It’s time to use seized Russian assets against Putin and his cronies
The United States and allies have waged economic warfare against Russia for months, issuing a staggering volume of restrictive measures that include more than 6,000 targeted financial sanctions. Yet despite a remarkable level of coordination, purpose and unity from these governments, President Vladimir Putin shows no signs of backing down.
As warfare rages on, a new approach is needed to intensify pressure on Russia — and secure justice for Ukraine: lawfare.
It is time to pelt Putin and his oligarchs by using Russian money against him and them. The U.S. and its allies must move much more rapidly to allow the proceeds of sanctioned Russian foreign assets to be used to benefit Ukraine and its war-stricken people. The world has been too slow to take this step to ensure the global threat posed by Russian aggression meets a robust and real-time response.
This war has demonstrated that the principle of collective defense, which stands as a central pillar of the NATO alliance, cannot be limited to the physical battlefield. Lawfare, using legal systems and institutions as a means to an end, sometimes even in repressive regimes such as Putin’s, has been utilized like never before. Economic sanctions made possible through the multilateral economic structures of the post-World War II order have proven effective in depleting Russia’s ability to sustain a healthy economy while invading Ukraine, although of course more time is needed for these sanctions to take full effect.
The G7 countries and other democracies have wracked the Russian economy with some 6,162 targeted financial sanctions through mid-May, according to the Brookings Sanctions Tracker — which two of us edit and know intimately. While they have identified and frozen Russian state assets and many proceeds of Russian kleptocracy, they have yet to seize and use them toward supporting and rebuilding a free Ukraine.
Canada’s Foreign Minister Melanie Joly recently announced that Canada will change its laws to allow the government to seize and redistribute sanctioned foreign assets to wartime victims and to help rebuild Ukraine. According to Joly, “These changes would make Canada’s sanctions regime the first in the G7 to allow these actions.”
Shortly after Canada’s declaration, the White House proposed similar legislation to allow U.S. authorities to liquidate the assets of Russian oligarchs and send the proceeds to Ukraine. Under current law, the United States cannot typically seize or convey assets of sanctioned individuals. The new proposal suggests the Departments of Justice, Treasury and State work together to use forfeited funds to remediate the harms of Russian aggression in Ukraine.
There is no reason to delay action on this urgent priority.
Importantly, both the U.S. and Canadian proposals comply with due process. The White House plan contains a streamlined administrative procedure for the forfeiture of property held by sanctioned Russian oligarchs and includes an expedited federal judicial review of all forfeiture decisions. The new Canadian legislation would likewise require a Superior Court judge to ultimately order the forfeiture of seized assets. So this lawfare is, in a word, winnable.
Neither country is meeting a foreign autocratic impulse with unchecked retaliation against private property. Both proposals work within the structure of liberal democracy and in furtherance of — not a deviation from — the rule of law. “The history of American freedom is in no small measure the history of procedure” and these proposals demonstrate that we need not abandon that history as we respond to global crises created by autocrats and kleptocrats.
The process does not have to supplant efficacy, so long as our actions are multilateral and coordinated. Thus far, the frozen assets of sanctioned Russian oligarchs in the United States amount to less than $2 billion, which is less than 3 percent of the estimated damages sustained by Ukraine’s civilian infrastructure. The European Union, on the other hand, has frozen oligarchs’ assets worth more than tenfold of those frozen in the United States. The Canadian and U.S. seizures will make a small dent in the billions needed for Ukrainian reconstruction. To make a real impact, they need fast and furious coordination across the Atlantic. Swift action in North America will set the model — and vigorous advocacy to our allies will drive it home.
Both the U.S. and Canada recognize that real reparations will come from a coordinated global campaign rather than through unilateral action. The Canadian Minister of Foreign Affairs noted that her government’s proposal is partly meant to persuade other allies in the G7 to consider comparable legislation. Similarly, the White House proposal is expressly written to improve the United States’ ability to work with international partners to recover assets linked to foreign corruption and includes amendments to improve their ability to enforce foreign restraint and forfeiture orders in this country. The U.S. and Canada have laid the legal groundwork to help war victims in real-time. Now, their allies must do the same to show Putin the real power of revitalized and united democracies.
Helpfully, the EU has created a Freeze and Seize task force to help address issues like these. Just last week, it proposed preliminary rules on freezing and confiscating assets of Russian oligarchs and others. While the predominant EU focus is on criminal penalties, it is a step in the right direction and offers a basis for the U.S. and Canada to engage for more.
As President Biden remarked last month at the Royal Castle in Warsaw, Putin’s war of choice in Ukraine “has managed to cause something I’m sure he never intended: The democracies of the world are revitalized with purpose and unity found in months that we’d once taken years to accomplish.”
This unity and purpose must coalesce around our best traditions of process, procedure and the rules of law, but also signal our resolve toward real solutions of providing the weaponry to defend, and money to rebuild, a free and independent Ukraine.
Norman Eisen, retired ambassador to the Czech Republic, is a senior fellow in Governance Studies at Brookings and an expert on law, ethics, and anti-corruption and a legal analyst for CNN. Charles T. Kotuby Jr. is a professor at the University of Pittsburgh School of Law. Robin Lewis is a senior research associate and associate fellow in the Governance Studies program at the Brookings Institution.