Belgium plans to collect 3 billion euros a year in windfall profits from Russian assets frozen in the country’s coffers to give to Ukraine for “reconstruction” purposes, Prime Minister Alexander De Croo announced Friday.
“We are working on a windfall tax on profits,” De Croo told reporters after meeting with other EU leaders at the bloc’s summit in Brussels.
A day earlier, De Croo explained that Belgium was “very involved” in the issue because upwards of 90 percent of the Russian assets frozen in the EU’s jurisdiction are trapped in Belgian banks.
“The use of these funds for the military needs of Ukraine and its reconstruction makes sense from an economic point of view and from a moral point of view,” the Belgian leader assured.
The European Commission estimated in May that the bloc has frozen over 200 billion euros in assets belonging to Russia’s Central Bank, plus 24.1 billion owned by Russian companies, tycoons and other individuals.
US business media first reported on the possibility of collecting interest from Russian assets trapped abroad to fund Ukraine earlier this year, after concluding that there was no “reliable legal path” to allow for the funds to seized outright without undermining rule of law and international trust in European financial institutions.
‘Robbery’ in Broad Daylight
Asked to comment on Brussels’ plans, Christopher C Black, an international criminal and human rights lawyer with over 20 years’ experience under his belt, said that if realized, they would constitute “theft twice over” - first by seizing the money in the first place, and then preventing Russia from collecting its due interest.
“The crime of theft becomes compounded with insult by giving the money to Kiev to finance the war against Russia, and if the money is so transferred by EU government order, it will be [an] act of war – since a nation supplying financial support to another nation to carry on a war can be considered under international law as a party to the war,” Black explained.
Very Painful…for EU
Such theft would constitute a blatant violation of the United Nations Charter and the laws of war, and would undermine the rule of law in Europe, according to the legal expert, “because if they can do this to Russia they can do it to any citizens’ assets.”
The scheme would show that in effect, “no one is protected,” and that contracts between clients and banks in the EU’s jurisdiction effectively “mean nothing” because they can be broken at will and for any reason, Black said. This, in turn, threatens to undermine the credibility of EU banks among foreign depositors, he added.
The observer isn’t surprised by Belgium’s plans, pointing out that the EU and other Western countries have already systematically violated their own laws and international law, by seizing Venezuela’s gold and oil company assets, for example, or keeping Iranian assets frozen in Western banks for decades on end.
Russian Retaliation
Black expects Russia to “retaliate in kind if possible, that is if assets of the EU are located in Russia.”
Otherwise, Russia may also “have to think of other measures to force the return” of its assets, “either through diplomacy and the help of friendly nations (for example by getting them to agree to withdraw their deposits from EU banks unless the Russian assets are released)…or further reducing energy supplies to the EU,” the legal expert suggested.
“The BRICS process can help in the future as the BRICS Development Bank is further established, and a single currency can also help break Western financial domination of other countries,” Black added.
“But so long as nations continue to deposit their assets, gold or money, bonds, etc. in EU or other Western banks, they will face the real threat of having those assets seized whenever the West decides it is in their interests to do so,” the observer summed up.
Over $300 billion in Russian assets were reported frozen in Western banks' coffers in 2022, most of them belonging to the Russian Central Bank. In late 2022, a senior financial expert with the Atlantic Council* estimated the actual amount of money seized was closer to $80-$100 billion, and that the US and the EU have had trouble finding the frozen funds. In February, US business media reported that only about $36.5 billion of the frozen assets had been found so far.
Last year, Russian President Vladimir Putin characterized the West’s asset seizure an “unseemly business,” and said “stealing other people’s assets has never brought anyone good.” Before the escalation of the Ukrainian crisis, Putin repeatedly warned Russian businessmen to keep their money in Russia.
* Designated an ‘undesirable organization’ by the Russian Ministry of Justice in 2019.