The mega-yachts and luxury real estate seized from Russian oligarchs is worth billions of dollars, yet the Justice Department is limited in what it can do with those assets. Now, the Senate is working on a bipartisan bill to allow proceeds from sanctioned assets to fund Ukraine’s reconstruction.
“This illegal amount of money is marked by corruption and stained with blood,” Sen. Chuck Grassley, R-Iowa, said. “In this way, these Russian criminals are no different than ruthless, violent drug-trafficking cartels or otherwise sophisticated cash rich criminals.”
During a Judiciary Committee hearing Tuesday, senators laid out the legal system’s constraints. For instance, forfeiture is limited to assets valued at $500,000 or less, and the Justice Department is limited in its ability to transfer money to war crimes victims.
The Justice Department is making the following suggestions for the bill:
- amend International Emergency Economic Powers Act penalty provision to extend existing forfeiture authorities to property, and not just proceeds;
- add criminal violations of IEEPA and the Export Control Reform Act to the definition of racketeering;
- extend statute of limitations from five to 10 years for money laundering tied to foreign offenses; and
- improve U.S. ability to work with foreign countries on seizing assets.
“Our targets (Russian Oligarchs) have profited and continue to profit from a system of corruption,” Justice Department attorney and Director of Task Force KleptoCapture Andrew Adams said. “Their willingness to facilitate and acquiesce in Russia’s malign activities contributes to the death and destruction we are seeing every day in Ukraine.”
Another expert witness in the hearing said legislation should focus on Russian oligarchs, not sovereign assets, because that would greatly complicate and hinder efforts to seize and transfer proceeds to Ukraine.
The Russian Elites, Proxies, and Oligarchs Task Force, also known as REPO, has so far blocked or frozen more than $30 billion in sanctioned Russian assets and immobilized $300 billion worth of Russian Central Bank assets.
“We are seeking to maximize the impact of sanctions on designated persons and entities while guarding against spillover that affects global commodities markets and food supplies, which Russia has disrupted by choosing and continuing to wage war,” REPO task force members from around the world said in a joint statement.
Ukraine’s prime minister has said the country has incurred $100 billion in infrastructure losses, and a full fledged recovery will cost $750 billion.
President Volodymyr Zelenskyy has spread the message that Ukraine will need help from around the world.
“Therefore, the reconstruction of Ukraine is not a local project, not a project of one nation, but a joint task of the entire democratic world — of all countries, certainly all countries that can say about themselves — we are civilized,” Zelensky said during a nightly address.