Two weeks ago, the Congress passed (and President Biden signed) four key pieces of legislation related to national security. Three of the bills provided assistance to Ukraine, Israel, and Taiwan. They received the most attention. The one that got the least attention was a mixed bag of provisions, such as a forced divestiture of TikTok.

Included in that bill was something called the REPO Act that authorizes the President to steal any Russian assets, including U.S. Treasury securities, that come under U.S. jurisdiction. The impact of the REPO Act is limited by the fact that only about $10 billion of Russian sovereign assets are actually under U.S. jurisdiction. Yet, the act contemplates this theft will be a down payment on a much larger theft to be conducted by NATO allies in Europe.

The REPO Act says, “The President shall take such action…necessary to seek to establish a common international compensation mechanism, in coordination with foreign partners … that shall include the establishment of an international fund to be known as the “Common Ukraine Fund”.” This is a clear reference to the $290 billion of Russian sovereign assets held in Europe.

The act then says that the assets stolen by the U.S. will be contributed to the Common Ukraine Fund. No doubt, the U.S. will be the most powerful voice in the administration of the $290 billion common fund.

The U.S. goal is to use the G7 summit in Apulia, Italy on June 13-15, 2024, as a platform for getting the other G7 members to go along with the Common Ukraine Fund and to steal any Russian assets under their jurisdiction. If Europe joins the U.S. in stealing Russian assets, Russia will retaliate by seizing billions of dollars of direct foreign investment in Russia owned by major European companies such as Siemens, Total, BP, and others.

The value of the European assets subject to seizure by Russia is greater than the value of the U.S. Treasuries owned by Russia. It could be the case that Russia makes a net profit from the two-way confiscation. Nice job, Joe Biden.

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