Congress supported confiscation of frozen Russian assets in the US for Ukraine

The US House of Representatives approved a bill that provides for the possibility of confiscating Russian sovereign assets in favor of Ukraine and expanding anti-Russian sanctions.

As far as Ukraine is concerned, the bill provides for the possibility of confiscating Russian sovereign assets in favor of Ukraine. 

Confiscation of Russia’s sovereign assets and transfer to Ukraine Support Fund

The US President, in particular, has the authority to implement the process for confiscating sovereign assets and then transfer the relevant funds to two special funds: the Compensation Fund and the Ukraine Support Fund.

At the same time, the President may coordinate the algorithm for transferring confiscated Russian assets to Ukraine with the Group of Seven countries, the EU, Australia, and other US partners. 

The draft law stipulates that no later than 90 days after its adoption, the US President must submit a report to Congress, which shall include:

• each individual and legal entity is subject to EU and UK sanctions.
• each individual and legal entity that meets the criteria for imposing US sanctions under the Magnitsky Global Human Rights Accountability Act of 2016; Executive Order 14024 (sanctions related to certain harmful activities of the Russian government); Executive Order 14068 (prohibiting certain imports and exports and new investments in connection with the ongoing Russian aggression); and Executive Order 14071 (prohibiting new investments and certain services to the Russian Federation in response to the ongoing Russian aggression).

The US President must impose sanctions on each individual and entity identified in the above report as being subject to EU or UK sanctions and meeting the above US sanctions criteria.

The Act contains several other sanctions provisions that do not apply to Ukraine and aim at strengthening of the US sanctions policy, fighting against money laundering, strengthening of information security, intensification of the fight against crime, and other issues of US domestic policy.

The Rules Committee should develop a procedure for reviewing the draft law and agree on its submission for general debate. One option is to select a procedure that will combine all US international assistance bills and the 21st Century Peace through Strength Act into one package.

The EU to use profits from Russian frozen assets to buy weapons for Ukraine

EU foreign policy chief Josep Borrell said he proposes that the EU use 90% of the direct profits from Russian frozen assets in Europe to buy weapons for Ukraine through the European Peace Fund.

The EU’s top diplomat told reporters in Brussels that he would propose transferring the remaining 10% to the EU budget to be used to strengthen the capacity of the Ukrainian defense industry.

A senior EU official said that Russian assets frozen in the European Union could generate between €15 billion and €20 billion in after-tax profits by 2027, depending on global interest rates.

In recent months, various politicians and experts have put forward different ideas on how to make the confiscation of frozen Russian assets possible in Ukraine’s interests. A new concept was suggested by David Cameron.

“Instead of just keeping this money (Russian state assets – Ed.) frozen, let’s spend this money on rebuilding Ukraine. And this will be, if you will, a down payment on the reparations that Russia will one day have to pay for its illegal invasion,” said British Foreign Secretary David Cameron.

On March 7, the Swiss Parliament’s Council of Cantons approved a proposal that could allow the use of sovereign Russian assets frozen in the country to finance military reparations to Ukraine.

Russian assets frozen in the West in the amount of around 300 billion euros should be utilized to compensate Ukraine and Ukrainians for the damage caused by Russia’s war, prominent world leaders said in an open letter in November 2023.