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Ukraine to get $2.4b from frozen Russian funds, says Belgium

BRUSSELS – Ukraine is to receive €1.7 billion (S$2.4 billion) from taxes on interest generated from Russian funds frozen in the wake of Moscow’s invasion of its neighbour, Belgium’s prime minister said on Wednesday.

The money will be made available to Kyiv next year, Mr Alexander De Croo told a Brussels news conference held jointly with Ukrainian President Volodymyr Zelensky.

Belgium has already allocated €600 million to go to Ukraine this year on the same basis, according to a government official.

“The taxes on the interest of these assets should go 100 per cent to the Ukrainian people,” Mr De Croo said.

A Group of 7 decision to freeze Russian assets immediately after the Kremlin ordered its February 2022 invasion saw some US$300 billion (S$400 billion) blocked in participating countries.

The lion’s share is held in Europe – much of it in Belgium, which hosts Euroclear, a company that handles international securities transactions.

Mr De Croo said “hundreds of billions” of euros in Russian assets were frozen, generating “billions” in interest.

Although Ukraine has called for all the Russian money to go towards post-war reconstruction, G-7 nations dismiss outright confiscation as fraught with legal problems and a violation of global norms.

But money raised through interest – benchmarked on the European Central Bank’s rates – is fair game, they posit.

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Mr De Croo said Belgian legislation permitted such a procedure, and suggested that other EU countries could follow that lead.

Mr Zelensky was in Belgium to attend a Nato meeting of defence ministers. AFP

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