The REPO Act: Confiscating Russian State Assets Consistent With U.S. and International Law

On June 15, Sens. Jim Risch (R-Idaho), ranking member of the Senate Foreign Relations Committee, and Sheldon Whitehouse (D-R.I.), in conjunction with Reps. Michael McCaul (R-Texas), chairman of the House Foreign Affairs Committee, and Marcy Kaptur (D-Ohio), co-chair of the Congressional Ukraine Caucus, introduced the Rebuilding Economic Prosperity and Opportunity (REPO) for Ukrainians Act.

The legal mechanisms proposed in the REPO bill empower the president of the United States to confiscate sovereign assets of the Russian Federation that are directly or indirectly owned by the government, the Central Bank, or the Russian Direct Investment Fund. Specifically, the REPO Act would create a domestic Ukraine Support Fund—consisting of Russian sovereign assets in U.S. financial institutions—that the secretary of state would administer in consultation with the administrator of the U.S. Agency for International Development (USAID) “for the purpose of compensating Ukraine for damages resulting from the unlawful invasion by the Russian Federation.” The bill authorizes specific purposes for the transferred funds, which include (a) reconstruction and rebuilding efforts in Ukraine; (b) providing humanitarian assistance to the people of Ukraine; and (c) such other purposes as the secretary determines directly and effectively support the recovery of Ukraine and the welfare of the people of Ukraine.

The REPO Act also instructs the president to work with allies and partners to establish an international compensation mechanism to transfer confiscated or frozen Russian sovereign assets to assist Ukraine, called the Common Ukraine Fund. This international fund would use assets from the domestic Ukraine Support Fund and contributions from foreign partners that have also confiscated Russian sovereign assets to compensate Ukraine. Bilateral and multilateral agreements between the U.S. and other Group of 7 (G-7) countries would prescribe the mechanisms for compensating Ukraine through the Common Ukraine Fund, such as orderly and transparent distribution of Russian assets. 

Among other provisions, the legislation prohibits the release of any frozen Russian sovereign assets until Russia ceases its hostilities and fully compensates—whether voluntarily or via asset transfer on its behalf—Ukraine for harms resulting from the invasion.

The REPO Act is a timely, carefully constructed bipartisan bill that signals the U.S. is prepared and willing to take on a leadership role for an economic counteroffensive to support Ukraine. The act is strategically sound, lawful, and morally right. 

Nevertheless, commentators Lee Buchheit and Paul Stephan have recently raised a few concerns about the REPO Act, claiming that the legislation is “flawed” and that “enacting REPO in its present form is a bad idea.” It is worth noting that Stephan published numerous articles arguing against the confiscation of Russian oligarch and sovereign assets in general, proposed alternative mechanisms such as countries that hold frozen assets conditioning their return on the Russian government “agreeing” to make reparations to Ukraine, and said assets should go to judgment creditors holding investment arbitration awards. It is welcome to see Stephan’s acceptance of the idea that international confiscation mechanisms to fund reparations have a place in the discussion. The purpose of this piece is to clarify any misconceptions or uncertainties about this critical legislation, the relevant law supporting it, and the flawed assumptions underlying its opposition.

 A recently published report by Kaplan, Hecker & Fink LLP on behalf of the Renew Democracy Initiative, principally authored by Harvard constitutional law scholar Laurence H. Tribe, more comprehensively expands on the points in this piece. (Apart from receiving an advance copy for the purpose of providing feedback, the author of this piece had no involvement with the writing of this report.) 

International Law and State Countermeasures

Some observers argue that customary international law safeguards state assets through the principle of sovereign immunity, but this misconstrues the doctrine of sovereign immunity. Sovereign immunity applies principally to the adjudicative actions of national courts. In other words, the doctrine of sovereign immunity bars the national court of one state from adjudicating in proceedings involving another state.

Foreign state property is protected from interference by another state’s executive authority not by sovereign immunity, but by principles and norms that govern the relations between foreign countries—including the interrelated principles of reciprocity, comity, and fair compensation for expropriation. However, these principles and norms are not absolute, particularly where Russia’s brazen and continual violations of international law justify their suspension under state countermeasures.

