Page 31 - bneIntelliNews monthly country report Russia May 2024

The EU must use the frozen Russian assets to help Ukraine. During a news conference in Warsaw on April 11, Polish Prime Minister Donald Tusk said the European Union should tap Russia’s frozen assets to help Ukraine because the windfall profits alone are insufficient. Western allies have frozen nearly $280B in Russian assets, and more than two-thirds of them are being held in the EU. Most of these Russian funds have been immobilised through the Belgium-based clearing house Euroclear, which generated about €4.4B in profits last year. “Using the profits from those assets alone is already something, but it’s certainly not enough,” Tusk said, speaking alongside his Estonian counterpart Kaja Kallas at a news conference in Warsaw. According to various assessments, Ukraine needs more than $100B annually to change the dynamics at the frontlines. If Kyiv wants to switch from defensive tactics to an offensive and regain all its internationally recognised territories as of 1991, the amount of frozen assets in the EU can make this plan a reality.
The US is preparing to transfer $5-8B of Russian assets for the reconstruction of Ukraine. Congress is preparing a bipartisan bill that would allow the confiscation of $5-8B of the Russian Federation's sovereign assets that are currently under the US' jurisdiction and use them to finance Ukraine’s reconstruction. Discussions of these plans will intensify in the coming weeks, when Congress will vote on a new bill on aid to Ukraine. If the decision is adopted, it will become a powerful financial tool for the US president, which could change modern economic diplomacy. Speaker of the House of Representatives Mike Johnson voiced the idea of using frozen Russian assets to support Ukraine. He also signaled that Republicans might try to give Ukraine some aid through a loan. Also, it is likely that a decision by the US to provide Ukraine with confiscated assets will prompt a similar move by the EU, which has so far only dared to use the profits from these assets.
The Russian Federation’s frozen assets: What is Ukraine waiting for, and what is it already receiving? Deputy Head of the Office of President Iryna Mudra reported that to speed up the receipt of frozen assets from the US, the REPO act, which would allow the US president to seise Russian sovereign assets frozen in the US, must be passed in a package with the $60B Ukrainian aid bill. As for the Russian money in the EU, the bloc’s decision on transferring profits from Russian assets must be adopted as soon as possible so that Hungary cannot block it after their EU Council presidency begins in July. The income generated from the frozen assets in 2024 will be €5-8B and can be transferred in 2025. At the same time, taxes on income from Russian assets paid in Belgium are already at work for Ukraine. So far, €1.7B in tax revenue has already been sent to the Ukrainian humanitarian fund. The money was used to support refugees in Belgium. And from the €1.28B in tax, Belgium has already provided Ukraine with €200M to purchase weapons.
The EU continues to work on reparations for Ukraine: €37B in private and €208B in state assets of the Russian Federation are frozen. As European Commissioner for Justice, Didier Reynders, stated: "We are working on this issue regarding Russian frozen assets, whether private or public. We have €37B of private assets in Europe and €200-208B of public assets." Separately, he expressed hope for "quick adoption of recent proposals on the use of proceeds from immobilised Russian assets" for the needs of Ukraine in its fight
31 RUSSIA Country Report May 2024 www.intellinews.com