Belgium earns 625 million euros from frozen Russian assets

Belgium received a “windfall” of 625 million euros as a result of taxing interest on frozen Russian assets, Le Soir reported, citing the Treasury. transmit “RIA News”.

“During the last budgetary control, the government unexpectedly presented a significant windfall: 625 million euros received as a result of the taxation of interest received from Russian financial assets frozen in our country,” the report says.

As Le Soir explained, the Euroclear international depository operates in Belgium. According to the publication, payments on coupons and bonds, which are maturing, increase the amount of funds in this financial institution. Moreover, Euroclear does not just store them, but invests them. As a result, in 2022 the company received an interest income of 821 million euros. As Le Soir pointed out, these funds will continue to grow in 2023, but at a slower pace. The authors of the material emphasized that these excess incomes are taxed.

According to the Belgian Treasury, Brussels has frozen Russian funds for 250 billion euros and has taken a leading position in this indicator in Europe. “So far, we have frozen 191.9 billion euros of transactions and 58.7 billion of assets,” Treasury Administration General Manager Alexandre de Geest told Le Soir.

He noted that some representatives of Russian business transferred their assets to relatives in order to avoid sanctions. This was reported by Belgium to the European Commission, which adds new names and organizations to the sanctions list. Answering a question about the possibility of transferring the frozen assets to Ukraine, de Guest noted that “the Belgian constitution and European treaties protect property.” The move would require “regulation at the European level,” he added.

At the end of March, the Politico newspaper, citing a European Commission (EC) document informedthat the European Union is studying possible options for using the Russian foreign exchange reserves of the Central Bank of the Russian Federation frozen in the countries of the bloc, and the return on investment of these funds, as expected in the EC, will be 2.6%.

According to the publication, the EU can direct the profit received from investments to finance the restoration of Ukraine. Member countries of the bloc set up a working group last month to explore options. Swedish diplomat Anders Anlid, who led the group, told the newspaper that the EU agreed that their actions would have to comply with EU and international law. The EC believes that they will be able to substantiate their arguments in favor of investing the assets of the Russian Central Bank and making a profit in favor of Ukraine.

In the event that the anti-Russian sanctions are terminated, the owner of the frozen assets should be able to return the capital, as well as any income that was agreed upon in the agreement, the article says. According to the EC, profits above a certain amount can be appropriated.

After the start of Russia’s special operation in Ukraine, Western countries blocked 300 billion euros of reserves of the Central Bank of the Russian Federation and 19 billion euros of private funds of Russian businessmen, said in November 2022 the head of the European Commission, Ursula von der Leyen. According to Russian Finance Minister Anton Siluanov, Russia has lost access to half of its gold and foreign exchange reserves – about $ 300 billion. The EC said that the blocked funds should be pooled into a fund, the funds of which should be invested, and the profits from these investments should be used for compensatory payments to Ukraine.

The Kremlin called the freezing of Russian assets theft. At the end of October last year, the press secretary of the President of the Russian Federation Dmitry Peskov said that the blocking of assets abroad is contrary to international law. Russia’s defensive strategy worked despite the freezing of $300 of foreign exchange reserves by the Central Bank, and the sanctions did not lead to a significant reduction in the budget, experts from Bruegel and IIF also said.