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Current Affairs

US law to sell off Oligarchs’ assets

Date: 02 May 2022 Tags: Miscellaneous

Issue

US President Joe Biden has announced his intention of passing a law to sell assets of Russian Oligarchs seized in US and using the money to rebuild Ukraine.

 

Background

Western countries have seized most of the assets of Russian Oligarchs such as luxury yachts, planes and villas.

 

Details

  • There are high costs involved in defending Ukraine and a large sum is needed to rebuild the nation after Russia’s invasion.

  • The Asset Seizure for Ukraine Reconstruction Act has been passed by the House. It allows president to confiscate and liquidate property owned by sanctioned individuals. 

  • The money generated through selling could only be used for specific purposes. A new criminal offense is introduced.

  • It makes an offense to knowingly own proceeds directly obtained from corrupt dealings with the Russian government.

 

Need for legislation

  • Currently, only the Justice Department has the authority to determine how seized funds can be spent. There are strict rules on beneficiaries.

  • The new law will make it easier to determine how to spend the proceeds of the blocked and seized property.

  • The decisions made on forfeiture of property will be reviewable in federal court on an expedited basis.

 

Current seizures

 The Treasury Department has sanctioned and blocked vessels and aircraft worth over $1 billion, and has frozen bank accounts containing millions of dollars.

 

Other provisions

  • Funds can be used for purposes like post-conflict reconstruction of Ukraine, support for Ukrainian refugees, weapons for Ukraine’s military and humanitarian support for the Russian people.

  • Assets can be seized within two years of enactment of bill if Russia is still engaged in war and assets are more than $5 million.

 

Challenges associated

  • The actual seizure and liquidating the assets could take years as all legal challenges have to be suitably countered.

  • The government has to pay for maintaining the asset until it is sold off at an auction and fund credited to forfeiture account.