Why Seizing Russian Assets to Fund Ukraine Is Fraught
Residents look through debris after Russian shelling in Kostiantynivka, Ukraine on March 7.
Photographer: Diego Herrera Carcedo/Anadolu/Getty ImagesSoon after Russia invaded Ukraine in February 2022, the US and its allies froze an estimated $280 billion of Russian sovereign assets parked in their banking systems. Ever since, they’ve been arguing about what to do with the funds. Washington wants to seize them to help pay for Ukraine’s fightback and support its shattered economy. Some European governments are wary of such a move, given the potential for unintended consequences. The issue is becoming more urgent by the day as Ukraine faces severe shortages of ammunition and Republican lawmakers are blocking $60 billion of US aid to Kyiv. President Joe Biden has pressed other Group of Seven nations to agree on a way to use the Russian assets by the time they meet in June.
Freezing an asset means it can’t be used, moved or sold, but its legal ownership doesn’t change. Seizing an asset — be it bonds owned by a central bank, a vehicle tied to drug-dealing or a sanctioned oligarch’s superyacht — transfers ownership to the seizing authority, which can use or sell the asset.