White House Backs Legislation To Seize Frozen Russian Assets For Ukraine Reconstruction

It seems this is how President Joe Biden hopes to circumvent the Congressional hold-up and get badly needed funds to Ukraine, at a moment Zelensky is berating allies and warning that Western ‘hesitation’ will embolden Putin…

“President Joe Biden’s administration is backing legislation that would let it seize some of $300 billion in frozen Russian assets to help pay for reconstruction of Ukraine, a shift as the White House seeks to rally support in Congress to further fund the war against Vladimir Putin’s forces,” Bloomberg reports Wednesday. The hope is that this would help keep the lights on and salaries paid in the war-ravaged country, as well as help with post-war reconstruction.

A yacht belonging to Russian oligarch Dmitry Kamenshchik at the Don Diego port, in Santo Domingo, the Dominican Republic. AFP/Getty Images

This follows a memo by Biden’s National Security Council being sent to the Senate Foreign Relations Committee back in November which indicated the administration would welcome “in principle” legislation allowing it to confiscate the funds.

If approved the plan would funnel Russia’s seized central bank and other sovereign assets (such as some oligarchs’ superyachts) which have been “immobilized” in Western nations to hand over to Keiv.

The Financial Times previously aptly described the potential drastic move as constituting “a radical step that would open a new chapter in the west’s financial warfare against Moscow” – also as certainly Moscow will see it as an act of brazen theft.

Thus it seems the general atmosphere of war fatigue and the sudden drop-off in funding for Kiev has clearly prompted Washington and G7 partners to “get creative.”

The controversy over the potential move along with potential blowback was highlighted by The New York Times last month:

Until recently, Treasury Secretary Janet L. Yellen had argued that without action by Congress, seizing the funds was “not something that is legally permissible in the United States.”

There has also been concern among some top American officials that nations around the world would hesitate to keep their funds at the New York Federal Reserve, or in dollars, if the United States established a precedent for seizing the money.

Federal Reserve Bank of New York

Along with pressing defense needs, Ukraine reportedly is severely struggling to keep basic state services afloat, including paying teachers, civic workers, and maintaining pensions – among other things.