Bloomberg: EU seeks to tax frozen Russian assets to fund Ukraine's reconstruction

EU leaders are in favor of a plan to impose a windfall tax on profits generated by the frozen assets of the Russian Central Bank to aid Ukraine's reconstruction, Bloomberg reported on June 30.

The leaders reportedly backed the idea at the European Summit in Brussels on June 29.

According to the outlet, windfall profits from frozen Russian assets could generate up to 3 billion euros ($3.3 billion) in cash and securities.

The EU seeks to gain the backing of the G7 countries, and has discussed the plans with the U.S. London already gave its backing, Bloomberg wrote.

However, the plan still faces a number of legal obstacles. As Bloomberg explained, some fear that it may be challenged in court, as the generated profits from the sanctioned assets will ultimately belong to the Russian state.

The EU has been exploring options for how to use over $200 billion of frozen Russian Central Bank assets to aid Ukraine. Although Brussels assessed that it cannot legally confiscate the funds, the EU officials have been discussing how to at least use the profits generated from these assets and send them to Ukraine.

Some U.S. lawmakers support a more direct approach and have proposed a bill to confiscate Russian sovereign assets to bolster Ukraine's reconstruction efforts.

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The Kyiv IndependentAlexander Query