The top Republican on the US Senate foreign relations committee has introduced legislation authorising President Joe Biden to seize Russian sovereign assets and transfer them to Kyiv for the long-term reconstruction of Ukraine.
The move comes as both parties in Congress are increasing pressure on the Biden administration and its allies to find ways for Russian money to fund the billions of dollars that will be needed to rebuild Ukraine, rather than western taxpayers.
The bipartisan bill was filed on Thursday by Jim Risch, the Idaho Republican senator and the party’s top member of the foreign relations committee, along with Sheldon Whitehouse, a Rhode Island Democrat on the Senate judiciary committee.
It argues Russia “bears responsibility for the financial burden of the reconstruction of Ukraine” and gives the president the ability to “confiscate” frozen Russian sovereign assets in the US, including Russian central bank assets, so they can quickly be directed to Ukraine.
In addition, it calls on Biden to push for the establishment of a “common international compensation mechanism” with foreign partners as an additional way to funnel the seized Russian money to Kyiv.
The bill has attracted some bipartisan support in the House of Representatives, which would have to approve the measure for it to become law. Michael McCaul, the Republican chair of the House foreign affairs committee, and Marcy Kaptur, an Ohio Democrat who co-chairs the House Ukraine caucus, are backing the legislation in the lower chamber.
Since Russia launched its full-blown invasion of Ukraine in February 2022, western countries have seized about $300bn of Russian assets.
On Capitol Hill there is a growing push for the US and its allies to use that money as talks intensify about the funding mechanisms for Ukraine’s long-term reconstruction, including at a conference to be hosted by the UK later this month on rebuilding the war-torn country.
Having Russian money fund a big chunk of Ukraine’s reconstruction would limit the price tag for western allies at a time when there are growing fears of waning political appetite for huge additional economic aid to the country. The legislation would also clarify the US president’s legal authority to take such action, making it harder to challenge in court.
Lawrence Summers, the former US Treasury secretary, and Robert Zoellick, the former World Bank president, have backed the bill, along with Laurence Tribe, the veteran constitutional law professor at Harvard University, and Razom for Ukraine, a Ukrainian-American advocacy group.
However, there are doubts in the US and EU over the viability of transferring frozen Russian assets to Ukraine for its reconstruction, which has made it difficult for western allies to settle on a plan. The EU, however, is considering ways to transfer profits, including interest payments, from Russia’s seized sovereign assets to Ukraine.
The Biden administration is still weighing what it can do with Russian sovereign assets and has not taken a position on the kind of legislation proposed by Risch and Whitehouse.
At a congressional hearing this week, Treasury secretary Janet Yellen said it was “critical that any next steps we take be done via careful consultation with allies and partners” given that most of the frozen Russian sovereign assets were outside the US.
“We’re examining a number of options, including some that we may be able to take under existing authorities,” she added.
Concerns over the act of confiscating and transferring Russian sovereign assets include that it could be destabilising for financial markets; set a precedent for such actions to be deployed as a foreign policy tool around the world; and encourage tit-for-tat responses from Moscow.
Some western diplomats may also be concerned that by directing these funds to the rebuilding of Ukraine, it could take the return of Russia’s sovereign assets off the table as a bargaining chip in a future negotiation over the settlement of the conflict.
But proponents of the move say the war in Ukraine is so unique that such a step is appropriate. “Given Russia’s brutality and continued war crimes against the Ukrainian people, it is only right that Russian government funds in the United States be seized and repurposed to help Ukraine win the war and rebuild its country,” Risch said in a statement to the Financial Times.
Additional reporting by Ian Johnston in Brussels
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