About $ 100 billion of the Russian Central Bank is frozen in US accounts, and Washington has a legal right to “liquidate” it, turning it into aid for Kyiv.
Given that Vladimir Putin continues his bloody invasion of Ukraine, investigators from the US Treasury Department and the Justice Department are looking for and arresting Russian yachts, estates, and other troubles of his regime. In Washington, meanwhile, congressmen Tom Malinowski of New Jersey and Joe Wilson of South Carolina are pushing for initiative from both parties to find out what powers the executive has to liquidate these Russian assets.
This initiative is extremely important. However, efforts to promote it are not quick and persistent enough to provide Ukraine with what it needs. Lawrence Tribe, a professor of constitutional law at Harvard University, writes about this in the pages of the New York Times. Even if the Department of Justice could sell all the yachts and estates of the oligarchs in the coming months, directing the money to military and humanitarian aid, the process would be too slow. He would not be able to provide the Armed Forces with tanks, air defense missiles, food and medicine in a timely manner. The war has been going on for eight weeks. And its price is rising. At some point, Americans may not be able to afford to refuse to pay their bills.
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The obvious solution lies on the surface. President Joe Biden could liquidate tens of billions of dollars of Russia's foreign exchange reserves that the Russian Central Bank holds in US accounts. According to some estimates, the total amount reaches 100 billion dollars. These assets are already frozen in the Federal Reserve and other banks due to sanctions imposed by the US Treasury, banning all transactions of the Russian Central Bank. New data on the atrocities of the Russian army makes the lifting of these sanctions virtually impossible. So this money, it turns out, is withdrawn forever. Eliminating them will not only be the fastest way to increase American aid to Ukraine without burdening American taxpayers. It will also send a clear signal that the United States is ready to make even the most powerful countries in the world pay if they commit war crimes.
At first glance, this is too radical a step. That's why Washington hasn't done that yet. But the author assures that such liquidation of Russian money will not be “unprecedented”. The United States has previously directed the finances of hostile foreign governments to various humanitarian needs. In 2003, President George W. Bush withdrew about $ 1.7 billion held by the Iraqi government in US banks. The money was used to help the Iraqi people and to pay compensation to victims of terrorism. In 2012, Congress used the frozen assets of the Central Bank of Iran to make payments to the families of Iranian terrorist attacks. In 2019, the Trump administration directed some frozen assets of the Central Bank of Venezuela to finance the work of Venezuelan opposition leader Juan Guaido. And in February, the Joe Biden administration began the process of liquidating the assets of the Central Bank of Afghanistan for $ 7 billion, refusing to transfer them to the Taliban. Half of the money went to Afghan humanitarian programs and half to the families of those killed and injured in the September 11, 2001 terrorist attacks. Therefore, the author proposes to do the same and direct Russian money to help humanitarian organizations and directly to the Government of Ukraine.
Because state reserves are the property of the Russian government, unlike the oligarchs' frozen yachts, they are not protected by private property laws. The Fifth Amendment prohibits the government from confiscating property “without due process of law,” but only “persons,” not foreign governments. And the Supreme Court clearly ruled in 1992, as did many US federal courts since. The ban on “seizure” of property “without compensation” also applies only to “private property”. And Russia's state reserves do not fall into this category.
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Of course, the government in Moscow will complain bitterly and call such liquidation of assets “theft.” He had already said this when sanctions were imposed. But Russia's violations of the basic principles of international law and human rights weigh more than Russia's selfish rhetoric. on the basis of “sovereign immunity”. But this immunity protects foreign assets from litigation, not from liquidation by decision of Congress and the executive branch.
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