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Kyiv’s envoy backs using frozen Russian state assets to rebuild Ukraine

Lawmakers are debating use of the estimated tens of billions of dollars in Russian Central Bank funds located within the US

Ukrainian Ambassador Oksana Markarova attends a photography exhibition on the Russian invasion of Ukraine in the Capitol on April 28.
Ukrainian Ambassador Oksana Markarova attends a photography exhibition on the Russian invasion of Ukraine in the Capitol on April 28. (Tom Williams/CQ Roll Call)

The Ukrainian government backs the United States seizing and liquidating frozen Russian government assets and using the proceeds to benefit Ukraine’s war-ravaged citizens, Kyiv’s ambassador to Washington said Thursday.

“We fully support the idea to use those frozen assets in the future to compensate Ukraine and to use this money for the rebuilding and reconstruction effort,” Ambassador Oksana Markarova told reporters at an event organized by The Christian Science Monitor. “It would be, I think, not only fair but actually very according to the international law practices to use these frozen assets, to confiscate them and use them for the reconstruction processes.”

U.S. lawmakers in the House and Senate have been debating the legal pros and cons of using the estimated tens of billions of dollars in Russian Central Bank funds located within U.S. jurisdiction for such purposes. The Treasury Department in February froze Moscow’s access to the monies as punishment for its unprovoked war against Ukraine.

While there is strong bipartisan support for using the frozen assets of sanctioned — and corrupt — Russian oligarchs to benefit the Ukrainian people, going after the financial reserves of the Russian government is a different matter in terms of legal scope and because of potential foreign policy ramifications.

It is not clear exactly how much Russian Central Bank money is in the United States. As of the end of January, Russia’s foreign currency reserves were estimated at $630 billion, and nearly half that amount was estimated to be located in the United States, European Union countries and other Western nations that also moved to block the Kremlin’s access to it.

The Treasury Department did not respond to a request for information about just how much Russian government funding it has frozen.

On Wednesday, CQ Roll Call asked several senators who have played central roles in legislative debates over how best to support Ukraine how they felt about taking the extra step toward using the Kremlin funding, which could require new authorizing legislation.

All the interviewed senators said they were generally supportive, although a few said they needed to study the issue more to understand the legal implications and potential unintended consequences.

Some legal experts have said seizing and liquidating Russian government assets absent an international ruling on the legitimacy of the matter could have implications for U.S. taxpayers, particularly if Russia tries to insist it be recompensed by the United States in any potential peace settlement between Kyiv and Moscow. There are also questions about whether the United States would be setting a precedent that could be used to justify or excuse the seizure of overseas U.S. government-owned assets by a hostile foreign country.

Sen. Rob Portman, R-Ohio, the co-chair of the Senate Ukraine Caucus, told CQ Roll Call he “strongly believes it’s the right thing to do to seize rather than freeze these assets, and to use the proceeds to help the Ukrainian people, particularly on the humanitarian side.”

Portman is the co-sponsor of a bill with Sen. Michael Bennet, D-Colo., that would direct the Justice Department to place all the proceeds taken from the liquidation of assets as part of its recently announced “Task Force KleptoCapture” into a Ukrainian relief fund that the legislation would establish. That fund would be used, in consultation with the U.S. Agency for International Development, to provide humanitarian assistance to Ukrainian refugees and to rebuild areas of the country destroyed by Russia’s military attacks.

The task force, which was created in March, is an interagency law enforcement entity focused on fully enforcing U.S. sanctions against Russia, including by targeting those Russian government officials and Kremlin-allied elites who are deemed culpable in Russian President Vladimir Putin’s attack on Ukraine.

The Bennet-Portman bill, which is before Senate Foreign Relations, is similar to legislation that passed the House by an overwhelming bipartisan vote, 417-8, in late April.

“We are looking at all of the legal ramifications,” Senate Foreign Relations Chairman Bob Menendez, D-N.J., said when asked whether he supports seizing Russian government assets to financially benefit Ukraine. “Certainly, I want Russia to pay for Ukraine’s reconstruction. … We are looking at ways in which we can make them do that.”

The White House included in its $33 billion emergency spending request for additional military and economic assistance to Ukraine a proposal that Congress pass “legislation to streamline the process to recoup proceeds from seized and forfeited assets and use them to remediate the harm caused in Ukraine.” And Secretary of State Antony J. Blinken told a House panel last week that administration lawyers were studying what legal authorities would be needed to seize Russian government assets and use them to benefit Ukraine.

Sens. Jeanne Shaheen, D-N.H., and Marco Rubio, R-Fla., both said they were supportive of using Russian state assets to rebuild Ukraine, with Rubio saying he wanted to give more study to the potential “unintended consequences.”

Shaheen said she wasn’t troubled by the idea of seizing Russian assets and couldn’t “envision” that Moscow would have much of a legal case to insist it be paid back under any potential peace settlement with Ukraine because it was the unprovoked aggressor of the war.

For her part, Markarova, the Ukrainian ambassador, who traveled to Kyiv with Blinken and Defense Secretary Lloyd J. Austin III less than two weeks ago in her first visit since Russia’s invasion began, said it was time for Western governments to stop worrying so much about how Moscow would react to their efforts to support Ukraine — and punish Moscow.

“I think it is time for all of us who believe in democracy and freedom … to stop being afraid and essentially … say what we want to say to Russia, what we believe is the right thing to say rather than reflecting always how they would react to this. They have already shown how small respect they have for everything that is dear to us,” she said.

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