Confiscation of Russian assets: Bloomberg reveals details of EU Commission initiative
Confiscation of Russian assets: Bloomberg reveals details of EU Commission initiative (Getty Images)
The European Commission will meet with officials from EU states and propose legal grounds for taxing frozen Russian assets, Bloomberg reports.
The commission will meet with officials from Spain, Belgium, Italy, France, and Germany on Thursday, then with all member states next week
"Commission President Ursula von der Leyen previously said she would put forward a legislative proposal before the summer break but that timeline has since slipped," the media says.
What is the plan
According to the document, a commission working group backs implementing the three main proposals in the paper step-by-step, rather than all at once.
The steps include clarifying the scope of the duties of the financial obligations involved, imposing requirements for central securities depositories to separate cash balances of the Russian assets, and transferring the revenues to the EU’s budget as external assigned revenues.
The Russian central bank assets immobilized in the EU are expected to generate some €3 billion in windfall profits.
Where Russian assets may be located
"Over half the assets are in cash and deposits, while a “substantial amount” of the remainder is in securities that will transform to cash as they mature in the next two to three years," the media states.
Many of the funds are in Belgium at settlement giant Euroclear Ltd., where they generated nearly €750 million by the first quarter of this year.
Challenges in the EU
The prospect of taxing and seizing the windfall profits raises legal as well as financial questions.
Several countries have raised concerns that using the proceeds from the assets could encourage official reserve holders to turn their back on the euro.
Confiscation of Russian assets
Ukraine, along with international partners, is working on creating the possibility of confiscating frozen Russian assets, including state assets located in allied countries. These funds are intended for the recovery of Ukraine. Currently, the amount is nearly $500 million.
Bloomberg also reports that the EU is checking the procedure for confiscating €200 billion of frozen assets from the Russian central bank.
