U.S. can now seize Russian assets and use them for Ukraine. What to know

The big U.S. aid package for Ukraine signed Wednesday allows the administration to seize Russian state assets located in the U.S. and use them for the benefit of Kyiv.

The big U.S. aid package for Ukraine and other allies that President Joe Biden signed Wednesday also allows the administration to seize Russian state assets located in the U.S. and use them for the benefit of Kyiv.

That could mean another $5 billion in assistance for Ukraine, coming from Russian Central Bank holdings that have already been frozen in the United States. The seizures would be carried out under provisions of the REPO Act, short for the Rebuilding Economic Prosperity and Opportunity for Ukrainians Act, that were incorporated into the aid bill.

But it’s not likely the U.S. will seize the assets without agreement from other members of the Group of Seven nations and the European Union.

The U.S. and its allies immediately froze $300 billion in Russian foreign holdings at the start of Moscow’s invasion of Ukraine. That money has been sitting untapped — most of it in European Union nations — as the war grinds on. But roughly $5 billion of it is located in the U.S.

The frozen assets are immobilized and can’t be accessed by Moscow — but they still belong to Russia. While governments can generally freeze property without difficulty, turning that property into forfeited assets that can be sold for the benefit of Ukraine requires an extra layer of judicial procedure, including a legal basis and adjudication in a court.

For more than a year, officials from multiple countries have debated the legality of confiscating the money and sending it to Ukraine.

The new U.S. law requires the president and Treasury Department to start locating Russian assets in the U.S. within 90 days and to report back to Congress within 180 days. A month after that period, the president will be allowed to “seize, confiscate, transfer, or vest” any Russian state sovereign assets, including any interest, within U.S. jurisdictions.

But the U.S. wants to keep consulting with global allies and act together, which is likely to slow down the process.