European Commission approves plan for using frozen Russian assets in favour of Ukraine

The European Commission has approved the prepared proposition about the mechanism of using the income from frozen sovereign assets of Russia in favour of Ukraine.

Source: a top-level EU official at the closed briefing, as reported by European Pravda with reference to Interfax Ukraine news agency

Details: The source stated that the European Commission would not publish the propositions but will hand them over to the European Council for consideration and decision-making.

He explained that the EU’s proposition stems from the situation when central depositories (financial institutions used for transactions between buyers and sellers) were obliged to put a part of these assets, which brought profit, in a bank following the blocking of the assets of the Central Bank of Russia.

"Later it brought in a large sum of income which is still growing. This exceptional income exists only thanks to the decision about immobilisation. After all, central depositories registered these incomes as profit on their accounts, and member states started raising the corporate tax on this income," the source explained.

Finally, the European Commission decided that it was these incomes that should be used to help rebuild Ukraine. But this is a long-term goal, and right now the Commission is focused on separating the income from Russian assets and "securing" them.

"Short-term goal is to make sure that it is possible by completing two tasks: forcing central depositories to manage and register all these incomes separately so that they can be clearly identified in their accounting systems, and, secondly, from now on it must be banned to divide this net profit between stockholders or other third parties – it must remain in the central depository," the EU official explained.

Even though the source refused to provide concrete assessment of income from these assets, according to Financial Times, the EU intends to involve €15 billion from frozen Russian assets in order to supply Ukraine with financial aid.

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