US, NATO developing novel funding mechanism for Ukraine weapons transfers

WASHINGTON: The US and NATO are working on a novel approach to supply Ukraine with weapons using funds from NATO countries to pay for the purchase or transfer of US arms, according to three sources familiar with the matter.

The renewed transatlantic cooperation on Ukraine comes as US President Donald Trump has expressed frustration with Moscow’s ongoing attacks on its neighbor.

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Trump, who initially took a more conciliatory tone toward Russia as he tried to end the more than three-year war in Ukraine, has threatened to start imposing tariffs and other measures if Moscow shows no progress toward ending the conflict by August 8.

The president said last month the US would supply weapons to Ukraine, paid for by European allies, but did not indicate how this would be done.

NATO countries, Ukraine, and the United States are developing a new mechanism that will focus on getting US weapons to Ukraine from the Priority Ukraine Requirements List, known under the acronym PURL, the sources said.

Ukraine would prioritise the weapons it needs in tranches of roughly $500 million, and NATO allies – coordinated by NATO Secretary General Mark Rutte – would then negotiate among themselves who would donate or pay for items on the list.

Through this approach, NATO allies hope to provide $10 billion in arms for Ukraine, said a European official, speaking on condition of anonymity. It was unclear over what timeframe they hope to supply the arms.

“That is the starting point, and it’s an ambitious target that we’re working towards. We’re currently on that trajectory. We support the ambition. We need that sort of volume,” the European official said.

A senior NATO military official, also speaking on condition of anonymity, said the initiative was “a voluntary effort coordinated by NATO that all allies are encouraged to take part in”.

The official said the new scheme included a NATO holding account, where allies could deposit money for weapons for Ukraine, approved by NATO’s top military commander.

NATO headquarters in Brussels declined to comment. The White House, Pentagon, and Ukrainian embassy in Washington did not respond to requests for comment.

Russian forces are gradually advancing against Ukraine, and control one-fifth of Ukraine’s territory.

If a NATO country decides to donate weapons to Ukraine, the mechanism would allow that country to effectively bypass lengthy US arms sales procedures to replenish its own stocks, said one US official, speaking on condition of anonymity.

Money for the arms would be transferred into a US-held account, possibly at the US Treasury Department, or to an escrow fund, although the exact structure remains unclear, the official said.

The new mechanism would be in addition to the United States’ own effort to identify arms from US stockpiles to send to Ukraine under the Presidential Drawdown Authority, which allows the US president to draw from current weapons stocks to help allies in an emergency.

At least one tranche of weapons for Ukraine is currently being negotiated under the new mechanism, two sources said, though it was unclear if any money has yet been transferred.

Trump’s fellow Republicans in Congress have introduced legislation, known as the PEACE Act, that aims to create a fund at the US Treasury in which allies can deposit money that would pay to replenish US military equipment donated to Ukraine.

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Ukraine’s needs remain consistent with previous months – air defenses, interceptors, systems, rockets, and artillery.

The last statement of need from Ukraine came in a July 21 video conference of the country’s allies, known as the Ramstein group, now led by Britain and Germany.