In the absence of a centralized enforcement authority or a universal mechanism for dispute resolution, countermeasures provide a permitted form of “self help” for ensuring compliance with international law. The doctrine of countermeasures is delineated in the UN International Law Commission’s Articles on Responsibility of States for Internationally Wrongful Acts (ARSIWA), which codify the customary international law in relation to countermeasures. 

A state may take countermeasures in response to the internationally wrongful act of another state, which is intended to bring the offending state back into compliance with its international legal obligations. Countermeasures are, by definition, state acts that would ordinarily be wrongful, but the wrongfulness of the act is “precluded” because the action is taken against another state for its violation of international law (ARSIWA art. 22). If the violation is of a legal obligation owed to the international community as a whole—that is, obligations erga omnes—any state can invoke Russia’s responsibility as if it were the primary injured state (ARSIWA arts. 42, 48). Thus, any state may insist that Russia perform its obligation to cease its war of aggression and compensate Ukraine or other beneficiaries (ARSIWA art. 48(2)(b)).

In effect, the countermeasure would lawfully suspend a state’s obligation of non-interference with respect to Russian state property, because Russia’s prior breach of peremptory norms of international law created a duty for it to compensate. The transfer of Russian sovereign assets to Ukraine operates as a temporary and narrow derecognition of the obligations concerning Russia’s property that the U.S. ordinarily owes Russia. The obligation can be resumed once Russia has returned to compliance, which means satisfying its debt to make full reparations to Ukraine (whether voluntarily or via “involuntarily” confiscation and transfer of its assets).

Because the transfer of Russian sovereign funds operates as a satisfaction of its debt toward Ukraine, Russia would be entitled to a return of its assets from transferring states only if the transferred funds exceeded its total liability for reparations. In practice, that will almost certainly not be the case, since even conservatively estimated damage that Russia caused to Ukraine (and the international community as a whole) far exceeds the known quantity of its frozen sovereign assets. Neither Ukraine nor the international community can afford to wait until Russia agrees to pay reparations, an outcome that at this stage seems almost impossible.

The REPO Act is based explicitly on the principles of countermeasures, stating that “all states are legally entitled to take countermeasures that are proportionate and aimed at inducing the Russian Federation to comply with its international obligations, including countermeasures that suspend ordinary legal obligations to the Russian Federation” (Section 101(a)(7)).

Frozen Russian State Assets Must Be Expeditiously Confiscated and Transferred 

Buchheit and Stephan set up a hypothetical in which a peace deal is reached that includes no Russian compensation for Ukraine, or for less than the amount owed. They argue that under such a deal, Russia might ask for the return of its money from third-party states where its funds are frozen, such as the U.S., which, they argue, would “find it difficult to say no.” They explain that this is a good reason for the states holding frozen Russian funds to transfer them to a separate entity as quickly as possible. 

To be sure, I wholeheartedly agree with the unequivocal necessity of transferring frozen Russian state assets as immediately as possible, before the end of the war—but for different reasons than set forth by Buchheit and Stephan. 

At the outset, it is difficult to conceive of Ukraine willingly consenting to any agreement that discharges Russia of its debts. If such a scenario were to occur, it would be one in which Ukraine, under duress due to Russia’s ongoing aggression, is coerced into waiving its right to reparations as part of a peace settlement. This raises the issue of what “consent” under duress in these circumstances means and, therefore, casts doubt on the validity of such an agreement. (This discussion is outside the scope of this article but merits consideration nonetheless.) 

Leaving the issue of consent under duress aside, there is no legal risk to the U.S. from Russian claims for its confiscated funds—because there is no realistic mechanism through which Russia could make those claims. There is no international tribunal that would have compulsory jurisdiction over a potential claim by Russia against the U.S. for alleged unlawful expropriation; the U.S. does not have a bilateral investment treaty with Russia; and the REPO Act precludes any U.S. judicial review of the confiscation measures. Ironically, Buchheit and Stephan are the ones who are, in effect, proposing to create legal risk by arguing for the inclusion of judicial review in the REPO Act.  

