US isn't ready to seize all of the assets of the Russian Central Bank just yet: report

The world doesn't have the military size and resources that the United States does, so when it comes to seizing Russian yachts parked in other countries or other international assets it can be costly and difficult. The New York Times is now reporting that the White House is now talking about seizing not just property from oligarchs, but a large chunk of the Russian economy.

Two large yachts, the Halo and the Garçon are tied to Russian oligarch Roman Abramovich, the Financial Times reported earlier this year. Those yachts have been sitting in Jolly Harbour in Antigua, which is still a member of the British Commonwealth with Queen Elizabeth II as its head of state. But the UK hasn't made any moves to enforce sanctions on the yachts stashed at Antigua's shores.

The 55-year-old Abramovich was already forced to try and finagle his way out of having the Chelsea Football Club seized by handing it to a foundation. He began trying to sell off his assets in Feb. 2022 as the war in Ukraine ramped up.

While the U.S. has been willing to help other countries seize assets, when it comes to taking over their central bank and turning over that money to Ukraine, the White House isn't ready to go that far just yet.

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"Top Biden administration officials warned that diverting those funds could be illegal and discourage other countries from relying on the United States as a haven for investment," said the report.

Ukraine President Volodymyr Zelensky is estimating that it could cost as much as $600 billion to rebuild Ukraine after Russia's invasion. He said that if the Russian assets were taken across the world, that money could help fund rebuilding.

"In a joint statement last week, finance ministers from Estonia, Latvia, Lithuania and Slovakia urged the European Union to create a way to fund the rebuilding of cities and towns in Ukraine with frozen Russian central bank assets, so that Russia can be 'held accountable for its actions and pay for the damage caused,'" said the report.

While the U.S. has led the effort to isolate Russia internationally when it comes to asset forfeiture, the Group of 7 is more willing to use the funds for Ukraine.

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"Internally, the Biden administration has been debating whether to join an effort to seize the assets, which include dollars and euros that Moscow deposited before its invasion of Ukraine," reported the New York Times. "Only a fraction of the funds are kept in the United States; much of it was deposited in Europe, including at the Bank for International Settlements in Switzerland."

Previous reports have indicated that Russia was caught off guard when they saw how quickly the U.S. was able to enforce the sanctions and freeze bank accounts and investments. In 2014, it took a year to happen. This time around, the U.S. government moved swiftly.

Russia is trying to keep its money in the central bank reserves to keep its economy stable. Their problem, however, is that they sent all of those funds to other countries. So, it's possible for countries to take it, but it could put Russia in a position where it has nothing else to lose. Sources told the Times that the U.S. is working with Europeans to find a solution.

Economist and Treasury Secretary Janet Yellen doesn't believe the move is legal, but Harvard Law Professor Laurence Tribe has another opinion.

"If Secretary Yellen believes this is illegal, I think she’s flatly wrong. It may be that they are blending legal questions with their policy concerns," he told the Times. He cited precedents set in conflicts with Afghanistan, Iran and Venezuela.

University of Virginia Law Professor Paul Stephan says that those aren't the same in this case, and it could escalate the conflict.

“I would find that alarming,” Stephan said. “We’ve been trying to be stable, rather than destabilizing, in this area.”

See the full report at the New York Times.