As part of the United States governments effort to support Ukraine in its war against Russia, the Biden Administration sent to Congress a number of legislative proposals in addition to a supplemental request for an additional $33 billion in funding. The legislative package addresses a number of important issues and is aimed at assets owned by the Russian government and oligarchs.
The proposal includes:
- Revisions of forfeiture laws to expand and expedite the forfeiture of property tied to Russian kleptocracy, to permit the government to use the proceeds to support Ukraine and add to law enforcement tools used to investigate financial crimes.
- A proposal to streamline administrative authority involving the Department of Treasury and the Justice Department to seize and forfeit oligarch assets located in the United States and connected to illegal activity.
- Procedural changes to expedite federal court review of any decision forfeiting such assets.
The proposed legislation includes several changes to criminal and forfeiture laws to provide additional tools for prosecutors and law enforcement to hold oligarchs accountable. Given the complexity of international investigations and the need to collect evidence from multiple jurisdictions, the proposed legislation includes procedural reforms to enhance international investigations of oligarchs.
The legislation proposes to: (i) create a new criminal offense, making it illegal for a person to knowingly or intentionally possess proceeds from corrupt activities of the Russian government; (ii) amend forfeiture laws to include property that Russian oligarchs use to facilitate the evasion of sanctions; (iii) amend the RICO laws to add the crime of sanctions evasion as a RICO predicate under the definition of “racketeering activity;” and (iv) extend the statute of limitations from five to ten years for money laundering prosecutions and asset forfeitures involving foreign offenses.
On a broader note, the proposal would amend DOJ and Treasury Department authorities to authorize the use of forfeited oligarch funds to remediate harms caused to Ukraine by Russian aggression. Under the proposal, the Departments of Justice, Treasury, and State will work together to use forfeited funds related to corruption, sanctions and export control violations, and other specified offenses to remediate harms of Russian aggression toward Ukraine.
Also, the proposal would enhance the United States’ ability to enforce foreign restraint and forfeiture orders against assets in the United States.
The United States has been aggressively pursuing Russian-connected assets. DOJ and the Treasury Department established the Russian Elites, Proxies and Oligarchs Task Force (REPO Task Force) that has been working with international partners to freeze and seize Russian assets around the world. The EU has reported freezing $30 billion in assets, including nearly $7 billion in boats, helicopters, real estate and artwork.
The REPO Task Force countries have seized dozens of yachts; the Treasury Department has sanctioned and blocked vessels and aircraft worth $1 billion and frozen hundreds of millions of dollars of assets in U.S. bank accounts. The Treasury Department is focused on sanctions evasion networks and recently designated a multi-party network of entities and individuals involved in such activity.