Thus, any claim for Russia’s confiscated reserves in the U.S. would have to be resolved through diplomatic means. Buchheit and Stephan omit reference to the G-7 Leaders’ Statement on Ukraine from May 19, in which the G-7 pledged that Russia’s sovereign assets would remain immobilized until Russia pays for the damage it has caused Ukraine—voluntarily (through a settlement) or not (through countermeasures such as the REPO Act). That commitment was publicly reaffirmed by U.S. and U.K. leaders in London in June, during the Ukraine Recovery Conference.

Nonetheless, as Buchheit and Stephan write, the funds should be sent directly and swiftly so that they are immediately available for the country’s recovery, especially to counteract the economic effects of the war. It is important that the use of these reserves be part of a strategy of supporting Ukraine during the war. And, as pointed out above, there is no cognizable difference in the legal risk between confiscating those funds now rather than waiting for the establishment of a suitable international compensation mechanism. In short, I agree with Buchheit and Stephan on the expediency of asset transfer, albeit for different reasons.

Use of Funds Under the REPO Act

Buchheit and Stephan also argue that the REPO bill does not ensure the money will do what the legislation says it will. Instead of compensating victims in Ukraine, Buchheit and Stephan worry the bill will simply allow the U.S. government to spend the money as it wishes—as long as the secretary of state sees some connection between the disbursements and the well-being of the Ukrainian people. The authors assert that were this the case, the funds would “almost certainly” be spent on providing arms supplies to Ukraine in the national interest of the U.S. Specifically, they take issue with Section 104(d)(C). But they read this provision in isolation from the rest of the section, which is reproduced in relevant part below: 

SEC. 104 

(d) USE OF CONFISCATED PROPERTY.—

(1) IN GENERAL.—Subject to paragraph (2), funds in the Ukraine Support Fund shall be available to the Secretary of State, in consultation with the Administrator of the United States Agency for International Development, for the purpose of compensating Ukraine for damages resulting from the unlawful invasion by the Russian Federation that began on February 24, 2022, including through, to the extent possible, the provision of such funds to an international body or mechanism charged with determining compensation and providing assistance to Ukraine, for purposes that include the following:                                   

(A) Reconstruction and rebuilding efforts in Ukraine.

(B) To provide humanitarian assistance to the people of Ukraine.

(C) Such other purposes as the Secretary determines directly and effectively support the recovery of Ukraine and the welfare of the people of Ukraine. [Emphasis added.] 

Their argument appears to be that the secretary of state will unilaterally use the confiscated funds to pay for support for Ukraine, thereby supposedly making the funds unavailable as compensation.

A specific provision must be read in its broader statutory context. Here, the REPO Act clearly ties the confiscation of Russian sovereign assets to the purpose of compensation. The act does so not only in the very same section that Buchheit and Stephan take issue with, but also consistently throughout the bill’s language. There is no reason to think that Secretary of State Antony Blinken would devise a way to circumvent the bill’s current language that plainly states that the purpose of the Ukraine Support Fund is to “compensat[e] Ukraine for damages resulting from the unlawful invasion by the Russian Federation.” To the extent that the terms “recovery” and “welfare” pose any ambiguity, there can be very little doubt that—based on every other provision of the bill—the confiscated funds are intended for compensation. The guardrails Buchheit and Stephan are looking for are already built into the REPO Act.

That said, if this point presents a genuine impasse on an otherwise critical bill, it can surely be amended to make this limitation even clearer. But this is not a compelling reason to not pass the bill.

 A Compensation Mechanism Can Be Flexible and Must Be Rooted in Justice

Buchheit and Stephan then proceed to discuss what an appropriate compensation mechanism might look like. They cite two precedents and consider how these mechanisms might provide a template for Ukrainian compensation: the Iran-U.S. Claims Tribunal (IUSCT) and the Compensation Commission (UNCC) created by UN Security Council Resolution 692 for the compensation of victims impacted by Iraq’s unlawful invasion of Kuwait. The authors then settle on the IUSCT as the best model for a Ukrainian compensation mechanism (at least compared to the UNCC). 

