Ambassadors from European Union (EU) member states reached an agreement this Wednesday (8) in principle to use resources from frozen Russian assets to support the “recovery and military defense of Ukraine”.
“The EU ambassadors agreed, in principle, with the measures on the windfall profits from Russia’s frozen assets,” wrote the presidency of the EU Council on its profile on the social network X (formerly Twitter). It added that the money will be used to support Ukraine’s recovery and military defense in the context of Russian aggression.
The European Commission proposed in March to use the windfall profits from Russian assets frozen by sanctions related to the war in Ukraine, worth 2.5 billion to 3 billion euros a year, to mainly finance weapons and ammunition for Ukraine.
The first transfer of resources to help Ukraine defend itself against Russia is expected to take place in July.
EU sources detailed that 90% of the resources from fixed assets will be allocated to the European Peace Support Mechanism (MEAP) for military aid. The MEAP is an instrument through which EU countries have co-financed arms supplies to Ukraine since the start of the Russian invasion in February 2022.
The other 10% will be allocated to the macro-financial assistance package for Ukraine from the general EU budget. This year, the bloc agreed to €50 billion in assistance to Ukraine as part of its revised budget, covering the next four years until 2027 and disbursed in the form of loans (€33 billion) and grants (€17 billion).
Most of the frozen Russian assets are deposited with Euroclear, a Brussels-based agency that holds around 192 billion euros.
Belgium retains a portion of the proceeds from these bonds for corporate taxes, a fact that has been criticized by other member states.
Belgium argues that this is a “general tax, not something that was invented for Ukraine” and that part of the revenue is used to help Kiev with its weapons needs and to support refugees.
The sources specified that tax revenue generated in Belgium from these profits will continue to go to Ukraine in its entirety. Corporate tax is 25% in the country and applies to all companies, according to the sources, who insisted it is impossible to eliminate.
However, they recalled that, in 2022, Belgium decided to allocate all these extra corporate tax revenues to support Ukraine and that, in 2023, it created a specific fund for this purpose.
For the 2024 fiscal year, an amount of 1.7 billion euros of national corporate tax is expected from fixed Russian assets, of which around 1 billion euros has already been allocated to Ukraine.
The new legislation will apply to windfall profits remaining after this mandatory taxation, according to the sources. Member States’ ambassadors decided that the fee Euroclear will charge for handling assets will be 0.3%.
Infographics Gazeta do Povo[Clique para ampliar]
