White House Backs Confiscating Frozen Russian Assets

After the US Congress refused to agree on new aid to Ukraine, the Biden administration supported a bill that would allow the confiscation of some Russia’s frozen assets in favor of Ukraine, Bloomberg says. The administration of US President Joe Biden supported the idea of frozen Russian assets partial confiscation in favor of Ukraine, Bloomberg reported on Wednesday, 10 January. The White House generally welcomes the bill, which would allow the confiscation of some frozen funds worth about $300 billion to support Ukraine’s recovery from the Russian invasion, the November report of the US National Security Council to the Senate Foreign Relations Committee says. This legislative provision “would give the executive branch the powers necessary to confiscate Russian sovereign assets in favor of Ukraine”, the document viewed by the agency’s journalists says. Biden backs Russian asset forfeiture after Ukraine aid blockade in Congress Biden supported the seizure of Russian assets after Republicans in Congress blocked funding for further $60bn aid to Kyiv over fears of heavy financial burden on the US amid problems with the AFU counter-offensive. According to the agency, the White House is trying to balance these doubts with other concerns - that the confiscation of Russian assets will adversely affect the US financial system reputation and provoke the flight from the dollar. In addition, Washington intends to coordinate this step with its G7 allies, especially the Europeans, as the EU countries hold about $200bn of Russia’s frozen assets total amount. West seeks ways to hand over frozen Russian assets to Ukraine In Europe and America, after the beginning of Russia’s full-scale invasion to Ukraine and the freezing of Russian assets, the West is looking for ways to confiscate these funds in favor of Ukraine that would not contradict international law. In the summer of 2023, an EU working group concluded that there was no legal way to seize Russian assets. After that, the EU focused on exploring options for reinvesting the frozen funds in order to transfer the profits generated this way to Ukraine’s reconstruction. About $300bn of the Bank of Russia’s reserves were frozen in Western countries after the start of Russia’s full-scale aggression against Ukraine, of which more than $200bn were frozen in the European Union. The European Commission proposed forcing central depositories to separately record exceptional profits from Russian assets so that they can be clearly identified in the accounting system. Since 12 December, these profits are not allowed to be distributed to shareholders and other interested parties. The European Commission ordered that all amounts remain within the central depositary. The actual numbers, details of procedures and processes are not public. The European Commission gave them to the EU Council, which will decide how to proceed. Specific deadlines were not mentioned. On 20 December, it was reported that the German Federal Prosecutor’s Office appealed to the Higher Land Court in Frankfurt am Main with a demand to confiscate more than 720 million euros, which are stored in the accounts of the Russian National Settlement Depository (NSD) - a division of the Moscow Exchange.