As the authors explain, the IUSCT was set up as part of the Algiers Accords of 1981. The purpose of the Algiers Accords was to put an end to the hostage crisis at the U.S. Embassy in Tehran. The IUSCT had the mission of adjudicating thousands of claims of individuals and entities relating to debts and contracts affected by the Iranian revolution, as well as expropriations and other measures affecting property rights. However, the Algiers Accords did not address either side’s liability for claims falling within the IUSCT’s jurisdiction and, therefore, left the issue of liability to be determined by the tribunal on a case-by-case basis. Additionally, the IUSCT ruled that it had no jurisdiction over claims concerning personal injuries, such as physical and psychological harm suffered by victims.

By contrast, the UNCC did not employ a tribunal and limited its scope to parties injured by Iraq’s invasion of Kuwait. Because the UNCC was a mechanism established to provide a measure of practical justice to those who suffered damage as a direct result of Iraq’s invasion and occupation of Kuwait, it did not include a category for claims by Iraq. Further, the resolution required member states to transfer Iraqi assets to the UNCC to fund Iraq’s obligations. Before the UNCC was up and running, countries with Iraqi assets first created national escrow accounts to hold the funds temporarily—analogous to the mechanism proposed in the REPO Act. For the war in Ukraine, the circumstances more closely match the UNCC experience, rather than the IUSCT. In comparison with the IUSCT, the UNCC’s mandate was formed on the basis that Iraq’s invasion was an ongoing illegal act of occupation and human rights violations, compared to a diplomatic standoff between the U.S. and Iran. 

Regardless, while the IUSCT and the UNCC are examples of compensation mechanisms, they are only two of more than 400 international claims processes that have been created in modern times. They are not intended to be limiting templates. Instead, international claims commissions are flexible and bespoke instruments that can take various forms. Establishing an international claims commission presents states with an array of choices—legal, financial, diplomatic, and practical—“sometimes borrowing concepts and procedures from each other, but often inventing unique solutions in light of particular legal and practical perspectives.” The Russian war of aggression and Russia’s consistent recalcitrance is a unique situation that requires an appropriately unique solution.

Buchheit and Stephan argue that there should be a tribunal-based claims process where both parties can make claims against each other. They write, “The challenge becomes designing a mechanism for dealing with confiscated assets that Russia and its sympathizers (countries such as Brazil, China, India, Indonesia, and South Africa, which do not support the invasion but also criticize the response of the U.S. and its allies) will accept … leaving the forum open to claims from both sides seems necessary.” The authors do not include their reasoning for why “Russia and its sympathizers’” approval of a mechanism meant for Ukrainian compensation is legally or politically necessary. One presumable reason for this position is the often-levied notion that any measures must be rooted in state consent, and that Russia’s assets can be used only if Russia consents (Buchheit and Stephan’s insistence on a tribunal to which Russia acquiesces being an extension of this position).

Assuming that is indeed the underlying reason for their statement, Russia’s approval of the compensation mechanism is not a legal necessity, and Buchheit and Stephan do not provide any support for the assumption that, under these circumstances, it is. Under the doctrine of countermeasures, “consent” is not required for states to act. Decentralized enforcement of obligations erga omnes is firmly established in international law, and countermeasures have long been recognized as extrajudicial state measures of self-help.                                     

State countermeasures can be, and typically are, employed outside of centralized UN processes (see ch. 6.2). In his treatise on state responsibility for wrongful acts, James Crawford (the former International Law Commission Special Rapporteur on State Responsibility), writes:

All the categories of self-help measures [such as countermeasures] ... share an emphasis on unilateral action; that is, they are taken by states acting alone (or alongside other like-minded states) to seek protection or performance of international legal rights and obligations. The measures are adopted as a consequence of the view of the reacting state that the target state has committed an internationally wrongful act. [Ch. 21.3, emphasis added.]                                   

