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US could confiscate $5-8bn of Russia's assets to use for Ukraine's recovery

This is not as much money as Europe has, but the precedent could be an example for EU countries. 

US could confiscate $5-8bn of Russia's assets to use for Ukraine's recovery
Photo: EPA/UPG

The U.S. Congress is preparing a bipartisan bill that would allow for the confiscation of $5-8 billion of Russian sovereign assets under U.S. jurisdiction and use them to finance Ukraine's reconstruction. According to Politico, discussions of these plans will intensify in the coming weeks when Congress passes a new bill to help Ukraine.

If the legislation on asset seizure and transfer is supported, it will become a powerful financial tool in the hands of the US president, which could change modern economic diplomacy. The idea of using frozen Russian assets to support Ukraine was also voiced on Sunday by House Speaker Mike Johnson.

He also signaled that Republicans may try to supply some aid to Ukraine as a loan and are considering expanding natural gas exports to prevent funding the Russian war machine.

A serious concern among some lawmakers eager to help Ukraine is that this could be seen as a substitute for additional aid, which has been stalled for months, but Congress has denied this.

It is also likely that the US decision to provide Ukraine with Russia's confiscated assets will push Europe to take a similar step, which has so far only dared to use the profits from these assets.

"This will significantly strengthen the US ability to seize reserves if it decides to do so. It's important because even though the US doesn't have a lot of reserves - they're mostly in Europe - it would give the US more leverage to push the Europeans to do more," said David Wessel, director of the Hutchins Center on Fiscal and Monetary Policy at Brookings. 

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