The Biden administration supports a bill that allows transferring part of the $300 billion in frozen Russian assets to Ukraine. These finds might be used to rebuild Ukraine, as the country severely suffered from Russia’s war.
Bloomberg reports, citing a memorandum from the National Security Council to the Senate Foreign Relations Committee.
“The bill would give the executive branch the authority necessary to confiscate Russian sovereign assets in favor of Ukraine,” the National Security Council memo said.
Biden’s support for the move comes as Republicans in Congress have blocked more than $60 billion in aid to Ukraine, in part because of concerns that Washington is bearing too much of the financial burden, the newspaper notes.
According to the article, the White House is trying to balance this with concerns that such a move could damage the reputation of the US financial system and provoke a flight from the dollar.
The authors note that the administration also wants to coordinate this move with G7 allies, particularly in Europe, where approximately $200 billion of frozen Russian assets are held and where there is less support for unilaterally seizing them.
An unnamed White House official stated that the National Security Council supports the measure as part of a number of tools the United States is considering to make Russia pay for the damage caused by the war. The World Bank estimates that rebuilding Ukraine could cost about $411 billion.
A source who requested anonymity tells Bloomberg that G7 leaders are expected to raise the topic on the anniversary of Russia’s invasion of Ukraine next month.
There is a possibility that Congress could include this decision as part of an additional package of support for Ukraine.
According to the article, using Russia’s own funds to finance Ukraine’s reconstruction is viewed as a means to garner support for Kyiv, given that some Republicans are against ongoing funding.
Republican House Speaker Mike Johnson supported the idea in an interview with the New York Post, calling it “an extremely responsible thing for us to do.”
According to one of the bill’s two sponsors, Republican Senator Jim Risch, there is broad bipartisan agreement in the Senate on this issue.
Democrats and Republicans on the committee disagree on two key parts of the bill, as it requires Biden to coordinate with G7 countries on asset seizures but does not require their approval, which some believe could give the US the ability to act unilaterally.
Furthermore, the agreement includes provisions that aim to prevent Russia from challenging the seizure in U.S. courts, potentially exposing it to constitutional vulnerabilities.
According to memos seen by Bloomberg, the White House was initially ambivalent about including a requirement for G7 approval but later emphasized the need to act in concert with allies.
Such a requirement “will increase the likelihood that Europe, where the vast majority of assets are located, will be willing to take this step, given their concerns that taking such action in the context of Russia may increase the likelihood that we will seize assets in other cases where the legal and policy case is less strong,” one of the National Security Council memos said.
On December 12, the European Commission approved a legislative proposal for the restoration of Ukraine using the proceeds of frozen Russian assets, which the European Council took note of on December 14.
