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A debate is centered on what to do with $300 billion in seized Russian assets


Three hundred billion dollars. That is the value of Russian assets that were frozen by the U.S. and Western allies shortly after Moscow's full-scale invasion of Ukraine two years ago. The Biden administration says it's time to seize that money and use it to help Ukraine. But many European nations say, not so fast. Here's NPR international affairs correspondent Jackie Northam.

JACKIE NORTHAM, BYLINE: The $300 billion in frozen assets were part of Russia's foreign holdings - bonds, cash and other assets - the Kremlin had been stashing in financial institutions across the globe, including the U.S. The money has been sitting there as the war in Ukraine drags on, says Jeffrey Schott, a sanctions specialist at the Peterson Institute for International Economics.

JEFFREY SCHOTT: Once the assets were frozen, it was pretty clear, given the Russian atrocities in Ukraine, that the money wasn't going back to Russia.

NORTHAM: About $4 billion of it are sitting in the U.S. The lion's share, more than $200 billion, is held in European financial institutions. Over the past two years, there's been debate over whether the funds could be taken from Russia and used to help pay for Ukraine's reconstruction. Karel Lannoo heads the Center for European Policy Studies, an independent think tank in Brussels. He says European nations view seizing the Russian funds as a risky move.

KAREL LANNOO: There is appetite. But nobody knows how to do it in a way which is kind of legally logical, correct, consistent enough without leading to any other repercussions. And that's what they are afraid of.

NORTHAM: Alex Brideau agrees. He's a Russia and Ukraine specialist at the Eurasia Group, a political risk consultancy.

ALEX BRIDEAU: Then there's also the potential of retaliation by the Russian government, which I think they're concerned about - that their companies assets in Russia would be targeted. And I think the Europeans are concerned that European interests are going to be hurt disproportionately because they hold the vast majority of these assets.

NORTHAM: Brideau says there's also concerned that seizing the Russian funds could undermine trust in Europe's currency, the euro, and Europe itself as an investment location.

BRIDEAU: There also have been questions throughout about what this would mean in terms of broader implications for other crises, say, if there was a crisis with China over Taiwan and this kind of issue came up again.

NORTHAM: For months, the Biden administration has tried to build consensus with European allies and other countries to seize the $300 billion. But now that U.S. support for Ukraine is uncertain and funding is stalled in the House of Representatives, the Biden administration is increasing pressure on the EU to unfreeze the funds, says Laurence Tribe, professor of constitutional law emeritus at Harvard University.

LAURENCE TRIBE: The idea that we would let this money just sit there and do nothing while Congress is also stalling I think became less and less acceptable in the White House and at the State Department and at Treasury.

NORTHAM: Tribe and high-profile economists in the U.S. and Europe have been advocating for seizing the Russian funds. Tribe says the legal obstacles presented by Europe are exaggerated, and he says it's within international law to transfer the money to Ukraine as payment for damages.

TRIBE: The aggressor has an obligation to make reparations sufficient to compensate the country that is invaded for all the harm. And here there's no question that the harm is at least in the $400-billion range.

NORTHAM: Even if it's skittish, the European Union has agreed to set aside windfall profits generated by Russia's frozen assets. Anders Ahnlid, who last year headed up the EU working group looking into the funds, said that would be the best way of using the money under both international and EU law.

ANDERS AHNLID: And those windfall gains that amount to between 2 and 4 billion euros per year could be used for Ukraine's reconstruction without interfering with international law.

NORTHAM: Last month, European Commission president Ursula von der Leyen took it a step further, saying the EU should use those windfall profits to buy weapons for Ukraine to fight Russians.

Jackie Northam, NPR News, Washington. Transcript provided by NPR, Copyright NPR.

NPR transcripts are created on a rush deadline by an NPR contractor. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.

Jackie Northam is NPR's International Affairs Correspondent. She is a veteran journalist who has spent three decades reporting on conflict, geopolitics, and life across the globe - from the mountains of Afghanistan and the desert sands of Saudi Arabia, to the gritty prison camp at Guantanamo Bay and the pristine beauty of the Arctic.