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The White House announced on Thursday a proposal to allow US authorities to liquidate the assets of Russian oligarchs and donate revenue to Ukraine in search of what appears to be broad new legal powers to expand America’s financial war against the Kremlin amid bipartisan pressure in Congress. .
President Biden will send a new plan to Congress, along with a broader request for $ 33 billion to help Ukrainians fight the Russian invasion. Biden’s request for funding includes $ 20 billion in military aid to Ukraine, $ 8.5 billion in economic aid and $ 3 billion in humanitarian aid, among other funds, such as $ 500 million to support the production of American crops to cope with global food. shock caused by the war.
The White House did not reveal the legislative text behind its proposal for Russian oligarchs, but said the proposal would “improve” the federal government’s ability to send seized funds to Ukraine. Under current law, the United States can usually only freeze – not seize or liquidate – the assets of sanctioned individuals. Civil liberties groups have expressed concern that previous congressional proposals to that effect run counter to constitutional protection by allowing federal law enforcement agencies to circumvent the judicial process. It was not immediately clear how the White House would seek to change the status quo without violating those protections.
“This package of proposals will create new bodies for the confiscation of Russian kleptocracy-related assets, allow the government to use the proceeds to support Ukraine, and further strengthen related law enforcement instruments,” the White House said in a statement. house.
The White House’s demands to Congress will now be the subject of intense debate on Capitol Hill as lawmakers face a crisis of walking in a deteriorating economy. The administration is also urging Congress to approve tens of billions of dollars in funding to fight the pandemic, with the White House warning of cuts in vaccines and other treatments.
The White House said the $ 20 billion in military aid it sought would help provide Ukraine and its eastern flank allies with artillery, armored vehicles, armor and advanced air defense systems, among other weapons. $ 8.5 billion in economic aid will help the Ukrainian government pay for food, energy and health care, while humanitarian aid aims to quell a growing international crisis of hunger. The Ukrainian government has demanded at least $ 2 billion a month from the United States to meet its short-term economic needs.
The White House said its plan to liquidate the assets of a Russian oligarch was published in close coordination with the Ministry of Finance, the State Department and the Ministry of Trade. Attorney General Merrick Garland told congressional deputies earlier that he supported efforts to redirect seized Russian funds to Ukraine. But even some senior Biden officials have stressed the need for caution about a potentially significant change in the precedent of the US Confiscation Act. Finance Minister Janet L. Yellen told reporters last week that lawmakers should be careful when asked about a plan to provide billions of dollars to Ukrainians in detained Russian bank reserves.
“I would say this is very important and we will have to think carefully about the consequences before we take it,” Yellen told reporters last week. “I would not like to take it lightly and I think our coalition and partners need to feel comfortable and supportive.”
The new powers sought by the White House reflect pressure on Western allies to step up their economic campaign against Russia over its ongoing war against Ukraine. The Biden administration’s proposal also includes a directive to make it a federal crime to “knowingly or intentionally possess proceeds directly from corrupt deals with the Russian government,” and Western allies are coordinating Russia’s response to halting natural gas. NATO countries. The White House’s latest proposal also calls for improved protection against money laundering and will give the United States the power to take revenue from attempts to facilitate the avoidance of sanctions.
Since the beginning of the invasion, the Biden administration has been waging an international financial attack on those close to Russian President Vladimir Putin, including by seizing assets such as ships, luxury real estate and private jets. Global law enforcement agencies have also stepped up the hunt for their assets.
The effectiveness of such measures to deter the war and help the Ukrainians is less clear. The size of the assets of Russian oligarchs potentially available to US authorities is unknown, in part because federal law allows oligarchs to effectively conceal their assets. The US Treasury Department, the administration said in a statement, “sanctioned and blocked vessels and aircraft worth more than $ 1 billion, and froze hundreds of millions of dollars in assets belonging to Russian elites in US bank accounts.” Earlier this month, US authorities seized a 255-foot yacht worth $ 90 million in Spain, owned by Russian billionaire Viktor Vekselberg. Spanish authorities decided to freeze the ship after the Justice Department received a confiscation order in a federal court in Washington, alleging US bank fraud, money laundering and sanctions violations.
These are relatively insignificant figures compared to the $ 84 billion in damage Ukraine has suffered from its civilian infrastructure alone, according to economists at the Kiev School of Economics. Ukrainian President Volodymyr Zelensky said last week that his country has suffered $ 550 billion in economic damage since the February 24 invasion of Russia. Some Russian experts also said sanctions by oligarchs could backfire by alienating Russia’s financial elite from the West and turning it closer to the Kremlin.
The United States has detained the superyacht of a Russian billionaire close to Putin
But the administration’s move comes in response to growing noise from Congress to divert the oligarch’s assets. On Wednesday, the House of Representatives passed a largely symbolic bill calling on Biden to liquidate assets worth more than $ 5 million belonging to US government officials and send the proceeds to Ukraine. He passed with the support of both parties by 417 votes to 8. The Senate proposal was backed by Senator Sheldon Whitehouse (DR.I.), Richard Blumenthal (D-Conn.), Lindsay O. Graham (RS.C.) and Roger Wicker (R-Miss.).
An earlier version of the House of Representatives bill would have gone further, giving the president that power, but was removed after the American Civil Liberties Union warned it could violate the legal protections of the Constitution by not allowing its purposes. to challenge the government’s actions in court. ACLU officials said the measure would likely be lifted by the judiciary if passed, as proposed, giving Russia a potential propaganda victory over the United States. The House of Representatives bill says the funds should be used for weapons for the Ukrainian army, for rebuilding the country, humanitarian aid for refugees and aid for the Russian people.
Senators are urging the United States to offer monetary rewards in search of assets of Russian oligarchs
“The question is where the jurisdiction is and whether these oligarchs have the power to defend their property,” said Ariel Cohen, a senior fellow at the Eurasian Center of the Atlantic Council and a member of the Council on Foreign Relations. “I am not necessarily for the seizure of property without due process … What is the source of the right to seize, let alone dispose of these assets?”
Speaking to reporters, a senior administration official declined to give details, but said the new measures would include judicial review mechanisms. “With these guarantees, we feel confident that they provide constitutional requirements,” the official said. The official said on condition of anonymity to speak at the request of the administration.
Andrew Jeong and Spencer S. Hsu contributed to this report.
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