EU leaders support plan to rebuild Ukraine with frozen Russian assets – Bloomberg

The European Union's leaders backed the plan to utilize the Central Bank of the Russian Federation's frozen assets to benefit Ukraine, including levying an income tax on them.

Rubryka reports this with reference to Bloomberg and Reuters.

EU leaders are supporting a proposal to implement a tax on profits from Russian central bank assets worth over 200 billion euros to help reconstruct Ukraine.

Now they want support from the G7 countries.

Russia's Central Bank's frozen assets are expected to generate an extra 3 billion euros in profits. Most of these assets are in cash and deposits, with the remainder in securities that will be converted into cash within the next two to three years.

It is noted that the European Union has already discussed such plans with the United States, and the administration of Joe Biden has been informed of the progress. At the same time, discussions with the US and others will continue in the coming days and weeks.

In addition, Britain has supported the EU plan and is negotiating with the bloc about it.

At the same time, Bloomberg reports that there is a certain legal risk that such a plan could be challenged in court. Some of the publication's sources claim that the interest and profits earned on the funds come from sanctioned assets that ultimately belong to Russia.

The Prime Minister of Belgium, Alexander De Croo, noted that the plan could work if a legal basis for it is found.

He noted that the bloc could not take the assets without jeopardizing the financial system because they are cross-held between central banks.

"The commission is working on it. We have to see the right legal basis for it, but we will coordinate actions between different countries," he said.

For reference:

Ukraine and its allies are creating a format that will allow it to confiscate frozen Russian assets in Europe, the United States, Canada, and other partner states. The allies want to send them to restore Ukraine.

During the US-Ukraine Partnership Forum, US Deputy Secretary of State for Political Affairs Victoria Nuland said that the United States wants to use the frozen assets of the Russian Federation to restore Ukrainian infrastructure.

Bloomberg said the EU is already looking into the steps necessary to seize 200 billion euros of Russian central bank funds that have been frozen. However, they are running into legal obstacles.

At the same time, Germany opposes the transfer of frozen Russian assets to Ukraine due to legal and financial risks.