for manoeuvre."

Russian forces are conducting offensive operations around Avdiivka in a bid to wrestle control of the strategically-placed town in Donetsk from Ukraine.

"Ukrainian defenders continue to restrain the enemy who does not abandon attempts to surround Avdiivka," Ukraine's military said in a Facebook update Thursday, adding that Ukrainian forces were inflicting steep losses on Russian units. CNBC was unable to immediately verify the claims.

— Holly Ellyatt

"Every day, regardless of whether it is an anniversary or not, I feel pain about the captivity of my only son," Ukrainian Natalya Latiy told CNBC.

She hasn't seen her son Dmytro, or "Dimka" as she calls him, since the summer of 2022. Dmytro was born into a military family and dreamed of military service from a young age. Since 2018, he had been serving in the Marine Corps in Mariupol in southern Ukraine.

During the siege of Mariupol in the months after Russia's invasion of Ukraine in Feb. 2022, Dmytro was captured in one of the city's steelworks. His mother Natalya heard of his capture in October 2022 from a released soldier who had been in the same cell as Dmytro. She has not heard of or from him since, however.

"It is hardest for me on his birthday, when memories of his past happy life reappear, how he grew up, how he was brought up," Natalya said.

Dmytro is just one of an estimated 4,000 Ukrainians who are still being held as prisoners of war in Russian detention facilities. Around 2,000 of them are known as the "Defenders of Mariupol" in Ukraine, and are seen as heroes for their efforts and sacrifice in trying to defend the city before it fell to Russian forces.

The families of many POWs have no idea of the wellbeing of their loved-ones in Russian custody and are demanding more action from the government in Kyiv after prisoner exchanges with Russia stalled in summer. .

Read more on the story here: 'I am a mother and cannot bring my son home': Thousands of Ukrainian POWs are missing months after capture

— Holly Ellyatt

The Kremlin has collated a list of about 30 companies in which it has a stake for potential privatization, Russian Finance Minister Anton Siluanov said Thursday in an interview on state-owned TV channel Russia 24.

The companies involved were not immediately disclosed.

"The Ministry of Finance has made proposals to the government in large companies where the state's share is more than 50%, and proposed reducing the share without losing a controlling stake," Siluanov said.

"There are around 30 large companies where it is possible to consider lowering the state's share and replacing it with private business."

Siluanov said that private shareholders would reduce costs and incentivize companies to be more profitable.

— Karen Gilchrist

Ukraine's air force said Thursday that it shot down 34 out of 35 Russian drones launched overnight on 12 Ukrainian regions.

Russia launched Iranian-made Shahed drones in several waves from about 8:00 p.m. local time to 3:30 a.m., the air force said in a post on Telegram.

The regions affected were Kyiv, Dnipropetrovsk, Vinnytsia, Cherkasy, Kherson, Zaporizhzhia, Mykolaiv, Khmelnytskyi, Sumy, Poltava, Chernihiv and Kirovohrad.

There were no immediate reports of major damage or casualties.

— Karen Gilchrist

Former TV journalist Yekaterina Duntsova put her name forward onWednesday to stand in a Russian presidential election in March that Vladimir Putin is expected to win by a landslide.

Duntsova, 40, called in an interview with Reuters last month for an end to the conflict in Ukraine and the release of political prisoners including opposition leader Alexei Navalny.

She submitted documents to officials at the Central Electoral Commission to formally enter the election in which Putin's victory is widely seen as a foregone conclusion by supporters and opponents alike.

Putin, 71, has been in power as president or prime minister since 1999 and is seeking another six-year term. With Navalny serving prison sentences totalling more than 30 years and other leading Kremlin critics either behind bars or outside the country because of the risk of arrest, there is no established opposition figure to challenge him.

Navalny's supporters call the election a sham, saying the Kremlin controls who can run and can easily manipulate the vote if needed with the help of an opaque electronic voting system. The Kremlin says Putin will win because he enjoys overwhelming public support, with opinion poll ratings of around 80%.

Duntsova's next hurdle will be to gather 300,000 signatures in support of her candidacy from all across Russia, with a deadline of Jan. 31.

Putin announced earlier this month that he would run, but no other candidate has formally applied so far. Those backed by a political party only need 100,000 signatures.

In her interview with Reuters, Duntsova avoided using the word "war" to describe the Russia-Ukraine conflict, which Putin calls a "special military operation", and acknowledged she was afraid.

"Any sane person taking this step would be afraid - but fear must not win," she said.

— Reuters

The U.S. Treasury said it would tighten enforcement of its price cap on Russian oil by increasing actions targeting shipowners and vessels that transport Russian crude being sold above the $60 per barrellevel.

The cap is a joint initiative between Western allies which seeks to curb Russia's ability to fund the war in Ukraine. It sees countries signed up to the cap restrict access to financial and professional services to those transporting seaborne crude trading above the cap.

However, some have argued it requires greater enforcement following signs of ships evading the cap.

Urals crude is currently trading at a five-day average of $59.48 a barrel, according to Neste data, but has mostly been above the cap through the summer and fall.

The U.S. said it was updating its guidance on implementing the cap,and "designating [as sanctioned] a Government of Russia-owned ship manager as well as several obscure oil traders who have emerged as frequent participants in the seaborne transportation of Russian-origin oil following the imposition of the price cap."

— Jenni Reid

Kremlin calls Ukraine peace plan 'absurd,' U.S. says it will tighten Russian oil price cap enforcement