Can Russian oligarchs oppose US sanctions?

Russian President Putin.

Russian President Vladimir Putin during a telephone meeting with members of his country’s government on March 10, 2020.

ABA Legal Facts Check launched in August 2017 and is the first fact-checking site to focus solely on legal matters. This article has been republished with permission.

In March 2022, the White House announced a series of sanctions against Russian oligarchs accused of enriching themselves by harming the Russian people and providing resources to support them. support the President. Vladimir PutinUkraine’s invasion.

In one notification On March 3, eight tycoons, their family members and companies were cut off from the US financial system, which froze their assets in the United States and restricted their employment. travel and use their property. Another 19 tycoons and 47 of their family members and close associates have had their visas restricted. Is there a legal basis for such actions?

Sanctions against individuals introduced in March 2022 add to the most comprehensive set of multilateral economic sanctions ever imposed on a large and inclusive global economy March 24 notification of the US Treasury Department on the new sanctions included 328 members of the Russian State Duma, the lower house, as well as other Russian elites and interests.

Many of those sanctioned had any assets under U.S. jurisdiction “freeze” or frozen, meaning the sanctioned party could not have access to those assets. there until the sanctions are lifted, like a Law blog explained. Prior to the March 24 announcement, the United States had imposed containment sanctions on more than 200 Russian entities and individuals, and the European Union had more than doubled that number.

The United States government has used economic sanctions to address national security and foreign policy crises for more than two centuries. For example, during the War of 1812, the Secretary of the Treasury imposed economic restrictions on Great Britain for harassing American sailors. During the Civil War, Congress passed legislation banning dealings with the Confederacy, calling for the seizure of goods associated with such transactions, and introducing a licensing regime under rules and regulations set forth by the Treasury. manage. Today, US economic sanctions are place targets more than two dozen countries, in addition to several transnational threats, such as terrorism and proliferation of weapons of mass destruction.

Sanctions are legal, mainly derived from two statutes, National Emergencies Law and International Emergency Economic Powers Act (IEEPA). Enacted in 1977, the IEEPA authorizes the president to freeze assets, ban transactions, or regulate assets in which foreigners have an interest, in accordance with the president’s declaration of a national emergency.

After the names of financiers or other parties subject to U.S. sanctions are publicly posted, banks and other businesses in the United States must ensure that they freeze any assets in their possession. owned by those parties, including property held under an alias or of an organization that is 50 percent or more owned by the sanctioned parties.

Blockade sanctions are imposed immediately because of the risk that a party subject to such sanctions will seek to move their assets with prior notice. chairperson Joe BidenFebruary 21 executive orderfor example, stated that because affected Russians with “legitimate presence in the United States” could “make these measure(s) ineffective” by immediately transferring their assets, “no prior notice of listing or identification is required”.

Those affected by containment sanctions can oppose the sanctions by filing a petition with the Treasury. Office of Foreign Assets Control or in federal court, as the IEEPA considers the availability of judicial review of sanctions decisions. But in the 45 years since IEEPA was implemented, the government has prevailed in most of the lawsuits, often challenging the constitutionality of these Fourth Amendment sanctions, preventing the government from ” unreasonable searches and seizures” and the Fifth Amendment procedural provision.

The Biden administration has also ramped up federal law enforcement resources to implement sanctions. On March 2, the Minister of Justice Merrick B. Garland announced the launch of the Interagency Task Force KleptoCapture to enforce sweeping sanctions, export restrictions, and economic countermeasures imposed by the United States. Two weeks later, the United States and its allies launched a global effort aimed at Russian oligarchs.

Among other things, the mission of the KleptoCapture Task Force will include “investigating and prosecuting violations of new and future sanctions” and “using confiscation authorities.” civil and criminal property to seize the property of sanctioned individuals or property identified as proceeds from illegal acts”. The US Department of Justice (DOJ) announced on March 2 that “will pursue and prosecute when supported by the facts and the law” and “property and civil forfeiture of proceeds illegitimate… will be used to deny resources to Russia Aggression.”

These processes will not be quick. Even civil forfeiture claims can be filed against frozen U.S. property, such as a home, yacht, or investment account, whose owner is not physically located in the U.S. States or go to court, which can take several years to resolve. Equal Reuters detailed, the DOJ filed a civil forfeiture complaint in July 2016 to recover over $1 billion in assets in connection with the looting of Malaysia’s sovereign wealth fund. Three years later, the DOJ reached a $700 million settlement with a Malaysian financier accused of being the mastermind of the scheme.

While Russian oligarchs may not like freezing their personal assets in the US, the law and previous trials suggest that oligarchs may not be successful in disputing them and even at least have the ability to take back the property at any time.

Read more of the ABA Legal Fact Check series here.


Is there a trick we should know? [email protected] Can Russian oligarchs oppose US sanctions?

James Brien

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