The U.S. Justice Department is pressing Congress for additional authority to funnel seized Russian assets to Ukraine.
In December, Congress authorized the Justice Department to transfer assets seized from sanctioned Russian oligarchs to the State Department for Ukrainian reconstruction. But the power applies only to assets confiscated in connection with violating U.S. sanctions under certain presidential executive orders.
As a result, millions of dollars’ worth of Russian properties confiscated in violation of U.S. export controls and other economic countermeasures cannot be transferred.
Now, the Justice Department is urging Congress to expand the range of forfeited assets that it can transfer to Ukraine for rebuilding.
“We’re leaving money on the table if we don’t expand our ability to use the forfeited assets that we gain from enforcement of our export control violations and expanding the sanctions regimes that that transfer authority is applicable to,” Deputy Attorney General Lisa Monaco said during a Senate Judiciary Committee hearing on Wednesday. “So, I urge the Congress to give us the additional authority so we can make the oligarchs pay for rebuilding Ukraine, as well.”
Since Russia’s invasion of Ukraine in February 2022, the Justice Department, led by Attorney General Merrick Garland, has been cracking down on Russian oligarchs as part of the Biden administration’s response to the incursion.
The law enforcement agency set up a task force shortly after the invasion to enforce sweeping U.S. sanctions and export controls imposed on Russia.
Task Force KleptoCapture has since seized more than $500 million in assets owned by Russian oligarchs and others who support Moscow and dodge U.S. sanctions and export controls, Monaco said.
The seized assets include a $300 million super yacht owned by Russian billionaire Suleiman Kerimov and a $90 million yacht belonging to Viktor Vekselberg, another Russian oligarch.
The Justice Department has used its congressional authority to transfer seized Russian assets only once.
In February, Garland authorized the transfer of $5.4 million taken from a Denver-based bank account of sanctioned Russian oligarch Konstantin Malofeyev.
Last year, Malofeyev was charged by the Justice Department with violating U.S. sanctions imposed on him following Russia’s first incursion into Ukraine in 2014.
He is one of more than 30 Russian oligarchs and others to face U.S. charges of sanctions evasion, export control violations, money laundering and other crimes.
In addition to seizing the yachts and luxury homes of pro-Moscow oligarchs, Western governments have frozen more than $300 billion in assets of Russia’s Central Bank.
Despite calls by U.S. lawmakers and others that the assets be transferred to Ukraine, the U.S. and other G-7 countries have agreed that they will remain “immobilized” until Russia ends its invasion.
Ukraine’s reconstruction is projected to require more than $400 billion.
Democratic Senator Richard Blumenthal said “the real money” was in the frozen Russian funds and asked Monaco if the Justice Department needed more power to transfer them to Ukraine.
Monaco noted that most of the funds were held abroad and that using them for Ukraine posed thorny legal questions, but she insisted that Russia must ultimately pay for Ukraine’s rebuilding.
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