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US takes step closer to sending Russian oligarchs' billions straight to Ukraine

On Thursday, President Joe Biden announced a proposal to get even more aggressive with the billions seized from Russian oligarchs who have close ties to Vladimir Putin.

The White House released the outlines of what it calls a new comprehensive legislative package around Ukraine that includes provisions to “streamline the process for seizure of oligarch assets, expand the assets subject to seizure, and enable the proceeds to flow to Ukraine,” the White House said.

The move on oligarchs and their yachts is part of a larger proposal for Ukraine that seeks another $33 billion for aide for the country. The funding request includes over $20 billion for military assistance as well as economic and humanitarian aid.

In recent weeks, a range of lawmakers have been pushing plans to sell the yachts, apartments, art, and estates of Putin’s allies and give the money to Ukraine as it tries to defend itself in a war waged by Russia since February. The idea has been gaining momentum and took a major step forward this week, in addition to the White House's announcement.

On Wednesday night, the House of Representatives overwhelmingly passed a bill called the Asset Seizure for Ukraine Reconstruction Act aiming to send seized assets to the former member of the Soviet Bloc.

“Under these extraordinary circumstances, the international community should be prepared to use Russia’s frozen assets to rebuild the country Russia is destroying,” co-sponsor Rep. Tom Malinowski (D-NJ) said in a statement.

U.S. President Joe Biden delivers remarks during the Council of Chief State School Officers' 2022 National and State Teachers of the Year event, in the East Room at the White House, in Washington, U.S., April 27, 2022. REUTERS/Evelyn Hockstein
President Joe Biden at the White House on Wednesday. (REUTERS/Evelyn Hockstein) (Evelyn Hockstein / reuters)

Former CIA Officer Alex Finley recently estimated that at least 16 yachts linked to Russian oligarchs worth billions in total have been seized since Russian invaded Ukraine on Feb. 24. A range of other assets, from private planes to estates, also sit idle as part of the sanctions imposed by nations around the world.

'I want to put money on the table'

In the U.S,. much of the attention now is likely to move to the Senate where lawmakers have a similar proposal and those across the political spectrum say they want to get this done.

“I want to see the Department of Justice, Treasury, and law enforcement partners go in and take apartments, fine art, and seize yachts from a bunch of thugs and crooks,” Sen. Lindsey Graham (R-SC) said Wednesday. “I want to put money on the table to have more weapons for Ukraine to fight.”

The outlines of the White House proposal released Thursday are very similar. Biden is ​​asking Congress for expanded powers when it comes to seizing and repurposing Russian oligarchs' assets.

The president will propose that the Justice, Treasury, and State departments collaborate to take funds that are forfeited for a host of reasons — from corruption to sanctions to export control violations — to be used to “remediate harms of Russian aggression toward Ukraine.”

The Biden proposal would also include provisions to make it easier for the U.S. to work with foreign partners on asset seizures linked to foreign corruption and would criminalize knowingly possessing "proceeds directly obtained from corrupt dealings with the Russian government.”

Working with the world

Earlier this month, U.S. officials worked with Spanish authorities to seize a $90 million yacht linked to sanctioned Russian Oligarch Viktor Vekselberg. It appears to be the first recent Russian oligarch-linked yacht seizure that directly involved the U.S. government.

Spanish Civil Guards stand by the Tango superyacht, suspected to belong to a Russian oligarch, as it is docked at the Mallorca Royal Nautical Club, in Palma de Mallorca, in the Spanish island of Mallorca, Spain, April 4, 2022. Juan Poyates Oliver/Handout via REUTERS   THIS IMAGE HAS BEEN SUPPLIED BY A THIRD PARTY. MANDATORY CREDIT.
Spanish Civil Guards stand by the Tango superyacht, suspected to belong to a Russian oligarch, as it is docked in the Spanish island of Mallorca (Juan Poyates Oliver/Handout via REUTERS) (Handout . / reuters)

But currently other nations around the world control most of the seized assets. Under current U.S. law, sanctioned assets are in a state of legal limbo and could theoretically be returned to their owners.

During his most recent State of the Union address, Biden pledged to seize "ill-begotten gains" of Russian oligarchs. If the movement continues to pick up steam around the world, Ukraine could receive billions for its eventual rebuilding.

Ben Werschkul is a writer and producer for Yahoo Finance in Washington, DC.

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