US turns to new methods of punishing Russian oligarchs for war


WASHINGTON – The United States has launched another aggressive push to curb the Kremlin’s invasion of Ukraine, straining the Russian economy and particularly its oligarchs.

From the Treasury Department to the Justice Department, U.S. officials are working to legally liquidate the assets of Russian oligarchs, expand financial sanctions against those who aid sanctions evasion, and close loopholes that allow oligarchs to use front companies. through the American financial system.

Andrew Adams, who heads KleptoCapture, a task force dedicated to imposing US economic sanctions on Russia and its billionaires, told The Associated Press that the group is working to identify those who help Russians evade sanctions and violate export controls.

“These illegal delivery networks are taking up an ever-increasing share of our bandwidth,” said Adams, who is also acting deputy attorney general.

So far, more than $58 billion in Russian sanctioned assets have been frozen or blocked worldwide, according to a Treasury Department report released last week. This includes two luxury yachts worth $300 million each in San Diego and Fiji, and six properties worth $75 million in New York and Florida owned by sanctioned oligarch Viktor Vekselberg.

The US tried to punish oligarchs’ partners and wealth managers – in the case of Vekselberg, the New York federal court indicted Vladimir Voronchenko for helping to preserve Vekselberg’s assets. He was indicted in February on charges of violating US sanctions and conspiring to evade them.

The work was coordinated by the KleptoCapture team.

“I think being a facilitator of sanctions can be very effective,” Adams said, calling them “professional brokers for sanctions evasion.”

A February study by researchers at Dartmouth University found that targeting a few key wealth managers would do far more harm to Russia than punishing oligarchs individually.

Other efforts to strain the Russian economy stem from attempts by Russian oligarchs and the Kremlin to liquidate yachts and other assets that benefit Ukraine.

Ukrainian President Volodymyr Zelensky has long called for the transfer of Russian assets to Ukraine, and former Biden administration official Dalep Singh told the Senate Banking Committee on February 28 that the seizure of billions in Russian assets in the United States is “something we have to pursue.” “. »

Singh proposed that the United States “use the reserves that we have tied up at the New York Fed and give them to Ukraine and allow them to be pledged to raise funds.” He led the White House’s sanctions program against Russia while serving as national security adviser for international economics.

According to Adams, the KleptoCapture task force continues its efforts to sell the Russians’ yachts and other assets, despite legal challenges to turning assets whose owners have been blocked into seized assets that the government can seize and sell for the benefit of Ukraine.

He stressed that the US will work with the rule of law. “Part of it is that we’re not taking full, unforfeited assets through the court process and we’re starting to seize them without legal justification,” Adams said.

He added that “the task force was able to work with Congress and work with people in the executive branch to get approval to transfer some of the seized funds to the State Department.”

The Treasury Department said Thursday that the government is “clearing the way” for $5.4 million in seized foreign aid to Ukraine.

In addition, strengthening laws that serve as loopholes for those who evade sanctions will also be a priority for all federal agencies, officials said.

The Financial Crimes Enforcement System, under the auspices of the Treasury Department, should introduce regulations against the use of the US real estate market for money laundering, including a requirement to disclose the true owner of real estate.

Steven Tian, ​​director of research at Yale’s Institute for Chief Executive Leadership, which tracks corporate disengagement from Russia, said the new real estate rule is long overdue.

“I would like to emphasize that this is not unique to Russian oligarchs. “As you know, the real estate market uses shell companies in the United States,” Tien said.

Erika Hanichak, director of government affairs for the FACT Coalition, a nonprofit that promotes corporate transparency, called on the administration to propose the rule by the end of March, when the United States co-hosts the second Democracy Summit with the governments of Costa Rica. Netherlands, South Korea and Zambia.

“We see this as an opportunity for the United States to show leadership not only in fighting corrupt practices abroad, but also by looking in our own backyard and fixing the flaws in our system. it will facilitate corruption at the international level,” he said.

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