US makes first transfer of confiscated Russian assets to rebuild Ukraine

Monday, 19 February 2024
The US government has transferred USD485,000 of forfeited Russian funds to help repair Ukraine's damaged civil infrastructure.

It is the US's first transfer of Russian assets for the express purpose of assisting Ukraine. The funds are being moved via Estonia because the US Department of Justice (DoJ) does not yet have the legal authority to make the transfer directly to Ukraine.

The Russian money was wired to the US in March 2023, via intermediaries acting for a Latvian company, which was attempting to procure a US-made machine tool allegedly for shipment to Russia. The DoJ intercepted and confiscated the funds en route, under the anti-Russian sanctions legislation. The Estonian prosecutor-general has aided the US in charging six individuals and companies that were part of the procurement scheme, and last week Vadims Ananics, general manager of Latvia-based CNC Weld, pleaded guilty to violating US export laws and regulations.

The US DoJ's seizure agency, Task Force KleptoCapture, has ordered the forfeit of a further EUR342,000 as part of a criminal sentence imposed on one of the shell companies involved in the transaction. These funds have not yet been released by Latvia, pending enforcement of the US forfeiture order.

The action is part of the DoJ's plan to 'seek and develop novel solutions to ensure that the profits of Russian criminal networks are redirected for the support of the Ukrainian people'. US Deputy Attorney-General Lisa Monaco said that the plan includes 'working with Congress to expand our ability to transfer forfeited assets to Ukraine'. But she said the DoJ is not waiting for Congress and will use its existing authorities to support Ukraine's response.

In February 2023, president Biden signed the Consolidated Appropriations Act, 2023 into law, authorising the DoJ to sell assets forfeited by sanctioned Russian individuals and entities and send the proceeds to Ukraine as aid. In June 2023, the US government issued regulations requiring US persons to report any possession or control they have over property belonging to certain Russian government entities.


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