In another recent development,
NYT: Biden is eyeing using $300B in frozen Russian assets to help Ukraine
When Russia invaded, the West froze and stole $300 billion of Russia's money held in Western banks. The plan was to send it to Ukraine after the war for reparations and rebuilding but it looks like they are considering sending it now.
U.S. and Europe Eye Russian Assets to Aid Ukraine as Funding Dries Up
Biden is eyeing using $300B in frozen Russian assets to help Ukraine. It could backfire.
From NYT:
" 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.
But the administration, in coordination with the Group of 7 industrial nations, has begun taking another look at whether it can use its existing authorities or if it should seek congressional action to use the funds. Support for such legislation has been building in Congress, giving the Biden administration optimism that it could be granted the necessary authority.
The talks among finance ministers, central bankers, diplomats and lawyers have intensified in recent weeks, officials said, with the Biden administration pressing Britain, France, Germany, Italy, Canada and Japan to come up with a strategy by Feb. 24, the second anniversary of the invasion."
“This amount of money that we’re talking about here is simply game-changing,” said Philip Zelikow, a State Department official in both Bush administrations and a senior fellow at Stanford University’s Hoover Institution. “The fight over this money which is occurring is actually in some ways the essential campaign of the war.”
Seizing such a large sum of money from another sovereign nation would be without precedent, and such an action could have unpredictable legal ramifications and economic consequences. It would almost certainly lead to lawsuits and retaliation from Russia.
In a sign that some European countries are ready to move forward with confiscating Russian assets, German prosecutors this week
seized about $790 million from the Frankfurt bank account of a Russian financial firm that was under E.U. sanctions.
The Biden administration has said little in public about the negotiations. At the State Department on Tuesday, Matthew Miller, a spokesman, said: “It’s something that we have looked at. There remains sort of operational questions about that, and legal questions.” He said he did not have more information.
Very little of the Russian assets, perhaps $5 billion or so by some estimates, are in the hands of U.S. institutions. But a significant chunk of Russia’s foreign reserves are held in U.S. dollars, both in the United States and in Europe. The United States has the power to police transactions involving its currency and use its sanctions to immobilize dollar-denominated assets.
One Group of 7 official said the coalition had been considering a variety of options for how to use Russia’s assets, with the goal of putting forward a unified proposal around the second anniversary of the war, when many top officials will be gathering in Germany for the Munich Security Conference. The first debates have focused on what would be permissible under international law and under each nation’s domestic laws, as they consider Russia’s likely legal responses and retaliatory measures. "