Top Biden administration officials have spent the last year quietly trying to figure out how to divert billions of dollars in frozen Russian money to cash-starved Ukraine.
The proposal the US has hit on, described in detail here for the first time, is based on a novel legal theory to justify seizing and transferring to Ukraine the roughly $300 billion in Russian Central Bank assets which have been frozen in the West since Russia invaded Ukraine in February 2022.
“The White House and the US government believe Russia should be on the hook for paying for all of the damage and destruction they have caused in Ukraine,” a US official said.
But the rare maneuver would require buy-in from US allies in the Group of 7 (G7) to have a real impact, officials said. The vast majority of Russia’s central bank assets that were frozen by the G7 and the European Union are held by the EU, with the US only holding around $5 billion worth, officials told CNN.
It would also require Congress to pass a bill introduced last year, called the REPO Act, that gives the president authority to move forward with seizing Russian assets held in the US.
Senior Biden officials have been working both with G7 allies – which include Canada, France, Germany, Italy, Japan, the UK and the EU – and US lawmakers to refine the proposal, which rests on the idea that nations affected by Russia’s violations are permitted under international law to try to force Moscow back into compliance using the law of countermeasures.