Crawford emphasizes that measures decided by the UN and other international organizations are quite different from the choices of reacting states. Such institutions make decisions “within the framework of a system more or less centralized, which is precisely the element that justifies their being distinguished from countermeasures” (ch. 21.3).

Even so, the UN General Assembly, invoking its authority under the Uniting for Peace Resolution (allowing UN member states to address a situation in which the Security Council fails to act due to a lack of unanimity of its permanent members), gave member states the standing to act by establishing that Russia gravely breached the norms of international law and that this breach is a matter of common international concern. It has also established that Russia has a duty to compensate the states injured by its aggression and called upon member states to form “an international mechanism for reparation for damage, loss or injury, and arising from the internationally wrongful acts of the Russian Federation in or against Ukraine.”

But even though the General Assembly through its resolution gave member states the standing to act, a compensation mechanism need not necessarily be fashioned through the General Assembly because countermeasures are typically employed outside of centralized UN processes. Neither is a tribunal the only—or even the more appropriate—form of a compensation mechanism available in this situation where the objective is to compensate victims of Russia’s illegal war of aggression. Responsibility for the consequences must be placed at the foot of the aggressive state.

The insistence on state consent in the context of countermeasures does not make sound policy sense. Relying on an aggressor’s consent would effectively grant the aggressor veto power over the use of its funds for reparations. Such an interpretation would place the aggressor’s rights over the rights of the victims. The irony here is that under such a construction, the rights of Russia—the powerful aggressor—take precedence over the rights of those it has injured. Such an interpretation would undermine international law, not respect it.

Indeed, the REPO Act includes a provision calling for an international agreement among cooperating states that “establish[es] a mechanism for compensating Ukraine for damages resulting from that invasion” and “ensuring distribution of those assets or the proceeds of those assets based on determinations under that mechanism” (Section 105).

Accordingly, Ukraine, in collaboration with the Council of Europe and its partners, has begun work on an international compensation mechanism, for damages arising out of Russia’s aggression. According to Ukraine’s deputy minister of justice, the international compensation mechanism would consist of three components: a registry of losses, a compensation commission, and a compensation fund that Ukraine envisions will hold Russian funds. The compensation mechanism would obtain its funds from the compensation fund consisting of Russian state assets that have been confiscated for the purpose of Ukraine’s recovery from Russian aggression. It would derive its authority from international agreements concluded between Ukraine and partner states that have confiscated the Russian assets on Ukraine’s behalf. A hypothetical settlement agreement between Russia and Ukraine, or the approval of Russia and non-involved states, need not necessarily have bearing on the compensation mechanism that participating states can devise (ch. 7.2.1).

Buchheit and Stephan further suggest that a mechanism for dealing with confiscated assets should “leave the forum open to claims from both sides.” They contend that Ukraine may have caused harm to Russia, “even if these acts do not qualify as international crimes.” As an example, they reference the Nord Stream 2 explosion and appear to assert that if it were Ukraine that was responsible, the reparations mechanism must allow for Ukrainian reparations to Russia. The resulting implication is that compensation (for both sides) would be paid from the pool of confiscated Russian assets.

It is necessary to give some thought to the unjustifiable consequences of such a proposal. Purely for argument’s sake, let us assume that Ukraine did damage to Nord Stream 2 (a subsidiary of Gazprom), and let us estimate, for the sake of this hypothetical, that this caused $10 billion worth of damage to Gazprom. The situation then is this: Russia likely owes Ukraine trillions in reparations; there is a limited pool of $300 billion in frozen Russian assets; $10 billion is offset or returned to Russia from the frozen assets because of Nord Stream 2; and then the remainder can be distributed by the claims commission to Ukrainian victims who have suffered indescribable war crimes.

