HR-4175-118
Ordered to be Reported in the Nature of a Substitute (Amended) by the Yeas and Nays: 40 - 2.
Sponsored by Michael McCaul (R-TX)
What it does
This bill would authorize the President to seize Russian sovereign assets — including funds held by Russia's central bank, direct investment fund, and ministry of finance — that are located within U.S. jurisdiction. Confiscated funds and proceeds from liquidated property would be deposited into a newly created Ukraine Support Fund, administered by the Department of State, to compensate Ukraine for damages from the Russian invasion and to support reconstruction, humanitarian aid, and recovery efforts. The bill would also direct the President to work with foreign allies to build an international mechanism for coordinating the use of both U.S.-held and foreign-held confiscated Russian assets.
Who benefits
Ukrainian citizens and the Ukrainian government, who would receive financial compensation and reconstruction funding. U.S. allies and foreign partners who support a coordinated international sanctions and asset-seizure regime. U.S. financial institutions that would have a clear legal framework for reporting and handling Russian sovereign assets. Defense and reconstruction contractors who may receive contracts funded through the Ukraine Support Fund.
Who is hurt
Russia's government, whose sovereign assets held in U.S. financial institutions would be subject to seizure and liquidation. U.S. financial institutions that hold Russian sovereign assets, which could face legal uncertainty, diplomatic blowback, or operational disruption. Foreign governments and investors who may view sovereign asset confiscation as a precedent threatening the security of their own assets held in the United States, potentially reducing confidence in U.S. financial markets. Countries that maintain neutral or non-aligned positions on the Russia-Ukraine conflict, who may face pressure to participate in the international mechanism.
Supporters argue
Supporters argue that seizing Russian sovereign assets is a proportionate and legally grounded response to Russia's invasion of Ukraine, which has caused hundreds of billions of dollars in documented damages. They contend that the United States has both the legal authority and a moral obligation to ensure that the aggressor — not American taxpayers or Ukraine's allies alone — bears the financial cost of the destruction. Supporters also argue that coordinating with international partners through a formal mechanism would strengthen the global rules-based order, deter future acts of aggression by demonstrating that sovereign assets can be held accountable, and provide Ukraine with a sustainable, non-appropriations-dependent source of reconstruction funding. They further note that the bill's reporting requirements would give the government a clear picture of Russian assets within U.S. jurisdiction, enabling more effective enforcement of existing sanctions.
Opponents argue
Opponents argue that confiscating the sovereign assets of a foreign state — even one under sanctions — sets a dangerous legal and diplomatic precedent that could undermine the United States' standing as a safe and neutral custodian of foreign reserves. They contend that such action may violate customary international law principles of sovereign immunity, expose the U.S. government to retaliatory measures, and prompt other nations to move their reserves out of U.S. institutions, weakening the dollar's role as the world's reserve currency. Opponents also argue that the bill grants the executive branch broad, largely unchecked authority to confiscate and dispose of foreign property, raising separation-of-powers concerns and bypassing the treaty process that the Constitution requires for binding international agreements. They further warn that the international mechanism envisioned by the bill could entangle the United States in open-ended financial commitments without clear congressional oversight or exit criteria.
Constitutional context
The bill implicates several constitutional provisions. The President's authority to confiscate foreign sovereign assets derives from the International Emergency Economic Powers Act (IEEPA) and the Foreign Sovereign Immunities Act (FSIA), both of which operate under Congress's Foreign Commerce Clause power (Art. I, Sec. 8) and the President's Commander-in-Chief and foreign affairs powers (Art. II). The bill's direction to establish an international mechanism with foreign partners raises questions under the Treaty Clause (Art. II, Sec. 2), which requires Senate ratification for binding treaties — though executive agreements may be used for non-binding arrangements, per Medellin v. Texas (2008). The President's broad recognition and foreign relations powers, affirmed in Zivotofsky v. Kerry (2015), support executive leadership in coordinating allied sanctions. Trump v. Hawaii (2018) affirmed broad executive discretion in national security-related foreign policy actions. The Supremacy Clause (Art. VI) is relevant to how U.S. obligations under international law interact with domestic statutory authority to seize sovereign assets.
Checks and balances
The executive branch would gain significant new authority: the President would be empowered to order U.S. financial institutions to report Russian sovereign assets and to confiscate and liquidate those assets unilaterally. The Department of State would control disbursement of the Ukraine Support Fund with limited explicit congressional appropriations oversight specified in the bill. Congress retains indirect oversight through its appropriations power and the ability to repeal or amend the authorizing statute, but the bill as written concentrates day-to-day operational authority in the executive branch. The bill also directs — rather than merely authorizes — the President to pursue an international coordination mechanism, which could constrain future executive flexibility in foreign policy.
Historical precedent
The closest U.S. precedent is the post-9/11 freezing and partial transfer of Afghan sovereign assets held at the Federal Reserve (2022), in which the Biden administration used IEEPA to redirect approximately $3.5 billion toward Afghan humanitarian relief. More broadly, the post-World War II seizure and redistribution of Axis powers' assets under the Trading with the Enemy Act (TWEA) established early precedent for wartime asset confiscation. The international coordination aspect echoes the post-WWII German reparations framework established at Potsdam (1945).