EU to present plan to use proceeds of frozen Russian assets on December 12 - Bloomberg

The European Commission plans to unveil a proposal to tax profits from frozen Russian assets on December 12. Bloomberg reports , citing a person familiar with the discussions, UNN reports. 

The European Union is moving forward with a proposal to tax profits from more than 200 billion euros ($218 billion) in frozen Russian central bank assets to help rebuild Ukraine, despite concerns from several member states.

The European Commission is tentatively planning to unveil its legislative proposal on December 12 to introduce a tax on excess profits earned from frozen assets. According to a person familiar with the discussions, the draft plan will explain that several issues raised by member states still need to be resolved and that the EU proposal does not interfere with national taxes or other measures.

According to media reports, this issue has divided the 27-nation union: Belgium, Germany, France, Italy and Luxembourg among those who expressed caution about speeding up the process and called for a more gradual approach. Instead, they told other EU ambassadors last week that the EU executive should start with a more informal document to continue narrowing down the various options for using the profits, as they considered it premature to put forward a legal proposal, sources familiar with the reasoning said.

The Commission, however, said EU leaders had ordered the bloc's executive to speed up work on the proposal, the newspaper added.

A meeting between national experts and the commission on December 6 will be a key moment to determine whether the differences have been narrowed sufficiently, the article says.

Addendum

The EU has been discussing for months how to quickly apply the excess profits tax to profits earned from assets and use the proceeds to rebuild Ukraine. It is estimated that more than 200 billion euros of Russia's sovereign assets under sanctions are held in the EU, with the majority in the Belgian clearing house Euroclear. Smaller amounts are held in other EU countries.

According to data released last month, sanctioned Russian assets frozen in Euroclear generated almost €3 billion in profits from the time they were frozen until the third quarter of this year. This figure is expected to continue to grow.

Belgium said it will invest 1.7 billion euros next year to help Ukraine with its own domestic tax revenues from frozen Russian assets.

European Commission President Ursula von der Leyen initially promised an EU-level proposal by this summer, despite skepticism from many capitals and the European Central Bank. During her visit to Kyiv in October, she set a new target for the end of the year.

The adoption of the plan by the Commission on December 12 will allow EU leaders to consider it when they meet at a summit in Brussels later this week.