From three billionaires, one Asia-based, one European Continent-based, and one North America-based who each have at least US$2 billion in cash: 

“Why would I buy something that I could not use because the owner will chase the boat or plane around the world?  Be tough to get a good night’s sleep in the bedroom of one of these guys.  The item will always be tarnished and so will the buyer.” 

“What does the US Government expect I’d pay for a US$500 million yacht?  US$250 million? Will I get a pink slip [clear title/registration]?  Will the US Government indemnify me for all future litigation expenses?” 

“Any asset I buy would have a Scarlet Letter on it- belonged to a Russian oligarch, a criminal.  Everywhere it goes or anywhere it is located would become a target for conflict, sabotage, and reminding everyone that I own an asset illegally obtained in the first place.  I don’t know how anyone moves past the behavior of these people, the oligarchs, and their support for President Putin.  Might be better to let the Ukrainians blow it all up.” 

President Joseph Biden (28 April 2022): “So far, member states in the European Union have reported freezing over $30 billion in assets, including almost $7 billion in boats, helicopters, real estate, and artwork. Dozens of yachts have been seized by REPO Task Force member countries. The U.S. Treasury has sanctioned and blocked vessels and aircraft worth over $1 billion, as well as frozen hundreds of millions of dollars of assets belonging to Russian elites in U.S. bank accounts. Last week, in the wake of criminal charges, Treasury designated a global sanctions evasion network associated with Konstantin Malofeyev, crack downing on the movement of illicit assets. Earlier this month, the Department of Justice announced that Spain seized a 255-foot, $90 million yacht of sanctioned Russian Oligarch Viktor Vekselberg at the request of United States.”

Members of the United States Congress have identified themes from which to inspire ideas for the United States government, and for other country governments, to seek reparations from the government of the Russian Federation (primarily through the use of approximately US$340 billion in frozen assets of the Central Bank of the Russian Federation) and from the estimated US$200 billion in assets of selected Russian Federation nationals defined as “oligarchs” for what could total US$500 billion in infrastructure damages inflicted since 24 February 2022 by the armed forces of the Russian Federation upon Ukraine. 

Adding to this half a trillion dollars will be damages on behalf of individuals and companies and organizations from court judgements in civil lawsuits and in criminal convictions.   

And the lawsuits from governments of countries who have been impacted by displacements of nearing 8 million Ukraine nationals- Hungary, Moldova, Poland, Romania, and Slovakia.   

And the lawsuits from governments of countries who have contributed currency, humanitarian assistance, and weapons to Ukraine.  For United States taxpayers, from 24 February 2022 through the end of the year, the total value may reach US$100 billion- every penny of which will be borrowed with accruing annual interest.  The United States Department of the Treasury will market Treasury Bills to the private sector and to governments.  The US$100 billion will be added to the annual United States government spending deficit which in turn will be added to the United States government (taxpayer obligated) debt- currently US$30.4 trillion.    

Obtaining and then liquidating assets has always been a complex statutory, regulatory, and policy process in most countries.  Decisions focus upon jurisdiction and standing- which country court(s) can hear the case and who can appear as a plaintiff and as a defendant.   

Selling off what could be US$200 billion in assets will be the mother of all legal disputes- multiple countries, multiple jurisdictions, multiple plaintiffs, multiple defendants, millions of pages of court filings, thousands of court motions, and appeal after appeal, and thousands of attorneys billing at US$1,500.00 per hour while operating globally 24-hours per day in each of the thirty-seven time zones.     

Here is where the well-intentioned, and politically beneficial to individual legislators, legislative process may collide with a marketplace wall. 

Thus far, the United States government and other governments have seized, are in the process of seizing, or would like to seize some expensive yachts, expensive residences, expensive vehicles, expensive artworks, valuable companies, and robust bank, brokerage, and investment accounts. 

