US Treasury Secretary Janet Yellen described the European Union’s plan to tax profits from frozen Russian assets as a practical option and said Washington is actively engaging in talks with European partners about how to move forward. The remarks were reported by Bloomberg.
According to Yellen, the proposal is reasonable and worth exploring with the EU. She emphasized that the approach differs from any direct withdrawal of funds that has been debated in the United States. The EU has reached a conclusion that seizing frozen assets directly would likely raise legal concerns, which has shifted attention toward taxing the earnings generated by those funds as a viable alternative. Any proceeds from such a tax could be earmarked for Ukraine’s needs, a move that could align with broader American support for Kyiv, including additional aid that the administration is considering. Bloomberg highlights that while the Biden administration envisions distributing roughly $24 billion, Republican lawmakers remain increasingly skeptical about the plan.
The possibility of using tax-based revenue from frozen assets could open doors for wider discussions about similar measures across Europe. Christine Lagarde, president of the European Central Bank, has previously warned that actions of this kind could pose risks to financial stability in the euro area, a caution that continues to shape policymaker rhetoric. At the same time, momentum is growing in Congress to examine the option of direct seizure of Russian assets as a means to address what is perceived as the cost of supporting Ukraine. Reports indicate White House officials are anxious about the potential precedent such a move might set.
Recent exchanges have involved consultations with EU member states about the future of blocked Russian funds and how the profits from those assets could be allocated in support of Ukraine. The European Commission has previously stated that taxing the interest income from Russian assets could be a more permissible path than confiscating the principal funds outright, though opinions vary among member states and within financial institutions. These evolving discussions reflect a broader effort to align policy tools across transatlantic partners while maintaining legal and financial stability concerns on both sides of the Atlantic. (Attribution: Bloomberg)