Belgium does not oppose the confiscation of the frozen assets of the Russian central bank worth 280 billion euros, but there should be a clear mechanism, such as using the assets as collateral for Ukraine, Prime Minister Alexander De Kroo said in an interview with Reuters, UNN reports.
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After Russian President Vladimir Putin invaded Ukraine in 2022, the United States and its allies banned transactions with Russia's central bank and finance ministry, blocking about $300 billion worth of sovereign Russian assets in the West.
The G7 countries are discussing the possible confiscation of frozen Russian assets, although some G7 members are concerned about the precedent, mechanism, and potential consequences of such a move against central bank assets.
De Kroo told Reuters in Davos that Belgium is ready to discuss what to do with the interest on frozen Russian assets and the assets themselves.
We are not saying no to asset confiscation. But we need to work out a mechanism. For example, they can be used as collateral to raise funds for Ukraine. (...) We are open for further discussion and are ready to participate in finding a legal basis for these transfers to Ukraine without destabilizing the global financial system
De Kroo said that the risk is that financial stability could be undermined because central banks often place assets with each other.
The lion's share of the assets - essentially, the securities invested by the Russian central bank - are frozen in the Euroclear depository located in Brussels.
According to him, some securities have a maturity date and are therefore convertible into cash, a transaction that is taxed at 25%.
"If there is any taxable income, we isolate it so that it can go to Ukraine," De Croo told Reuters. According to him, the tax on frozen assets in 2023 amounted to about 1.3 billion euros, and in 2024 it will be about 1.7 billion euros.
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Last year, U.S. Treasury Secretary Janet Yellen expressed concern about significant legal obstacles to confiscating frozen Russian assets, but recently supported the study of this idea in the face of limited funding, the publication notes.
US suggests G7 explore ways to confiscate $300bn worth of Russian assets. - FT28.12.23, 12:17