Those sanctioned Russian assets are piling up.
The rules vary across Europe where most of the seizures have taken place following Russia’s invasion of Ukraine on Feb. 24. The White House recently offered examples of assets that have been taken off the table and noted some had been seized while others were impounded. Under U.S. law, any sanctioned assets would be in a state of legal limbo and put aside, but could eventually be returned to their owners.
Now policymakers in the U.S. — both on Capitol Hill and perhaps in the administration — are pushing to change the uncertain status of those assets around the world. Some want to not just take possession of the assets of Kremlin-connected billionaires, but also sell them and give the proceeds to Ukraine.
As Senator Rob Portman (R OH) recently put it on the Senate floor, we should be expanding sanctions and “seizing, not just freezing, assets from Kremlin supporters” alongside other measures.
Portman and Sen. Michael Bennet (D-CO) have introduced a bill, the RELIEF for Ukraine Act, which directs any funds from seized Russian assets towards Ukrainian refugees, reconstruction, and other efforts.
‘We have far further to go to fully address this threat’
President Joe Biden pledged to seize the «ill-begotten gains» of Russian oligarchs during his State of the Union Address on March 1. During a speech Tuesday in London, Deputy Treasury Secretary Wally Adeyemo outlined how the U.S. government and its allies may go further in sanctioning Russian individuals.
Adeyemo, who’s in Europe to shore up alliances, touted the work to “share information and intelligence and to facilitate the enforcement of our sanctions, namely to freeze and seize assets of sanctioned individuals.”
“We have far further to go to fully address this threat and restore justice for the people of Ukraine,” Adeymo added, without saying where the assets could go.
Adeyemo also noted that the West may sanction those who help Russian oligarchs hide their assets.
‘Our bill makes Putin and Russian oligarchs pay the price’
The intentions of the bill from Portman and Bennet are clear: If enacted, it would create a new Ukraine Relief Fund administered by the Department of State.
“Our bill makes Putin and Russian oligarchs pay the price by ensuring that funds from their seized assets go directly to the Ukrainian people to support them through many difficult years ahead of resettlement, reconstruction, and recovery,” Bennet said in a statement.
To be sure, Ukraine could use the extra money.
Ukraine’s economy minister, Yulia Svyrydenko, recently said the war in Ukraine has cost her country $564.9 billion by damaging infrastructure and hindering economic growth. However, the oligarchs may be able to easily compensate for those losses. An oft-cited 2017 paper from the National Bureau of Economic Research estimated Russian oligarch wealth and came to the startling conclusion that rich Russians held around $800 billion in assets outside of Russia, as of 2015.
Or to put it more starkly: “There is as much financial wealth held by rich Russians abroad — in the United Kingdom, Switzerland, Cyprus, and similar offshore centers — than held by the entire Russian population in Russia itself,” Filip Novokmet, Thomas Piketty, and Gabriel Zucman wrote.
In the end, any action would likely take place under the umbrella of a recently formed multinational task force that includes the U.S. That would allow Western governments to work together to track and allocate the assets, which so far have been found largely in Europe.
Ben Werschkul is a writer and producer for Yahoo Finance in Washington, DC.