In the News

How to Make Russia Pay for Ukraine

by Rep. French Hill and Hon. Lulzim Basha
Wall Street Journal
December 18, 2023

The world must stand united in the common goal to help Ukraine in the face of Russia’s illegal aggression and Vladimir Putin’s growing geopolitical threats throughout Europe. That’s why we, as two legislators on both sides of the Atlantic, have joined forces to make Russia pay for Ukraine’s long-term reconstruction consistent with the norms of international law.

In November, House Foreign Affairs Chairman Michael McCaul’s legislation, the REPO for Ukrainians Act, passed the committee 40-2. It would seize all Russian sovereign assets in the U.S., namely Russian central-bank reserves frozen at the Federal Reserve. An equally strong, complementary effort is proceeding through the Parliamentary Assembly of the Council of Europe. PACE’s Political Affairs Committee unanimously adopted a memorandum last week on the confiscation of Russian state assets.

Any national legislation must meet three objectives to ensure the best possible outcome for Ukraine. First, the U.S. must play a leadership role by working in close coordination with allies. Washington is doing so, advancing legislation that President Biden should sign into law whenever it arrives on his desk. Since only an estimated $8 billion of the roughly $280 billion in frozen or immobilized Russian sovereign assets are in the U.S., full multilateral cooperation is critical for success.

Second, legislation should maximize the potential monetary benefits to Ukraine at no cost to taxpayers. Two easy fixes could improve the U.S. legislation and be a model for others. All sovereign and state assets, including state-owned enterprises, should be defined clearly and included in any final legislation, not only central-bank reserves. Language in the House bill limiting the seizure to “dollar denominated” Russian assets or “wholly owned” state-operated enterprises should also be deleted. Minority shareholders can be protected separately.

Third, lawmakers should provide mandatory authority to the executive branch to seize and vest title and interest in the Russian assets for Ukraine’s benefit. That would avoid legal uncertainties and be supported by the international law of countermeasures.

The Council of Europe in May established a Register of Damages Caused by the Aggression of the Russian Federation Against Ukraine at The Hague, to which the U.S. is a signatory. The contemplated international funding mechanism and claims tribunal are referenced in both pending U.S. legislation and PACE resolutions and need to be enacted soon.

Given the urgency of helping Ukraine, the U.S. and Europe must present a united front against Russia by acting sooner rather than later. Mr. Putin must pay for his aggression and war crimes. Strong legislation to seize all Russian sovereign assets is a start.

U.S. action would send a compelling signal, urging the West to bolster its collective effort in support of Ukraine’s fight for its sovereignty, territory and democracy as Europe’s bulwark against Russian aggression. Collective action now would also put other authoritarian nations on notice that there are significant financial consequences under both international law and new national legislation for wrongful acts against sovereign countries.