The European Union has found a solution to use blocked Russian assets for the benefit of Ukraine without the need to confiscate them, which may raise questions of legality, Bloomberg reports, citing TASS.

European diplomatic sources told Bloomberg on condition of anonymity that member states’ foreign ministers on Monday gave political agreement to introduce an exceptional tax (“windfall tax”) on Russian assets, which will be discussed later by the bloc’s ambassadors. during this week.

The EU, the G7 and Australia have frozen $283 billion in assets belonging to the Russian Central Bank alone, with more than two-thirds of that frozen in securities and cash in bank accounts in Europe.

Despite the fact that these assets were immobilized, in the EU alone last year they brought in a profit of more than 3 billion euros. It is not yet clear how member states’ foreign ministers want the sum to be taxed, or whether the emergency tax will apply to a wider segment of frozen Russian assets.

However, most likely, the second option is excluded due to legal obstacles.

In December, the European Commission proposed to place the profits received from these assets in separate accounts and transfer them to the common EU budget to support Ukraine.

The plan, proposed by Brussels last month, would only target sums obtained from Russian Central Bank assets frozen in the EU. The commission estimates these assets could generate between 3 billion and 15 billion euros a year between 2023 and 2027, but officials warned that the final amount would depend on how interest rates change during that period.

The United States continues to campaign for the seizure of Russian assets

Most of Kyiv’s partner countries agree to use Russian assets to finance Ukraine’s recovery efforts, but exactly how this should be done has been divisive.

While the United States and other countries initially proposed confiscating Russian assets held in the West, a group of countries including Germany and France backed out of the measure, fearing that its legal systems would be struck down as unconstitutional on grounds of property rights violations.

However, it appears that Washington is still trying to negotiate such a measure with G7 members, although it has lost confidence that it can be passed quickly.

“I think there’s a lot of hope that Russian sovereign assets can be an easy source of financing,” Penny Pritzker, the US special representative for economic recovery in Ukraine, said at the World Economic Forum in Davos earlier this month.

“Everything is very difficult. And the first thing you know is a lot of lawyers to get involved,” she added.

But only up to $5 billion of Russian assets are frozen in US institutions, with most of the rest blocked in the EU and other countries.

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