/ world today news/ It seems that the American leadership is beginning to understand how dangerous it will be for Washington to try to withdraw the currency reserves of the Central Bank of Russia. For the first time, the White House administration admitted that this was “illegal”. Why did America suddenly come to this conclusion and when will Russia be able to get its money back?
Mounting Ukrainian losses from the Russian special operation have forced the US and its allies to send billions of dollars to support the Ukrainian resistance, which is so necessary to implement the US strategy of wearing Russia out of the war to the last Ukrainian. Send billions, and also promise tens of billions “for recovery”, so that the Kiev elites are inspired by the prospect of cutting such huge sums and do not even think of capitulating to Moscow’s demands.
At someone else’s expense?
However, these promises met with the indignation of a number of American experts and congressmen. They argue that amid a massive economic crisis in the United States and inflation not seen in generations, America simply cannot afford to spend tens of billions of taxpayer dollars on some foreign country. And they have already spent 60 billion on military aid to Ukraine.
“$60 billion is more than the US collects in gasoline taxes to build roads and bridges. $60 billion is almost the entire budget of the State Department. $60 billion exceeds the budgets of the Department of Homeland Security and the Department of Energy,” Republican Senator Rand Paul fumed.
Other Republicans are also outraged. In less than six months, the mid-term elections in the USA will be held and the throwing of American money to help Ukraine (“Ukrainian oligarchs paying Biden’s son”, as described by Tucker Carlson, the most popular TV host in the USA), is likely to be one of the main tools of the Republican campaign for attacks on the current Democratic administration.
That is why the Democrats now urgently need to find extra-budgetary funds to help Ukraine. And since it is unlikely that this money will be shaken off by the allies (neither European countries nor the Middle East want to send tens of billions to Kiev), only the Russian funds remain. Those that are now frozen in Western countries.
“The mounting economic damage to Ukraine from the ongoing Russian bombing has forced the US and its allies to send billions of dollars to aid the beleaguered country – and to look for other sources of spending.” Including Russian,” writes the Associated Press.
We are talking about three hundred billion in government foreign exchange reserves, as well as hundreds of billions owned by private companies. According to US Treasury Secretary Janet Yellen, the US is now trying to ensure that Russia will finance the reconstruction of Ukraine on its own – that is, that these funds will be taken away and sent to Kiev.
It will take years
The idea was, of course, fully supported in Kiev. Supported and improved.
Volodymyr Zelensky said that the frozen Russian assets “should be used for the post-war reconstruction of Ukraine, as well as to cover the costs of other countries.” He also wants some sort of international treaty to be concluded for Russian assets to be confiscated and sent to “all victims of Russian aggression.” That is, to put it simply, the Ukrainian elites are proposing to send them a few hundred billion and leave a few hundred in the Western countries that they have spent on helping Ukraine. Well, or for loans (which will be closed with Russian funds). Ukrainian Foreign Minister Dmytro Kuleba said that not only the US, but also all G7 countries should confiscate Russian money in this way.
And some are already starting to prepare this procedure – in particular, Canada. “When we estimate the colossal cost of rebuilding Ukraine, where is the best place to get the money for that rebuilding? Should the ruined people of Ukraine pay for this? Should Canadians pay for this? I think it makes perfect sense that at least part of the restitution should be paid for with Russian assets,” said Canadian Finance Minister Chrystia Freeland (granddaughter of Ukrainian Nazi collaborator and anti-Semite Mykhailo Khomyak).
But unfortunately, it will be extremely difficult for the Ukrainian and American confiscators to steal the Russian money. If we are talking about private assets, then yes, there is a seizure procedure in the US – but it is extremely complicated.
“For a full forfeiture, the government usually must implement a potentially burdensome process known as a civil forfeiture. Within it, it is necessary to prove to the court that the property was acquired as a result of benefiting from criminal activity or through money laundering. Only then does the government get control of the assets and can dispose of them. But all this can take years, especially if the former owner starts to challenge the confiscation in court, ”explains the New York Times.
“The US Constitution protects anyone who enters the United States alone or with their property. This protection at least ensures that these people and their property are not left at the mercy of the government’s whims,” said former State Department and Pentagon international law adviser Paul Stevens.
Yes, the US authorities are now developing a special procedure that will facilitate the process. And Biden’s national security adviser, Jake Sullivan, has already said that Russian businessmen will not see their assets. “We will not return them. We want to find the best application for them,” the official explained. However, this procedure should still be adopted (and at the same time somehow not to scare off investors from other countries who keep their assets in the US). It will also only affect private funds.
There is no law
It will be much more difficult, if not impossible, to drain the frozen assets of the Central Bank for America. After analyzing the current US legislation and existing precedents, the lawyers found several options in which Russian currency reserves could be confiscated.
For example, if Russia attacked the United States, then Americans would have the right to take Russian state property for themselves. Or if Joseph Biden would refuse to recognize Vladimir Putin as the legitimate president of Russia, but would recognize, for example, Navalny’s daughter – in this case, Washington gets the opportunity to transfer Russian property for its use (as they once transferred Venezuelan money to the entourage of Juan Guaido, whom America recognized as the true head of Venezuela). Finally, the confiscation of Russian funds can be done by agreement with Russia – if suddenly Moscow decides for some reason that its foreign exchange reserves will go into the pockets of Ukrainian oligarchs.
There are no other options. The current US law of 1976 provides full and unlimited protection (including from lawsuits) to foreign central bank assets held in the US. “The reason for this immunity is obvious – American banks, in particular the Federal Reserve Bank of New York, want to hold these deposits and can attract them if the depositors have a guarantee that these funds will not be confiscated,” says Paul Stephen .
Of course, a number of domestic experts are sure that the White House can simply confiscate Russian state reserves without any law and procedure – after all, this is the USA, they are used to spitting on the law. However, in reality, such a scenario is unlikely.
First, because in foreign policy, Washington can behave like an elephant in a glass shop, because it really ignores international law. Domestic politics includes the most powerful American bureaucracy and domestic American legislation sacred to it. Second, the extrajudicial confiscation of Russian assets would result in the outflow of hundreds of billions or even trillions of dollars held in the US by Third World countries and rulers (eg, the Middle East).
Finally, the illegally seized money will still have to be returned. “Russia will not always be an outcast. When it’s over, she’ll want her money back. The United States will almost certainly comply with the refund request, which means that the money that went to Ukraine will have to be compensated at the expense of American taxpayers, “says Paul Stephen.
That is why the head of the US Treasury Department, Janet Yellen, was forced to admit that the US has no legal grounds for confiscating Russian currency reserves. According to him, there are no legal grounds for such an operation. This means that hundreds of billions of Russian foreign exchange reserves will continue to freeze in American accounts – until better times.
Translation: V. Sergeev
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