There is a limited amount of money that will be available to finance the claims commission. However, the claims that Buchheit and Stephan propose to satisfy “both ways” are vastly different and unequal in their nature. On the one side, there are claims by Ukrainian civilians who have been tortured, whose homes have been destroyed, and whose loved ones were killed. And on the other side, there are claims by Gazprom for the destruction of Nord Stream 2 (hypothetically). The practical effect of this “both sides” proposal is to imply that, because an oil pipeline was damaged, it is fair to reduce the amount available as compensation to Ukrainians for rape, torture, murder, and the destruction of their livelihoods. Equivocating these two kinds of damages is morally indefensible.

As a final point, while it is true that one of the primary considerations for compensation should include a design for a claims process, a claims process is inherently limited in its capacity. Sifting through millions of individual claims takes considerable time, and the money is not likely to meet the most urgent needs (the health care system, new energy facilities, improved infrastructure) or be disbursed as rapidly as needed. An effective compensation mechanism should also address broader policy-driven needs. Countermeasures allow states wider flexibility and latitude in shaping essential policy-driven programs of reconstruction and recovery outside of an adjudicatory claims mechanism. This mix of designs is a historic challenge. It is a novel situation that requires an appropriately novel and just solution. The REPO Act enables this flexibility via its countermeasures framework, and it calls for the U.S. to work with international allies and partners that have also confiscated Russian sovereign assets to design an appropriate international compensation mechanism for Ukraine.

The Unsubstantiated Issue of Due Process

Buchheit and Stephan express common misgivings that confiscating Russian state assets triggers constitutional obstacles presented by the Fifth Amendment’s Due Process and Takings Clauses. They state that “[o]utright expropriation triggers at least some constitutional safeguards” and “[j]udicial oversight is ... likely required by the Constitution.” However, the confiscation of Russian state funds as envisioned by the REPO Act is consistent with the Constitution and does not run afoul of the Due Process or Takings Clauses.

The Russian government and its state property have no due process rights under U.S. law. On its face, the Russian Federation is not a “person” under the plain language of the Fifth Amendment, and, unlike private persons, Russia’s relations with the United States are generally not governed by the courts, but by diplomatic commitments and treaties negotiated among sovereign states. 

The Supreme Court has adopted a similar view of the Due Process Clause with respect to the sovereignty of U.S. states, holding that states cannot claim due process protections. In the 1966 landmark case of South Carolina v. Katzenbach, the Court rejected the idea that U.S. states themselves have due process rights, explaining that “[t]he word ‘person’ in the context of the Due Process Clause of the Fifth Amendment cannot, by any reasonable mode of interpretation, be expanded to encompass the States of the Union.” The Court also explained in Will v. Mich. Dep’t of State Police that “in common usage, the term ‘person’ does not include the sovereign.”

Although the Supreme Court has not directly considered whether a foreign sovereign is a “person” for purposes of the Due Process Clause, it has implied that it is not. In Republic of Argentina v. Weltover, Inc., the Court cited Katzenbach’s recognition that U.S. states do not have such rights while discussing the question. The Court’s reference to Katzenbach has largely been taken by courts to indicate that—for due process jurisdictional purposes—foreign states can and should be analogized to states of the Union and treated similarly. Indeed, the U.S. Court of Appeals for the Second Circuit in Frontera Res. Azer. Corp. v. State Oil Co. of Azer. Republic explained that, in Weltover, the “implication [of the Supreme Court] was plain: If the ‘States of the Union’ have no rights under the Due Process Clause, why should foreign states?”

Additionally, there is no circuit split on this question. Holdings of the Second and District of Columbia circuits, the two most relevant in this domain, overwhelmingly support the proposition that foreign states are not “persons” for due process clause purposes. As the D.C. Circuit wrote, “[I]t is not to the due process clause but to international law and to the comity among nations, as codified in part by the FSIA [Foreign Sovereign Immunities Act], that a foreign state must look for protection in the American legal system.”

