Biden wants to transfer confiscated assets of Russian oligarchs to Ukraine

The White House announced proposal to allow the US authorities to liquidate the assets of Russian oligarchs and donate the proceeds to Ukraine. Writes about it The Washington Post.

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US President Joe Biden will send the new plan to Congress along with a broader request for $33 billion to help Ukrainians fight Russia. Biden's funding request includes $20 billion in military aid to Ukraine, $8,5 billion in economic aid, and $3 billion in humanitarian aid.

The White House did not disclose the text of its proposal on Russian oligarchs, but said the proposal would "improve" the federal government's ability to send seized funds to Ukraine.

Under current law, the United States can generally only freeze, not seize, or liquidate the assets of sanctioned individuals. Civil liberties groups have raised concerns that previous congressional proposals to do so violate constitutional safeguards by allowing federal law enforcement to bypass legal process.

"This package of proposals will establish new powers to confiscate property associated with Russian kleptocracy, allow the government to use the proceeds to support Ukraine, and further strengthen relevant law enforcement tools," the White House said in a statement.

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The White House's requests to Congress will now be the subject of intense controversy on Capitol Hill as lawmakers struggle to keep spending amid a deteriorating economy.

The administration is also pushing for Congress to approve tens of billions of dollars in funding to fight the pandemic, with the White House warning of cuts to vaccines and other treatments.

The White House has said that its requested military assistance of about $20 billion will help provide Ukraine and allies on the "eastern flank" with artillery, armored vehicles, anti-tank weapons and advanced air defense systems, among other types of weapons.

An $8,5 billion economic aid will help the government of Ukraine pay for food, energy and medical services, while humanitarian aid is designed to mitigate the growing international hunger crisis. The Ukrainian government has asked the US for at least $2 billion a month to meet its short-term economic needs.

The White House said its plan to liquidate the assets of the Russian oligarchs was made public in close cooperation with the Treasury Department, the State Department and the Department of Commerce. Attorney General Merrick Garland previously told congressional lawmakers that he supports efforts to redistribute seized Russian funds to Ukraine.

But even some senior Biden administration officials stressed the need to be cautious about a potentially significant precedent change in US forfeiture law. Treasury chief Janet Yellen said lawmakers need to be careful when asked about a plan to transfer billions of dollars from confiscated Russian bank reserves to Ukrainians.

“I would say this is very important and we need to think carefully about the implications before taking such steps,” Yellen said. “I don't want to do it lightly. In my opinion, our coalition and partners should feel comfortable and support this.”

The Biden administration's proposal includes, among other things, a directive to make it a federal crime to "knowingly or willfully possess proceeds directly derived from corrupt dealings with the Russian government." The White House is also calling for stronger anti-money laundering protections and giving the United States the power to confiscate proceeds from sanctions evasion attempts.

From the start of the invasion, the Biden administration has spearheaded an international financial assault on those close to Russian President Vladimir Putin, including by seizing assets such as ships, luxury real estate and private jets. Global law enforcement agencies have also stepped up the hunt for their assets.

The effectiveness of such measures in containing the war and helping Ukrainians is less clear. The amount of assets of Russian oligarchs potentially available to US authorities is not known, in part because federal law allows oligarchs to effectively mask their assets. The US Treasury Department has imposed sanctions and blocked more than $1 billion worth of ships and aircraft, as well as freezing hundreds of millions of dollars worth of assets belonging to the Russian elite in US bank accounts.

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These are relatively small numbers compared to the $84 billion in damage that, according to economists at the Kyiv School of Economics, Ukraine suffered only in its civilian infrastructure. Ukrainian President Volodymyr Zelensky has said his country has suffered $550 billion in economic damage. Some Russia experts also say sanctions against the oligarchs could backfire by alienating Russia's financial elite from the West and leading them into closer ties to the Kremlin.

But the administration's move came in response to growing demands from Congress to repurpose the assets of Russian oligarchs. The House of Representatives passed a largely symbolic bill calling on Biden to liquidate more than $5 million in assets belonging to those sanctioned by the US government and send the proceeds to Ukraine.

A previous version of the House bill would have gone further, but it was defeated after the American Civil Liberties Union (ACLU) warned that a law to liquidate assets and transfer them to Ukraine could violate constitutional due process guarantees.

“The question is where is the jurisdiction and whether these oligarchs have the right to protect their property,” said Ariel Cohen, senior fellow at the Atlantic Council's Eurasia Center and member of the Council on Foreign Relations. “I am against confiscation of property without due process of law. What is the source of law for the arrest, let alone the disposal of these assets?”

Speaking to reporters, a senior administration official declined to provide details, but said the new measures would include judicial review mechanisms.

“With these guarantees, we are confident that they do provide constitutional requirements,” the official said.

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