On 25 March 2022, the Federal Bureau of Investigation (FBI) which operates under the purview of the United States Department of Justice filed with the United States District Court in Washington DC a thirty-three (33) page Application For A Warrant To Seize Property Subject To Forfeiture.  On 4 April 2022, the FBI used the warrant to seize the 254-foot Tango docked in Palma de Mallorca, Spain.  The vessel is registered in the Cooke Islands and valued at approximately US$120 million.  According to the warrant, the owner of the vessel is Mr. Viktor Vekselberg, a Russian national whose assets in the United States have been frozen. On 2 May 2022, the government of Fiji approved a request by the United States government to seize a 347-foot Amadea, a vessel valued at approximately US$325 million and reportedly owned by Mr. Sulieman Kerimov, a Russian national, whose assets have been sanctioned by the United States, United Kingdom, and European Union (EU).  

Since 24 February 2022, governments in France, Germany, Italy, Spain, United Kingdom among others have also seized vessels and other assets from Russian nationals.   

The most well-known asset seizures include the Crescent 443-foot vessel valued at more than US$500 million and owned by Mr. Igor Sechin, a Russian national; the Dilbar 512-foot vessel valued at more than US$500 million and owned by Mr. Alisher Usmanov, a Russian national; and the Sailing Yacht A 470-foot vessel owned by Mr. Andrey Melnichenko, a Russian national.  Note the annual operating costs for vessels of these lengths can be US$30 million. 

Because a law exists and because a judge issues a directive does not negate necessarily an opportunity for the law or the directive to be challenged- by the plaintiff or the defendant. 

Anyone considering the purchase of seized, confiscated assets will tread carefully, if at all.  There will be hundreds of attorneys representing the interests of the original owners and representing the interests of the prospective purchasers. 

What will governments seek in terms of value from the assets seized and confiscated?  100% of market value?  50% of market value?  25% of market value?  Will auctions be conducted by entities affiliated with each government or will a private sector entity be commissioned (and receive a commission or will they forgo their commission)? 

Rightly so, a purchaser will want to have clear title, clear deed, clear registration, clear ownership.  The original owner of a vessel valued at US$500 million, or a residence valued at US$100 million is unlikely to walk voluntarily away empty-handed. 

From Investopedia: “A certificate of title is an official state or municipal-issued document that identifies the owner(s) of personal or real property.  A certificate of title provides documentary evidence of the right of ownership.  Usually it applies to real estate, though it also may pertain to a business, boat, or vehicle, among other things.  When issued for real property - such as land or a house - by a title insurance company, the certificate of title is a statement of opinion on the status of the title, based on a thorough examination, or title search, of specified public records.  The title thus embodies the right or evidence of the right of ownership of real property.”  

Absent clear title- in these instances meaning that the original owner will not object to the title transfer, why would anyone purchase a seized, confiscated asset?  For example, the original owner could track and then seek to impound a vessel or aircraft or vehicle in the same manner that was used against the original owner.  A lien could be placed upon a property- encumbering any later transaction.  The outcome of a legal proceeding may be against the original owner, but the process could last for months or years and cost hundreds of thousands or millions of dollars in legal fees. 

One likely outcome would be for a purchaser to in advance reach an agreement to make a payment to the original owner so that clear title will be obtained.  Then, however, the issue will be if the government which seized and then confiscated the asset will permit such a payment?  In essence, permit the payment of a type of transactional ransom or probably better described as court-approved extortion. 

Which leads to who are the potential purchasers of these assets?  Likely, given the values, particularly for a vessel with a value of US$500 million, the number of qualified purchasers is limited to one hundred to two hundred people- in the world. 

The process will not be a Publishers Clearing House mass mailing to every zip code in the United States and every postal code in other countries.  No one will purchase a US$500 million vessel online using their Centurion Black American Express card.  They might, however, want to make payment in cryptocurrency. 

