The US has urged the European Union to reduce the tax on profits from frozen Russian assets in European banks. This is aimed at raising more funds to aid Ukraine, according to Financial Times.
As reported by Financial Times, there is still no agreement in the West on how to use frozen Russian assets to support Ukraine. The US advocates for full confiscation of Russian funds, while the EU aims to assist Ukraine with profits from frozen Russian assets.
Last week, according to Financial Times, the US proposed to its European partners to mobilize tens of billions of euros for Ukraine by providing loans secured against future profits from frozen Russian assets. Agreement on this idea is expected to be reached at the G7 leaders' summit in Italy this June.
Meanwhile, Deputy National Security Adviser Daleep Singh explained to Financial Times that such a mechanism could involve issuing bonds to businesses or a loan by one or several G7 governments, to be repaid primarily with interest income from frozen Russian assets. Under this initiative, Europe could secure around $50 billion for Ukraine.
However, Singh emphasized that to make this idea work, it is critically important to "maximize the annual interest income" from frozen Russian assets. And to achieve this, European partners must reduce the tax. If done so, Singh estimated that interest income from Russian assets could increase to €5 billion annually.
"We must maximize the use of every euro of these immobilized reserves for the benefit of Ukraine," Singh stressed.
Confiscation of Russian assets for Ukraine
It is worth noting that G7 countries have been discussing for some time the mechanism of using Russian assets to support Ukraine. Their own mechanisms have been developed in the European Union as well. The issue of Russian assets was one of the main topics at this week's G7 foreign ministers' summit, but no agreement was reached. Therefore, G7 leaders will address the issue of Russian assets at the summit in June.
Additionally, on Saturday, April 20, the US House of Representatives approved a bill allowing the confiscation of sanctioned Russian assets in the US and their transfer to Ukraine.