The United States will transfer $500,000 of forfeited Russian wealth to repair electrical infrastructure in Ukraine damaged by invading Russian troops, the Department of Justice (DOJ) announced on Feb. 17.
The Russian funds were confiscated by U.S. agencies last year after intercepting an illegal attempt to export to Russia an American-origin tool that has uses in the defense and nuclear sectors.
It’s the first such transfer by the United States to a foreign ally for the explicit purpose of assisting Ukraine and is the second time that the DOJ’s KleptoCapture unit has confiscated Russian assets and made them available for Ukraine.
The $500,000 in funds are being transferred to Estonia rather than directly to Ukraine since “the facts of this case do not allow” for a transfer to Kyiv, according to the DOJ.
“Today’s announcement demonstrates the unwavering resolve of the United States and our Estonian partners to cut off President Putin’s access to the Western technologies he relies on to wage an illegal war against Ukraine,” said Deputy Attorney General Lisa Monaco, who signed the transfer agreement on behalf of the United States.
The Jig Grinder
The fund transfer resulted from a March 2023 investigation of an attempt to smuggle an export-controlled tool to Russia known as a jig grinder.Jig grinders are used in the defense sector to make precision cuts. U.S. laws dictate that an export license be secured prior to exporting or reexporting jig grinders to Russia because of the devices’ nuclear and defense applications.
The action led to the confiscation of $484,696 wired into the United States to purchase the item. Authorities intercepted the jig grinder before it reached Russia.
Multiple individuals and companies who were part of the smuggling were also charged. Latvian national Vadims Ananics, 47, was arrested in Latvia on Oct. 18, 2022, and admitted to his role in attempting to violate U.S. export laws. He pleaded guilty in a federal court.
“In August 2019, to finalize the purchase of the jig grinder, Ananics and others traveled to Bridgeport, Connecticut, where he informed the sellers that the jig grinder was being purchased for the benefit” of a Latvia-based company, CNC Weld.
However, “only after the jig grinder was exported from the United States did Ananics inform the sellers that CNC Weld was not the end user.” American and Latvian authorities took hold of the machine in Riga.
DOJ’s Transfer Authority
The DOJ’s authority to transfer illicit Russian funds to Ukraine comes from a congressional authority that the department secured in 2023. If DOJ prosecutors prove that confiscated assets are tied to a specific crime, it can secure a court order granting the right to transfer these assets.For instance, properties belonging to Russian oligarch Oleg Deripaska in New York and Washington, estimated to be worth $50 million, are currently ineligible to be transferred. The proposed Act will allow such transactions.
“As the people of Ukraine fight for their democracy, hundreds of millions of dollars in assets seized from the oligarchs fueling Putin’s war machine have sat frozen across the United States,” said Reps. Brendan F. Boyle (D-Pa.) and Bill Keating (D-Mass.).
“We must do everything in our power to support the Ukrainian people in their fight for freedom. That means passing this common-sense legislation to deliver these assets to Ukraine—and also passing an urgently needed supplemental funding package that honors our commitment to democracy around the world.”
Almost two years since the Russian invasion, Ukraine has recaptured more than 50 percent of the occupied territory. Russia currently occupies 18 percent of the country.