United States House of Representatives
Washington DC
27 April 2022

Today, the House of Representatives passed the Asset Seizure for Ukraine Reconstruction Act, a bipartisan bill to encourage use of sanctioned Russian assets to help rebuild Ukraine. The bill was introduced by Representatives Tom Malinowski (D-NJ) and Joe Wilson (R-SC).  The legislation encourages the administration to confiscate any property – including luxury villas, yachts, and airplanes – valued over $2 million from Russian oligarchs and companies previously sanctioned by the U.S. government for their involvement in the Kremlin’s invasion and human rights violations in Ukraine. Any funds gained from asset sales would then be used to benefit the Ukrainian people, through the provision of military and humanitarian assistance, post-conflict reconstruction, and technology to ensure the free flow of information in Ukraine. 

The Asset Seizure for Ukraine Reconstruction Act has been introduced in the Senate by Senators Sheldon Whitehouse (D-RI), Lindsay Graham (R-SC), Richard Blumenthal (D-CT), and Roger Wicker (R-MS). Full text of the House bill can be found here.  

“It is hard to imagine giving Russia’s wealth back to Putin while Ukraine lies in ruin and Ukrainians are burying their dead,” said Representative Malinowski. “Under these extraordinary circumstances, the international community should be prepared to use Russia’s frozen assets to rebuild the country Russia is destroying.” 

“I am grateful that today, the House passed the Asset Seizure for Ukraine Reconstruction Act. It is long past time that Putin’s cronies, who have amassed wealth on the backs of the Russian people, pay for their complicit role in Putin’s crimes against humanity. There is no better use for the liquidated, ill-gotten wealth than rebuilding and humanitarian efforts in democratic Ukraine. I can only hope that its passage today represents some semblance of justice for the people of Ukraine,” said Representative Wilson.  

“I’m pleased the House has cleared a version of our Asset Seizure for Ukraine Reconstruction Act. This is an important step toward our goal: the seizing of oligarchs’ mega yachts, jets, mansions, and other high-priced assets and using the proceeds from their sale to rebuild Ukraine,” said Senator Whitehouse. “I look forward to moving this bipartisan bill in the Senate.”   

“Dictators like Putin care only about themselves and their cronies,” said Senator Graham. “It is long past time for all the Russian oligarchs – Putin’s partners in crime – to lose their yachts, luxury apartments, and their assets and pay a price for being part of a thuggish group – a nation-state that really is a mafia-state. I want to see the Department of Justice, Treasury, and law enforcement partners go in and take apartments, fine art, and seize yachts from a bunch of thugs and crooks. I want to put money on the table to have more weapons for Ukraine to fight. This is a good beginning on the long journey to push back against Putin and his misadventures.” 

Original cosponsors of the bill include Representatives Abigail Spanberger (D-VA), Peter Meijer (R-MI), Steve Cohen (D-TN), Jim Banks (R-IN), Susan Wild (D-PA), Young Kim (R-CA), Dan Kildee (D-MI), and John Curtis (R-UT). Representatives Malinowski, Wilson, Spanberger, Meijer, Cohen, and Curtis are all members of the Congressional Caucus against Foreign Corruption and Kleptocracy, a bipartisan grouping of members of Congress that has led the successful passage of several pieces of anti-corruption legislation through the House of Representatives, including the Justice for Victims of Kleptocracy Act, the Combating Global Corruption Act 

LINKS TO:

Application For A Warrant To Seize Property Subject To Forfeiture (2/25/22)
Asset Seizure for Ukraine Reconstruction Act (S. 3838)
Asset Seizure for Ukraine Reconstruction Act (H.R. 6930)

The White House
Washington DC
28 April 2022

FACT SHEET: President Biden’s Comprehensive Proposal to Hold Russian Oligarchs Accountable

