Bipartisan legislation would allow the US to confiscate Russian assets worth $5 to $8 billion.
The US Congress is preparing to provide aid to Ukraine
The US Congress will provide President Joe Biden with a powerful new financial tool to strengthen Ukraine, which could change modern economic diplomacy.
Politico writes about it.
This bipartisan legislation passed by House and Senate committees would allow the administration to seize about $5-8 billion of Russian sovereign assets under US jurisdiction and use that money to finance the recovery of Ukraine.
Discussions of these plans are expected to intensify in the coming weeks when Congress passes a new bill on aid to Ukraine.
In an interview with Fox News on Sunday, Speaker Mike Johnson floated a proposal to seize Russian assets as one of the ideas Republicans would support in response to the Biden administration's request for more aid to Ukraine.
Republicans may try to provide some of the aid to Ukraine in the form of a loan and are also considering expanding U.S. natural gas exports to "not fund" Russia's military effort.
Mike Johnson
Speaker of the House of Representatives
The next move by lawmakers to seize Russian assets will set a new precedent for how the US navigates future geopolitical conflicts.
When you look at global adversaries, you have to recognize that you have military, diplomatic and economic diplomacy that has to be coordinated and has to be effective, Congressman French Hill (R-Ark.), one of the leaders of the effort, said in an interview I — For me, this is an important part of economic diplomacy, which goes beyond adding new names to the sanctions list that will never be subject to sanctions.
While the policy has been in the making for several months, several fraught issues and critical details still need to be resolved.
A serious concern among some lawmakers seeking to help Ukraine is that it could be seen as a substitute for more aid, which legislative leaders say it is not.
On the world stage, the general idea has also met some resistance in Europe, where most frozen assets are stored — about $200 billion. EU leaders are moving forward on a narrower path, claiming profits from Russian assets immobilized there rather than seizing them entirely.
Part of the thinking behind the US legislation is that it will help make the EU more comfortable with the more legally, politically and economically tricky step of confiscation. Amid European concern, the question of whether the US should get G7 support to seize a smaller pool of Russian assets under its jurisdiction was also a point of debate on Capitol Hill.
This will significantly strengthen the ability of the United States if it decides to seize reserves,” said David Wessel, director of the Hutchins Center for Fiscal and Monetary Policy at Brookings. — This is important because, even though the U.S. doesn't have many reserves — most of them are in Europe — it will give the U.S. more leverage to push the Europeans to do more.
Hill was active in the legislation as a member of the House Foreign Affairs Committee, which approved it, and the House Financial Services Committee, which has separate jurisdiction over economic sanctions. Hill is a former banker, Treasury official and Senate aide.
While he supports the leading House bill, the Ukrainian Repo Act, Hill is also pushing to expand the potential funds that could be seized and how they could be used.
For example, he wants the legislation to extend to Russian sovereign assets and state-owned enterprises. He has tried to rally Europe behind the confiscation plan, including through a joint op-ed in the Wall Street Journal with Albanian lawmaker Lulzim Basha. Last month, he wrote in a separate op-ed with former Speaker Newt Gingrich that the US "cannot wait for G7 approval to lead or act."
You had a sovereign country invading another sovereign country using the most brutal war possible,” Hill said. — This is not a civil war. This is an invasion by a UN P5 member that violates every international law we know. And therefore, when there is a peaceful settlement, Russia owes this sovereign neighbor some form of compensation. This is a great way to create a fund to rebuild Ukraine after peace.
The Biden administration also embraced the idea. A White House National Security Council spokesman said the administration supports the goals of "a credible bipartisan repo bill for Ukrainians introduced in the Senate." The administration is also actively negotiating with allies and partners, including the G7, "to ensure we're all coordinated to make Russia pay."
House foreign affairs staff Republicans said the differences between the House and Senate approaches could be bridged and that the actual impact of the two plans would be close, if not identical. Sen. Rand Paul (R-Ky.) was the lone vote against the Senate version in committee.
But repo accounts aren't the only game in town. Some House Democrats are also pushing for the chamber to consider a separate bipartisan bill from Rep. Lloyd Doggett (D-Texas) that would impose a 100 per cent tax on income from Russian assets, echoing an approach taking shape in Europe. One House Democratic aide said it could "get broad international support, and it will pay off over time."
The bills can move forward together, as they did after approval by the House Foreign Affairs Committee, Doggett said in a statement. — I co-authored the repo law with Chairman [Michael] McCall, and he supports my bill. We are both looking for every reasonable way to bring [Vladimir] Putin to justice and offer at least modest restitution to long-suffering Ukraine.
What happens if Congress passes REPO? Nicolas Veron, a senior fellow at the Peterson Institute, said he was "very sceptical" that the US would act on the assets before Europe. European leaders face many fears that could hold them back, including concerns about the euro's future as a reserve currency and Russian retaliation.
In contrast to the paralyzed US Congress, Europe has pledged to provide Ukraine with €50 billion in aid in addition to receiving revenues from Russian assets.
I think the US is unlikely to confiscate without doing it jointly with the Europeans,” said Veron, who is also a senior fellow at the Bruegel think tank in Brussels. — This would create the perception that holding reserves in dollars is more risky than in euros, and I'm not sure that the US government wants to do that.
What is known about the plans of the House of Representatives to consider aid to Ukraine
According to Congressman Mike Turner, the Speaker of the US House of Representatives, Mike Johnson, is ready to consider funding aid to Ukraine.
Turner noted that the issue of additional financing of aid to Ukraine should be considered after the return of members of the House of Representatives from their Easter vacation.
The Speaker made very clear statements that when we come back, this will be the next major item on the agenda. "After we just passed all the bills that fund the federal government, I believe it will have overwhelming support in Congress and we will put the bill on the president's desk," Turner said.
According to him, Johnson demonstrated that he supports Ukraine.
He made these statements publicly, as well as to the Secretary General of NATO, Turner stressed.
