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2 Dec, 2023 05:10

EU to unveil plan to tap frozen Russian assets – Bloomberg

Some member states and the ECB have raised concerns over confiscating the funds
EU to unveil plan to tap frozen Russian assets – Bloomberg

The European Union may unveil a proposal to tax profits from more than €200 billion ($218 billion) of frozen Russian central bank assets in order to help rebuild Ukraine, Bloomberg reported this week.

A person familiar with the discussions told the outlet that the plan, which is expected to be released on December 12, would clarify that several issues raised by member states still need to be addressed and that the EU proposal will not interfere with national taxes or other measures.

According to other sources cited by Bloomberg, a meeting between national experts and the commission on December 6 will be decisive on whether the differences have been overcome.

For months, the EU has been looking for ways to confiscate the funds, despite numerous warnings that such measures could jeopardize the credibility of the Western financial system and its currencies. The issue has divided the 27-nation bloc, with Belgium, Germany, France, Italy and Luxembourg among those urging a more gradual approach.

The European Central Bank (ECB) vice president, Luis de Guindos, also warned this week that using the funds could have serious reputational implications for Europe’s single currency.

Over €200 billion of Russia’s sanctioned sovereign assets are estimated to have been frozen by the EU, with most of it at the Belgium-based Euroclear clearinghouse. Those funds have reportedly generated nearly €3 billion in profits from the time they were frozen in March 2022 through the third quarter of this year, with the figure projected to rise further.

Russia has repeatedly criticized the freezing of its assets as illegal under international law, describing it as theft.

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