When the House voted to pass Biden’s long sought after foreign aid package Saturday, which will deliver over $60 billion to Ukraine, included in this was passage of the REPO Act, which paves the way for the Biden administration confiscate billions in Russian sovereign assets which sit in US banks.
The US administration has been pursuing a controversial plan to transfer frozen Russian assets to Ukraine for reconstruction, and has been aggressively lobbying G7 countries to jump on board, also given most of the $300 billion in Russian assets are held in Europe – particularly France, Germany, and Belgium.
A summary of the REPO Act – H.R.4175 – on the Congressional website, reads: “This bill requires or authorizes various actions related to the confiscation and disposition of Russian sovereign assets (which include funds and other property of Russia’s central bank, direct investment fund, or ministry of finance).”
“Under the bill, the President must require U.S. financial institutions to notify the Department of the Treasury of any Russian sovereign assets located at such institutions. The President may confiscate any such assets subject to U.S. jurisdiction,” it continues. “Confiscated funds and the proceeds of liquidated property must be deposited into the Ukraine Support Fund established by the bill.”
The now approved bill further specifies:
The Ukraine Support Fund shall be used by the Department of State to compensate Ukraine for damages caused by the Russian invasion. The Ukraine Support Fund may also support an international body or mechanism for (1) reconstruction and rebuilding efforts in Ukraine, (2) humanitarian assistance to the Ukrainian people, or (3) other purposes which support the recovery of Ukraine and the welfare of the Ukrainian people.
Importantly, it seeks to bring in international partners toward establishing a mechanism which would tap Russian assets in Europe. “The bill also directs the President to seek to establish, with foreign partners, an international mechanism to provide compensation to Ukraine using the Ukraine Support Fund and Russian sovereign assets confiscated by foreign partners,” the legislation summary says.
But some EU leaders have expressed anxiety over the plan and have thus far resisted, mainly on concerns that it would undermine global trust and confidence in Western banks. Moscow could also see what it deems theft of its sovereign funds as essentially an act of war.
On Monday, the Kremlin reacted to the weekend passage of the REPO Act, vowing to fight and inflict corresponding punishment on the US and West. Putin Spokesman Dmitry Peskov told reporters:
“We are very skeptical about this, because this is essentially the destruction of all the foundations of the economic system. This is an encroachment on state property, on state assets and on private property. By no means should this be perceived as legal action – it is illegal. And accordingly, it will be subject to retaliatory actions and legal proceedings,” the Kremlin official said.
“If such measures are implemented, of course, many investors will think ten times before making any investments in the American economy or storing their assets there,” Peskov added, noting there’s still a long, complex road ahead if Washington ultimately seeks to pull the trigger on stealing Russia’s assets. “This is a very dangerous precedent,” Peskov underscored.
Below: an interesting take from Sen. J.D. Vance…
Senator @JDVance1: “I have heard people in private in the United States Senate say that if the REPO Act passes, it will be used to control Donald Trump in the second administration. These people are telling us what they want to do. They’re going to do it unless we stop them.”🔥 pic.twitter.com/LJMvvAp65e
— Senator Vance Press Office (@SenVancePress) April 16, 2024
Starting in February, US Treasury Secretary Janet Yellen began getting more vocal on the “moral case” for using Russian assets to aid Ukraine, telling allies they must find a way to “unlock the value” of the hundreds of billions in immobilized Russian assets, also with an eye towards Ukraine’s post-war reconstruction.
Previously some Ukrainian officials floated the idea of “reparation bonds” backed by future claims for war damages against Moscow, and utilizing frozen Russian assets. These initiatives have gained steam under US leadership.
Tyler Durden
Mon, 04/22/2024 – 10:25
