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Here’s how to punish those who still trade with Russia. Centenary Policy Institute Report

Here's how to punish those who still trade with Russia. Centenary Policy Institute Report

What was said at the round table organized in Brussels by the Lithuanian think tank Centenary Policy Institute

If you can't cut off trade with Russia entirely, at least tax it with a special levy of 5%. This is the proposal discussed at the round table organized in Brussels by the Lithuanian think tank Centenary Policy Institute and in which representatives of the various EU agencies took part, including the External Action Service, the Directorate General for Neighborhood and Enlargement and the Sanctions Unit. This is what was discussed behind closed doors in the Belgian capital to, as the final document states, "find new measures to prevent Western companies from financing Putin's war effort."

Taxing business with Russia.

The Centenary Institute was founded in Vilnius in 2018 – four years after the Russian invasion of Crimea and as many years before that of the whole of Ukraine – with the explicit intention of formulating proposals to “address the emerging threat posed to Western democracies by hostile actions by Russia and China”.

And it was precisely its founder and director Paulius Kunčinas, a Lithuanian economist very active in Brussels, who punctuated the discussion promoted by his Institute and moderated by himself with a working paper with the eloquent title "Taxing business with Russia to rebuild the Ukraine".

“The EU – is the incipit – may have imposed a price on Russia's war of aggression with 13 sanctions packages, but it has not yet managed to prevent Western companies from financing the Russian war machine”.

A “sin tax”.

If this is the premise, the conclusions are immediate: “the minimum the EU should consider is imposing a flat tax of 5% on all 51 billion euros of trade with Russia that continues today”.

A withdrawal, the director clarifies, which will be used in the reconstruction of Ukraine through the immediate, and not postponed to the post-war, "activation of an ad hoc fund".

If this is the objective, the intermediate step is the introduction of a "mandatory disclosure" of all business that Western companies listed on the G7 and Turkish stock exchanges do with Moscow as well as taxes paid in Russia.

Kunčinas recognizes that all this amounts to imposing a sort of "sin tax", as he calls it, specifying that "the alternative would be to do nothing" and accept that some of us continue to support the Kremlin's geopolitical designs.

A revenue between 5 and 10 billion.

The co-founder of the Ukraine Breakthrough Fund Roman Sulzhyk explained the proposal in more detail during the round table, who also revealed that he had already forwarded it to the SEC, the US stock exchange authority.

According to Sulzhyk, every Western company still doing business with Russia should mandatorily disclose to its investors, in order, “the amount of taxes paid in Russia; trade carried out with Russia; the workers in Russia; the assets, and their relative value, present in Russia”.

As for the philosophy of the intervention, Sulzhyk summarizes it as follows: “it is impossible to completely cut off trade with Russia. But at least let's tax him."

In this way, his calculation is based on the approximately 200 billion euros of trade that still exists between the G7 countries and Russia, "we could at least obtain between 5 and 10 billion euros per year".

The opinion of the former Secretary General of the European Parliament.

The debate was enriched by the intervention of a personality who, although specifying that he "cannot speak on behalf of the European Parliament", was its Secretary General for 14 years.

Klaus Welle knows that building so well that he can “ensure that any additional measures that may be taken to support Ukraine and create deterrence against Russia will undoubtedly be supported by the European Parliament with a large majority”.

Welle even optimistically quantifies between 80 and 90% the share of MEPs in office – who, however, as we know, are at the end of their mandate – who would vote in favor of "additional measures" such as the one discussed in the round table in which he took part .


This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/ecco-come-punire-chi-commercia-ancora-con-la-russia-report-centenary-policy-institute/ on Fri, 31 May 2024 07:51:58 +0000.