US and EU allies plan to use confiscated assets of Russian oligarchs to restore Ukraine
EU allies and the US plan to use confiscated assets worth $2m and €300m sanctioned by Russian oligarchs to fund Ukraine’s recovery efforts after the war, sources told the agencies on Friday. The United States, meanwhile, also plans to use financial assets seized from sanctioned Russians for monetary aid to Kyiv under the Ukraine Reconstruction Law. Aid would also include funding for war reparations. While the March 18 decision was still in its infancy, the final plan would be drafted by EU member states.
Russian assets will be diverted “for the benefit of Ukraine”
According to sources familiar with the matter, the legislation being drafted will stipulate the sale of the oligarch’s assets and will then be used “for the benefit of the Ukrainian people”, including support for refugees, the strengthening of the cybersecurity capacities of the Ukraine, post-conflict reconstruction, humanitarian and military assistance. The funding will also be earmarked for combating Russian censorship and technologies that would discourage Russia’s campaign to shut down internet or communications services.
I also informed the President @ZelenskyyUa the disbursement of a second tranche of approximately EUR 300 million of macro-financial assistance to Ukraine.
The brave people of Ukraine need this money now.
He will support the finances of the country, while this senseless war is still raging. pic.twitter.com/g7y3OoZr80
— Ursula von der Leyen (@vonderleyen) March 18, 2022
The US Treasury Department, in a statement on Friday, also clarified that individuals who assist the EU and Washington with any information leading to the seizure of Russian assets will be eligible for cash rewards. Although the bill, in particular, does not mention such a provision or the amount of money.
“The Russian President [Vladimir Putin] and its oligarchs hoard their dirty money in nations of law buying up mansions, mega-yachts, works of art and other high-value assets,” Senator Whitehouse said in a statement released by Congress. “We must grab these sick – got luxuries and put them to use to help the Ukrainian people.”
Following the kick-off meeting of the Working Group on Russian Elites, Proxies and Oligarchs (REPO), members of participating countries issued the following joint statement: https://t.co/egeydvqY32
— Treasury Department (@USTreasury) March 17, 2022
The bill would, according to the terms, allow for the “confiscation of property of certain Russian persons subject to sanctions and the use of such property for the benefit of the Ukrainian people and for other purposes”. It will be enacted by the United States Senate and House of Representatives in Congress. The law can be cited as the “Ukrainian Reconstruction Asset Seizure Law 5” and will contain all legal provisions allowing the US government to liquidate or sell sanctioned Russian property or assets. It determines that the sanctioned wealth, according to credible information, comes in part from related corruption or political support for the regime of the President of the Russian Federation, Vladimir Putin.
The document will give the US Department of Justice “increased latitude to act quickly to prevent the liquidation of assets by Russian oligarchs,” says Sen. Roger Wicker (R-Miss.) in the legislation (still in the works) that was co-sponsored by the Senate.
EU appoints ‘freeze and seize’ task force
The European Commission’s “freeze and seize” task force set up EU-level coordination last week to implement sanctions against listed Russian and Belarusian oligarchs. It operates alongside the new Russian Elites, Proxies and Oligarchs (REPO) working group, under which the EU cooperates with the G7 countries of Canada, France, Germany, Italy, Japan, the United Kingdom and the United States, as well as Australia. The European “freeze and seize” task force in coordination with the international “REPO” task force and the G7 justice and finance ministers have identified Russian entities and individuals who provide services – financial, legal and other – to the oligarchs in order to facilitate sanctions against them.
The US Treasury Department’s Office of Foreign Assets Control (OFAC) also separately issued a new round of sanctions targeting Russian and Kremlin elites, oligarchs, and Russian political and national security leaders who directly or indirectly supported indirectly, from Russian President Vladimir Putin. what OFAC describes as “a brutal and unlawful invasion of Ukraine”. The EU and US have sanctioned Russian regime enablers, including three immediate family members of President Putin’s spokesman, Dmitriy Sergeevich Peskov; Russian tycoon and Kremlin insider Viktor Vekselberg; and the board of the sanctioned bank VTB.
OFAC also nominated 12 members of the Russian State Duma, including Vyacheslav Victorovich Volodin, who is also a permanent member of the Russian Security Council. Dmitriy Sergeevich Peskov (Peskov) has been identified as the “main propagandist and spokesman of the Russian Federation”.
The Bloc’s 27 justice ministers have appointed a cross-border team to coordinate efforts by national authorities to freeze the assets of sanctioned oligarchs. Member states have an unidentified person serving as the EU’s ‘point of contact’ to track Russia’s assets shortly after the US established a federal interagency ‘KleptoCapture’ task force to take economic measures against Russia for the invasion of Ukraine. EU and US economic retaliation against Russia has so far involved more than 680 entities subject to travel bans and asset freezes. Russian banks were also excluded from the Swift international payment system, and the Russian Central Bank was denied access to their assets, which could be used to compensate Ukrainians for damages.