The main support that regularly arises for the opposing view is an article by Vanderbilt Professor Ingrid Wuerth-Brunk. In the article, she concedes that federal case law since 1992 uniformly holds that foreign states are not entitled to due process, but it is her belief that “as a matter of policy,” courts are “wrong” not to extend due process to foreign states. Regardless of the merits of this questionable position, it is exceedingly unlikely that a reviewing court would create a circuit split, or that the Supreme Court would overturn nearly three decades of precedent and unanimous lower court tradition, particularly in the context of Russian atrocities against Ukraine. Unlike what some commentators seem to assert, there is no true “ongoing debate” in the courts.

To be sure, most of the targeted assets at issue are technically held not by the Russian Federation itself, but by the Central Bank of Russia (CBR). But this makes no practical difference. It would be inconsistent for a state-owned entity that is indistinguishable from the state itself to possess constitutional rights that the state itself does not enjoy. Granted, in the context of the FSIA, the Supreme Court in First Nat’l City Bank v. Banco Nacional de Cuba treated foreign instrumentalities differently from foreign sovereigns, but it did so only for purposes of liability. It did not extend this treatment to the due process rights of foreign instrumentalities.

The DC Circuit and Second Circuit have suggested, for the purposes of the FSIA, that a foreign entity will be regarded as a separate entity if it is sufficiently independent from the state, but if it is in form or practice an “agent” or arm of the state, then it will be treated as the sovereign itself for the purposes of due process (notably, both of these cases involved a challenge to the exercise of jurisdiction under the FSIA, which is not at issue here because the confiscation of state assets would be carried out through the executive branch, and not judicial measures—which would ordinarily give rise to jurisdiction and foreign sovereign immunity questions).

The CBR cannot be viewed as independent given how closely integrated it is with the Russian state. As Russia’s central bank, its responsibilities and powers are enumerated in the Russian constitution. It is exclusively responsible for regulating the state’s monetary system “in collaboration with the Government of the Russian Federation,” and its primary function is to develop the financial market of the Russian Federation and ensure its stability. The capital and other property of the CBR is owned by the state. Russian President Vladimir Putin personally appoints the head of the CBR, exercises significant influence over the CBR’s head, and maintains plenary removal power. Out of the 12 members of the committee that directs the CBR’s monetary policy and financial regulation, only one is a member of the CBR itself—the rest are representatives from various state agencies, including from the Ministry of Finance, the presidential administration, and the legislature. It cannot be said with a straight face that the CBR is independent enough of the Russian state for it to receive due process protections.  

The REPO Act Is a Legally Sound and Timely Way Forward

Although notable legal experts make a solid case that the president has sufficient authority to transfer Russian state assets for the ultimate benefit of Ukraine, the REPO Act would remove any possible remaining ambiguity on this question. The bill judiciously states that “[a]ll right, title, and interest in Russian sovereign assets confiscated shall vest, if necessary, in the Government of the United States while being held in the Ukraine Support Fund” (Section 104(b)(4), emphasis added). The REPO Act dually ensures the president has the necessary authority to facilitate the transfer of funds to Ukraine by lawfully creating confiscation powers and prompts the administration to take action. 

At some point, the war will end and the sanctions against Russia might be lifted, but it is unrealistic to assume that Ukraine will be compensated for its losses if the West does not confiscate Russian sovereign assets by then. Even if Russian money remains blocked after the war, this will not benefit Ukraine. Rebuilding the country will entail not just the reconstruction of critical infrastructure, such as the Kakhovka Dam and countless other material losses, but must include more immediate institutional tasks like strengthening the health care system, restoring economic security, and providing support for victims. These tasks cannot wait for the end of the war.

Confiscation of Russian state assets is the most immediately viable way of holding Russia accountable for its destruction of Ukraine. Despite a growing push and increased clarity regarding the perceived legal constraints for the U.S. and its allies to use the approximately $350 billion of frozen Russian assets for the benefit of Ukraine, the Biden administration has consistently stalled on taking meaningful action. However, the necessary funds to finance Ukraine’s reconstruction are required without delay. The REPO Act would unambiguously provide the U.S. government with the tools aimed at swift confiscation of Russian state assets as envisioned months ago by the UN General Assembly Resolution on Nov. 14, 2022.