Dollar Sanctions in Ukraine Aid Package Risk Dollar Privilege

Commentary Buried in the newly adopted “21st Century Peace Through Strength Act” (H.R.8038) that was recently enacted, is a provision that authorizes the president to seize and transfer certain Russian sovereign assets to fund Ukrainian war compensation or reconstruction. While only $4–5 billion of those assets are subject to U.S. jurisdiction, another $190 billion is held in Europe, primarily within Belgium, according to the bill.  In addition, the Biden administration is also reportedly drafting rules that would impinge Chinese banks’ ability to conduct dollar-based trade. The rules would sanction China for selling what the Biden administration claims are “dual use” (i.e., civilian and military) technology. Beijing had already complied with the Biden administration’s requests to send military aid to Ukraine. ...