The Dentons Global Task Force on Ukraine Transformation continues to monitor developments and opportunities relevant to Ukraine’s transformation and rebuilding efforts.
In recent weeks, the US passed a $61 billion aid package for Ukraine, authorized the President to repurpose seized Russian assets for specific purposes in support of Ukraine, expanded the statute of limitations for violations of US sanctions, and prohibited the import of Russian enriched uranium, effective August 11, 2024.
Additionally, US, European Union (“EU”), and G7 leaders have formulated a plan to use the profits earned on certain frozen Russian assets to provide additional aid to Ukraine.
US $61 billion aid package, repurposing Russian assets in support of Ukraine
Last month, the US Congress passed legislation that included $61 billion in aid for Ukraine and an authorization allowing the Executive Branch to use Russian sovereign assets seized by the US to support Ukraine.
$61 billion in US aid to support Ukrainian military, government, humanitarian aid
The $61 billion package includes: (i) $25.7 billion for military equipment, the largest portion of the aid package for Ukraine; (ii) $17 billion for military-related activities and support to the Ukraine Security Assistance Initiative; (iii) $7.9 billion in economic support of the Ukrainian government’s provision of essential services; (iv) $7.3 billion to increase the presence of US forces in Europe; (v) $2.5 billion in humanitarian aid; and (vi) $335 million allocated to various US government agencies for various related activities, including nonproliferation efforts and medical device research.
Additionally, the law extends the statute of limitations for violations of US sanctions, specifically the International Emergency Economic Powers Act (“IEEPA”) and the Trading with the Enemy Act (“TWEA”), from five to 10 years.
Authorizing use of Russian sovereign assets seized by US for Ukraine reconstruction
In addition to military aid, the legislation, signed into law by President Biden in April 2024, includes a provision titled the Rebuilding Economic Prosperity and Opportunity for Ukrainians Act (the “REPO Act”). The REPO Act allows the President to transfer seized Russian assets into an account established by the law, “Ukraine Support Fund,” subject to jurisdictional limitations. After transferring assets into the account and providing the requisite notice to Congress, the REPO Act permits the President to use the seized assets for certain purposes in support of Ukraine, such as economic assistance and reconstruction efforts related to the war.
Members of Congress issued a letter to the Biden Administration, urging the President to implement the REPO Act and collaborate with G7 and EU partners to find creative mechanisms for using Russian sovereign funds frozen in their respective jurisdictions ahead of the upcoming G7 meeting in Italy, June 13-15. The letter—sent by Senator Risch (R-Idaho), ranking member of the Senate Foreign Relations Committee, Senator Whitehouse (D-Rhode Island), a member of the Commission on Security and Cooperation in Europe, Representative McCaul (R-Texas), Chairman of the House Foreign Affairs Committee, and Representative Kaptur (D-Ohio), Co-Chair of the Congressional Ukraine Caucus—inquires as to the Treasury Department’s engagement with central banks, regulators, and repositories in partner jurisdictions, specifically highlighting Euroclear, a repository in Belgium, on efforts to repurpose frozen Russian sovereign assets.
EU and G7 plans for repurposing interest earned from seized Russian assets
On May 21, 2024, the Council of the European Union approved an agreement to allow the interest generated from frozen assets (referred to as “windfall profits”) held primarily by the Belgian depository Euroclear to finance the sale and provision of military aid to Ukraine. The seized assets generate approximately €3 billion in windfall profits per year. The majority (90 percent) of the €3 billion would be placed in a special fund dedicated to supporting the purchase of military aid through the European Peace Facility with the remainder being dedicated to non-military aid and reconstruction efforts on an annual basis over several years.
Concurrently, G7 leaders have agreed on a plan to provide financial support for Ukraine in the form of a $50 billion loan raised on the market, borrowed on behalf of Ukraine, and serviced by windfall profits from seized Russian assets. The plan, announced on June 13, 2024, would secure a swift delivery of a substantial sum that G7 leaders have committed to begin disbursing before the end of 2024.
The $50 billion loan, raised by the US and other partners, will be secured by the windfall profits from more than $260 billion in Russian assets currently frozen and held primarily in Europe.
US bans import of Russian enriched uranium
In other relevant US developments, on May 13, 2024, President Biden signed into law an import prohibition against Russian enriched uranium. The prohibition becomes effective approximately 90 days after enactment, on August 11, 2024. The law permits the Department of Energy (DOE) to issue waivers authorizing import of otherwise banned Russian enriched uranium in certain qualifying circumstances through 2027. On May 20, 2024, DOE issued guidance on the waiver process, entitled, “Instructions for Requesting a Waiver from the Secretary of Energy for the Import of Russian Low-Enriched Uranium (LEU) into the United States.”
To support development of the domestic US uranium industry, the law also provides access to approximately $2.7 billion in funding for expansion of US-based enrichment facilities.
Conclusion
For more information about the Global Task Force on Ukraine Transformation, please visit the Hub webpage and reach out to our key contacts should you have any questions.
Dentons acknowledges and thanks associate Leah Kehoe for her contribution to the article.