Today, in concert with his supplemental request to Congress to support Ukraine, President Biden will send a proposal for a comprehensive legislative package that will enhance the United States Government’s authority to hold the Russian government and Russian oligarchs accountable for President Putin’s war against Ukraine. The proposals were crafted in close consultation with interagency partners, including the Department of the Treasury, the Department of Justice, the Department of State, and the Department of Commerce. The Biden Administration looks forward to working closely with Members of Congress as a whole to implement this package of proposals. This package of proposals will establish new authorities for the forfeiture of property linked to Russian kleptocracy, allow the government to use the proceeds to support Ukraine, and further strengthen related law enforcement tools. Establishing a Streamlined Administrative Authority to Seize and Forfeit Oligarch Assets: This proposal aims to streamline the process for seizure of oligarch assets, expand the assets subject to seizure, and enable the proceeds to flow to Ukraine. It would:

Create a new, streamlined administrative process involving the Departments of the Treasury and Justice, for the forfeiture of property in the United States that is owned by sanctioned Russian oligarchs and that has a connection to specified unlawful conduct.

Create a new criminal offense, making it unlawful for any person to knowingly or intentionally possess proceeds directly obtained from corrupt dealings with the Russian government.

Enabling the Transfer of the Proceeds of Forfeited Kleptocrat Property to Ukraine to Remediate Harms of Russian Aggression. This proposal would improve the United States’ ability to use forfeited oligarch funds to remediate harms caused to Ukraine by Russian aggression. Under the proposal, the Departments of Justice, Treasury, and State will work together to use forfeited funds related to corruption, sanctions and export control violations, and other specified offenses to remediate harms of Russian aggression toward Ukraine.

Clamping Down on Facilitation of Sanctions Evasion: This proposal would allow for the forfeiture of property that Russian oligarchs use to facilitate the evasion of sanctions. Under current law, the United States can forfeit the proceeds of sanctions violations, but it cannot forfeit property used to facilitate sanctions violations. This proposal closes that gap.

Modernizing Racketeering to Include Sanctions Evasion: This proposal would strengthen the United States’ ability to investigate and prosecute sanctions evasion by adding the crime of sanctions evasion to the definition of “racketeering activity” in the Racketeer Influenced and Corrupt Organizations (RICO) Act. This proposal would give the Department of Justice a powerful forfeiture tool used against racketeering enterprises to dismantle organizations that enable violations of U.S. sanctions.

Expanding the Time Limit to Follow the Money: This proposal would improve the United States’ ability to pursue money laundering prosecutions (and post-conviction forfeitures) based on foreign offenses by extending the statute of limitations from five years to ten years. Criminal investigations of oligarchs can be complicated because sophisticated criminals use intricate schemes that may cut across multiple jurisdictions. The United States often works with international partners on these cases. Extending the statute of limitations would provide additional time for investigators and prosecutors to hold oligarchs criminally accountable.

Leveraging Foreign Partners’ Ability to Freeze and Seize Oligarch Wealth: This proposal would improve the United States’ ability to work with international partners to recover assets linked to foreign corruption. This proposal would make several amendments to improve our ability to enforce foreign restraint and forfeiture orders in the United States. The United States has already been working with allies and partners to track down assets all over the world: In March, the U.S., led by the Department of the Treasury and Department of Justice, launched the Russian Elites, Proxies, and Oligarchs Task Force with international partners to coordinate the freezing and seizing of Russian assets around the world. So far, member states in the European Union have reported freezing over $30 billion in assets, including almost $7 billion in boats, helicopters, real estate, and artwork. Dozens of yachts have been seized by REPO Task Force member countries. The U.S. Treasury has sanctioned and blocked vessels and aircraft worth over $1 billion, as well as frozen hundreds of millions of dollars of assets belonging to Russian elites in U.S. bank accounts. Last week, in the wake of criminal charges, Treasury designated a global sanctions evasion network associated with Konstantin Malofeyev, crack downing on the movement of illicit assets. Earlier this month, the Department of Justice announced that Spain seized a 255-foot, $90 million yacht of sanctioned Russian Oligarch Viktor Vekselberg at the request of United States.