The costs of the war in Ukraine are mounting. The much-vaunted Ukrainian counteroffensive failed to make notable progress. And Russia, whose economy is still much larger than Ukraine’s, is ramping up its warfighting capacity.
There are substantive arguments for and against such an approach. We offer two opposing viewpoints below. — Christian Caryl
Putin is inflicting billions in damage. Russia should foot the bill.
Michael McFaul: Congressional Republicans are increasingly skeptical of continuing U.S. aid to Ukraine. But a partial solution to the problem is at hand: It is time for the West to consider using confiscated Russian assets to help foot the bill for assistance to Kyiv, sparing taxpayers and governments from paying the full cost of the war.
Cutting aid to Ukraine would undermine core U.S. national security interests. Ukrainian fighters are weakening the Russian military threat. If we quit Ukraine now, Russian leader Vladimir Putin will be emboldened to threaten other countries once part of the Russian Empire, beyond Ukraine’s borders — countries that are now NATO allies. A Putin victory in Ukraine will also embolden Chinese leader Xi Jinping to believe in the utility of military force in what he will see is an era of a declining, isolationist America.
Since the war began, a broad coalition of countries has joined together to confiscate billions in Russian assets. Some of these assets belong to oligarchs who have propped up Putin’s system; by far the largest amount, though, is sitting in frozen accounts held by the Russian Central Bank. These funds amount to some $300 billion, of which the largest share has been seized by the Europeans. These funds should be deployed as soon as possible to help bring the war to an end and finance Ukraine’s reconstruction. Considering that Russia’s unprovoked war has inflicted hundreds of billions of dollars of damage on the Ukrainian economy, it’s only just that the international community should impose some of these costs on the Russian state itself.
Careful legal analyses have demonstrated that these asset transfers are legal. But some experts worry that transfer of these funds will set a negative precedent for global financial institutions. I disagree. Seizing assets of the Russian state after Putin invaded and annexed Ukraine sets a positive, deterrent precedent to other world leaders thinking about using military force to annex territory. And we should not want criminals to do their banking in the democratic world.
In one vote on one bill, Congress could approve new U.S. funds for Ukraine and compel the Biden administration to provide new Russian funds, currently frozen in U.S. banks, to Ukraine. While the sum (estimates range from $8 billion to $39 billion) confiscated by the United States is just a fraction of the total currently frozen by the West, U.S. leadership will make it easier for Europeans to follow suit.
Combining both approaches in a single bill would make it hard for members of Congress to vote against the legislation. Who wants to explain to American voters why they voted against transferring Russian government money to Ukraine?
There is no such thing as Republican security interests or Democratic security interests. We have national security interests. And helping Ukraine repel Russia’s invasion is a U.S. national security interest.
Michael McFaul is director of the Freeman Spogli Institute for International Studies and a Hoover fellow at Stanford University and a contributing columnist to The Post. He is the author of “From Cold War to Hot Peace: An American Ambassador in Putin’s Russia.”
Seizing sovereign assets violates international law
Oona A. Hathaway, Maggie Mills and Thomas Poston: Policymakers in Washington are increasingly floating a seemingly irresistible idea: They want to seize tens of billions of dollars in frozen Russian central-bank reserves and give them to Ukraine.
Yet the plan has a major flaw: It responds to one clearly illegal act — the Russian invasion of Ukraine — with another: the seizure of sovereign assets in violation of an international principle known as sovereign immunity. This principle guarantees that foreign states and their assets will be immune from acts of enforcement or execution by other states. These protections extend to foreign central-bank assets, including Russia’s.
Even as Ukraine struggles against its well-resourced opponent, taxpayers in the countries supporting Ukraine are showing growing signs of fatigue. So it comes as little surprise that the United States is not the only country to find the idea of seizing Russian assets compelling. Canada has already passed similar legislation, and the European Union considered the idea but has since abandoned it.
One might think it’s absurd to advocate upholding international law in the middle of a war in which Russia has been flagrantly violating those same legal principles. But that would be a mistake. Ukraine has succeeded against all odds in no small part because it has insisted on observing international law. If Ukraine and its allies break the law now by seizing and transferring Russian assets, they put this vital element at risk.
Seizing and transferring Russia’s assets would open the door to a wave of similar expropriations by Russia and other countries, ultimately destabilizing the protective framework on which global finance and trade depend — a framework that the United States has spent decades trying to build and reinforce.
Seizing Russian central bank assets is also likely to accelerate the process of global “de-dollarization.” If the United States decides to play fast and loose with the principle of sovereign immunity, investor states looking for a safe place to park their own central-bank reserves might think twice before choosing U.S. financial institutions. A weakening of the dollar as the global reserve currency of choice would harm Washington’s ability to exploit its financial muscle in the international arena.
Ukraine’s friends can still put Russian assets to use. The United States and its allies can and should continue holding frozen Russian money until Moscow makes good on its obligations to end the illegal war and pay reparations. Unlike taking the money and using it, this approach gives Ukraine a massive bargaining chip it can deploy in future peace negotiations. In the meantime, states can tax the profits generated by the frozen assets to support Ukraine (as Belgium plans to do and the E.U. might as well).
Denying Russia access to its central-bank reserves is a critical strategic tool. But Kyiv, Washington and their friends should strive to do so while maintaining the commitment to international law that has played such an essential role in the war.
Oona A. Hathaway is a professor of law and Maggie Mills and Thomas Poston are J.D. candidates at Yale Law School. They are the authors of “War Reparations: The Case for Countermeasures.”
