The White House has thrown its support behind legislation that’s been introduced in Congress that would allow the use of frozen Russian central bank assets to fund Ukraine, Bloomberg reported.
About $300 billion in Russian central bank assets was frozen by the US and its allies after Russia invaded Ukraine in February 2022. The idea of outright stealing the money and giving it to Ukraine has been floated for a while, but the Biden administration has hesitated over the legality of the issue.
US officials have also been concerned that spending the Russian funds could make other countries hesitant to keep funds in dollars or at the New York Federal Reserve Bank, and thus speed up global de-dollarization. But according to Bloomberg, the White House’s National Security Council said that it welcomed “in principle” the legislation introduced in Congress to seize the funds.
“The bill would provide the authority needed for the executive branch to seize Russian sovereign assets for the benefit of Ukraine,” the NSC said in a memo to the Senate Foreign Relations Committee in November.
House Speaker Mike Johnson (R-LA) has also come out in favor of the plan. “It would be pure poetry to fund the Ukrainian war effort with Russian assets,” Johnson told The New York Post in November. “As you can imagine, that idea has been met with great enthusiasm on the Republican side. I suspect it will be with our colleagues on the other side as well. It’s an eminently responsible thing for us to do.”
Legislation was introduced in both chambers of Congress to give the Executive Branch the authority to establish a “Ukraine Support Fund” using stolen Russian funds. The bill has 14 bipartisan co-sponsors in the Senate and 62 in the House.
According to a summary of the bill, the Ukraine Support Fund could also be used to “support an international body or mechanism for (1) reconstruction and rebuilding efforts in Ukraine, (2) humanitarian assistance to the Ukrainian people, or (3) other purposes which support the recovery of Ukraine and the welfare of the Ukrainian people.”
News of the White House support for the legislation comes as the Biden administration is struggling to get the over $60 billion in funding for the proxy war in Ukraine that it’s requested from Congress. Republicans are still holding out for a border deal, and it’s unclear when an agreement will be reached.
Based on Russia’s foreign currency reserves at the time when they were frozen, there are about $67 billion in frozen Russian funds in the US. The bulk, approximately $200 billion, is frozen in Europe, and according to the Bloomberg report, it’s unclear if the EU will be on board with the plan.