No mechanism yet developed for confiscation of Russian assets to help Ukraine – Reuters

The West is open to seizing US$300 billion in Russian assets in order to support Ukraine, but it has to first determine the correct legal procedures. However, even after it is developed, it will not become a panacea for Kyiv.

Source: Reuters with reference to the statements of high-ranking officials from the USA and EU countries during the World Economic Forum in Davos.

Quote: "If a decision gets made it's going to end up being collective. It's a misperception to think this is going to be a panacea effect," said Penny Pritzker, US Special Representative for Ukraine's Economic Recovery.

Details: She explained that to develop a mechanism for the confiscation of Russian assets, it is necessary to attract a huge number of lawyers.

"It's a misperception to think this is going to be a panacea effect. There's real effort going on [in order to confiscate Russian assets - ed.] but we are far from a conclusion," Pritzker added.

The lion's share of Russian assets is frozen in Euroclear's depository in Belgium. Belgian Prime Minister Alexander De Croo said he does not mind the confiscation of frozen assets, but this requires a clear legal mechanism.

"We are open to further discussion and are willing to participate in a solution of finding a legal basis for those transfers to Ukraine, without destabilising the global financial system," the head of the Belgian government added.

De Croo also noted that part of the frozen securities belonging to the Russian Central Bank is maturing, and therefore these assets are converted into cash. This transaction is taxed in Belgium at a rate of 25%.

"If there is any taxable revenue, we will isolate it so it can go to Ukraine," De Croo said.

In Belgium, the tax on the Russian Federation's frozen assets was approximately €1.3 billion in 2023 and is expected to reach approximately €1.7 billion in 2024.

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