May 23, 2024 - World

Putin signs decree to allow retaliatory seizure of U.S. assets in Russia

Russian President Vladimir Putin speaking in Moscow on May 23.

Russian President Vladimir Putin speaking in Moscow on May 23. Photo: Contributor/Getty Images

Russian President Vladimir Putin signed a decree on Thursday that would allow Russia to claim U.S. assets in retaliation for any Russian assets confiscated in the U.S.

Why it matters: Group of Seven nations for weeks have been negotiating if or how around $300 billion worth of sovereign Russian assets frozen in the West could be leveraged to aid Ukraine in its defense against Russia's unprovoked invasion.

  • Since the start of the invasion, governments have hesitated to touch the assets over legal and financial concerns.

State of play: The decree came as G7 finance ministers were beginning a meeting in Italy, during which they will attempt to find a way forward on a plan for the frozen assets.

  • The European Union also formally adopted a plan earlier this week to send Ukraine between $2.7-3.3 billion (2.5-3 billion euros) each year from interest generated by some of the frozen assets.

What's inside: Under the decree, any property, real estate, securities and stakes in Russian companies belonging to American companies and citizens could be confiscated to compensate for Russian losses from seizures in the U.S., according to Russia's state-backed media.

Zoom out: Russian state media claimed earlier this year that the Kremlin has identified around $290 billion in U.S. and allied assets in Russia that could be targeted, though Reuters couldn't independently verify those claims.

The big picture: The U.S. has proposed using revenue from some of the Russian assets to back $50 billion in aid to Ukraine.

  • German officials signaled earlier this week they were ready to support the U.S.' proposal, Bloomberg reports.
  • Congress passed, and President Biden signed, legislation last week that empowers Biden to seize Russian foreign exchange reserves in the U.S. under provisions of the Rebuilding Economic Prosperity and Opportunity for Ukrainians Act.
  • A task force has identified at least $5 billion in Russian central bank assets in the U.S. banking system.

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