On Tuesday, the U.S. Department of the Treasury mandated that the country’s banking sector begin reporting its holdings of Russian assets. This directive aims to eventually seize these billions of dollars in assets and sell them to support the devastated Ukrainian economy.
This requirement stems from a new law passed by Congress earlier this year, known as the REPO Act. This law grants the U.S. government the authority to confiscate Russian state assets held by American banks with the intention of liquidating them and delivering the proceeds to Ukraine. While most Russian assets are located in Europe, it is estimated that the U.S. banking system holds up to $6 billion in Russian assets.
Banks are required to report any Russian assets on their books to the Office of Foreign Assets Control (OFAC) by August 2. If a bank identifies new Russian assets after the deadline, they must be reported within 10 days, according to Treasury officials.
The war in Ukraine, which began in February 2022, has resulted in tens of thousands of deaths and has severely crippled the country’s economy and infrastructure. In February, the World Bank estimated that Ukraine would require $486 billion for recovery and reconstruction—a figure that continues to rise as the conflict persists.
Countries including the United States, Canada, France, Germany, Italy, the United Kingdom, and Japan—collectively known as the G7—froze about $300 billion in Russian assets at the onset of the war. These assets encompass foreign currencies, gold, and investments in public and private companies.
For more in-depth analysis on the implications of these financial moves, you can refer to resources available through the World Bank and the U.S. Department of the Treasury.
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