MNI BRIEF: EU Nears Confiscating Profits On Russian Assets

The EU Commission is taking a first tentative step towards confiscating earnings on frozen assets belonging to the Russian central bank in order to be able to use these for the reconstruction and recovery of Ukraine, EU officials said Tuesday.

In this first step, earnings on an estimated Eur 200bn of CBR assets held in EU Central Securities Depositaries, such as Euroclear and Clearstream, will be required to be identified and segregated into separate accounts.

The step-by-step approach follows opposition from EU financial regulators and some member states to the confiscation of Russian assets. The ECB for instance has expressed its concerns that such a move would undermine the financial stability of the euro zone as well as its attractions for international investors. Revenues from the assets have been reported to be around Eur15-17bn, although officials did not put an estimate on the amount that today’s measures might eventually raise, citing variable factors, such as the evolution of interest rates.