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Bloomberg: EU to announce plans to use frozen Russian assets for Ukraine's reconstruction

by Elsa Court and The Kyiv Independent news desk November 30, 2023 8:17 PM 2 min read
A demolition vehicle removes the rubble as works to restore the Central City Hospital in Pisky, Kharkiv Oblast, on Sept. 27, 2023. (Vyacheslav Madiyevskyy / Ukrinform/Future Publishing via Getty Images)
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The EU is likely to announce a proposal to use the tax profits from frozen Russian assets to fund Ukraine's reconstruction in the coming weeks, Bloomberg reported on Nov. 30.

The European Commission is to unveil a draft plan on Dec. 12 that will "clarify several issues raised by member states," Bloomberg reported, citing sources familiar with the discussions.

The proposed legislation will not interfere with national taxes or other measures, according to Bloomberg.

European Union leaders expressed support on Oct. 27 for a proposal to use billions of euros in windfall taxes from Russian assets tied up in the West to rebuild Ukraine.

"Politically we agreed that ultimately Russia must pay for the long-term reconstruction of Ukraine," European Commission President Ursula von der Leyen said in Brussels.

While some member states, such as Germany, are against the plans to introduce EU-wide legislation due to fears it could entail legal or financial risks, some countries have already moved forward with their national legislation.

Belgium announced on Oct. 11 that it has created a 1.7 billion euro ($1.8 billion) fund for Ukraine financed by the tax revenue from interest on frozen Russian assets.

Banks in Belgium who hold frozen assets must pay income tax on the interest they earn, which goes directly to the national government.

"The taxation of income from these assets should go 100% to the benefit of the population of Ukraine," Belgian Prime Minister Alexander de Croo said on Oct. 11 in Brussels.

The next day, the Estonian government approved a draft law that would allow frozen Russian assets to be transferred to Ukraine.

"Russia must compensate Ukraine for all the war damages caused," Prime Minister Kaja Kallas said.

US official: Frozen Russian assets won’t be returned until Moscow pays for Ukraine’s reconstruction
The roughly $300 billion in Russian assets that have been frozen by Ukraine’s allies in the West will not be returned until Moscow pays for Ukraine’s reconstruction, Assistant Secretary of State for European and Eurasian Affairs James O’Brien said at a U.S. Senate hearing on Nov. 8.
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