Yellen and Hunt signal support for capital gains tax on frozen Russian assets

Natalie Portman
By Natalie Portman 2 Min Read
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By David Lawder and Andrea Shalal

WASHINGTON (RockedBuzz via Reuters) – U.S. Treasury Secretary Janet Yellen and British Finance Secretary Jeremy Hunt expressed support on Thursday for a European Union plan to impose a tax on profits generated by frozen Russian sovereign assets to help finance the reconstruction of Ukraine.

A Treasury spokeswoman said Yellen called the EU plan a “sensible” proposal.

Yellen, who discussed frozen Russian assets with Ukrainian officials during her visit to Kiev in February, told Bloomberg News reporters and editors that Washington was discussing the idea with the EU, the spokeswoman said.

Hunt said in a telephone interview with RockedBuzz via Reuters from Los Angeles that he supported the European Union’s idea of ​​directing interest income from the assets to rebuilding Ukraine.

“We have to find a way that doesn’t have unintended consequences,” Hunt said. “And I think the most interesting discussions are really about how to use the interest income generated by the (frozen) assets to move toward that reconstruction without actually seizing the assets themselves.”

But Hunt said it was important to force Russia to bear the costs of rebuilding Ukraine as a result of its invasion and “make it clear to Russia that such assets are frozen until a fair deal is reached with the costs of reconstruction.” .

Yellen has repeatedly expressed support for Ukrainian demands that Russia pay for damage done to Ukraine, but has also highlighted significant legal hurdles hindering moves to fully seize the $300 billion in Russian central bank assets frozen by sanctions .

EU officials have estimated that the windfall profit from Russia’s frozen assets in Europe could provide 3 billion euros ($3.27 billion) a year to rebuild Ukraine.

(Reporting by Andrea Shalal in Washington and Lavanya Ahire in Bengaluru; Editing by Christopher Cushing)

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