US Reaches For New Ways To Punish Russian Oligarchs in Wake of War

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The government in the United States has taken serious action to hurt Russia’s economy, particularly its rich individuals called oligarchs. They are doing this to stop Russia from attacking Ukraine.

The U.S. government is trying to make sure wealthy Russians (called oligarchs) can’t get away with using money that shouldn’t be theirs. They are looking at ways of taking the property these oligarchs have, fining anyone who doesn’t follow the laws surrounding it and closing off any backdoors they use to move around money in American financial systems.

Andrew Adams runs a task force called KleptoCapture. They make sure that the laws and rules in the U.S. dealing with money being sent to Russia and wealthy Russians following those rules is being obeyed. He also told The Associated Press that they want to understand who might be helping Russians break these laws.

Adams, who is also an acting deputy assistant attorney general said “Since more people are trying to cheat these restrictions, it takes up a lot of our busy work.”

The US Treasury Department reported last week that since now, around $58 billion of Russian people’s money has been locked away or frozen in different places all over the world. This money can be used to buy two very expensive yachts with a worth of $300 million each, located in San Diego and Fiji, plus six different houses for a worth of $75 million in New York and Florida which belong to sanctioned individual Viktor Vekselberg.

The U.S. is trying to punish those people who help rich and powerful people like Vekselberg break the law, such as Vladimir Voronchenko. Voronchenko has been charged with helping Vekselberg ignore U.S. rules and laws.

This is part of a special team called the KleptoCapture group that goes after these illegal activities. According to Adams, it’s quite effective when they go after people who assist lawbreakers by hiding their activities from the authorities.

Research from Dartmouth University in February found that punishing only a few key wealthy people in Russia would cause more damage than just targeting individual oligarchs.

There are also attempts being made to take away the boats and property owned by the rich Russians or the government to gain money for Ukraine.

President Volodymyr Zelenskyy of Ukraine wants the United States to give the money Russia has stored in American banks to Ukraine. Former Biden administration official Daleep Singh said we should do this at a meeting on February 28.

Singh said that the U.S. should take money from their savings at the New York Fed and give it to Ukraine, so that Ukraine can use this money as a guarantee to borrow even more money. Singh was responsible for dealing with Russia when he worked as an adviser in the White House on international economic issues.

Adams said the KleptoCapture team is trying to sell luxury boats and other stuff owned by Russians, even though it’s hard to make it so the government can use that money for Ukraine.

The U.S. follows the rule of law, which means we can’t take assets without a legal reason. The task force wants to get permission from Congress and other people in the executive branch to transfer money that was taken during court procedures to the State Department.

The Treasury Department said that the government will give $5.4 million of its money to Ukraine. It’ll also be working hard to make sure that no one can break the laws and get away with it (so-called ‘sanctions evaders’).

The U.S. Treasury Department is planning to introduce regulations to stop people from using money from crime to buy real estate. Steven Tian, a professor who looks for links between businesses and criminals in Russia, said the new rule was needed a long time ago.

Tian mentioned that it’s not a problem exclusive to Russian rich people and shell companies are actually used in the US real estate market too. Erica Hanichak, from an organization focused on corporate transparency, requested the Administration to present the rule by late March when they will hold a democracy summit with other countries like Costa Rica, Netherlands, South Korea and Zambia.

She said, this is a chance for the United States to show it’s in charge. Not only by fixing crooked behavior from other countries but also by fixing those things here that help bad behavior go around the world.