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Belgium commits €1.7 billion for Ukrainian aid from taxed frozen Russian assets

Belgium commits €1.7 billion for Ukraine’s assistance, drawing from taxed frozen Russian assets. The EU and G7 explore taxing immobilized Russian sovereign assets, while Belgium works on banning Russian diamonds from its markets.
Prime Minister Alexander De Croo (R) meeting with Ukrainian President Volodymyr Zelenskyy (L) in Belgium on 11 October 2023. Screenshot: Twitter/ZelenskyyUa
Belgium commits €1.7 billion for Ukrainian aid from taxed frozen Russian assets

Belgian PM Alexander De Croo said Belgium will invest €1.7 billion in Ukraine in 2024 sourced from tax revenue generated from frozen Russian assets, as EU and G7 discuss a broader windfall levy on profits from these sanctioned assets, Bloomberg reports. Belgium also seeks to ban Russian diamonds from its markets.

The majority of the frozen Russian central bank assets, amounting to over €200 billion, are currently held in Europe, with a significant portion of them managed by Euroclear SA in Belgium. Under Belgian law, these proceeds are subject to a 25% corporate tax.

After meeting with Ukrainian President Volodymyr Zelenskyy in Brussels on 11 October, Belgian Prime Minister Alexander De Croo affirmed this allocation of tax proceeds for the purpose of financing military equipment, reconstruction, and humanitarian aid for Ukraine. 

“We have decided that 100% of the taxation of the proceeds is going to the Ukrainian people,” De Croo said, according to Bloomberg. “It has been the case last year, it will be the case for 2024. Our methods could be an inspiration for other countries.”

De Croo further revealed that Belgium and the G7 are working together to implement a traceability system, aiming to completely block Russian diamonds from their retail markets.

On a larger scale, the EU and Group of Seven (G7) nations are engaged in discussions regarding a plan to tax the profits generated from immobilized Russian sovereign assets. On 11 October, US Treasury Secretary Janet Yellen expressed support for this initiative, distinguishing it from the outright seizure of assets, as per Bloomberg.

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