Russia-Ukraine: US aid delay ‘critical’ as country looks to boost frontline fight

Ruth Green, IBA Multimedia JournalistTuesday 14 May 2024

An historic US aid package was signed into law at the end of April, months after a political stalemate threatened to derail it. As well as providing military aid to Israel and Taiwan, the deal will see Ukraine receive $61bn, including around $26bn for new military equipment, $17bn for weapons and training, $8bn in economic assistance and $2.5bn in humanitarian aid.

The package comes as a much-needed boost to Ukraine’s military. ‘We are very glad that procedural hurdles have been overcome and the bill was passed,’ Ukraine’s Deputy Justice Minister, Iryna Mudra, tells Global Insight.

Mudra says the delay was ‘critical’ and could have cost the country the war. As Ukraine’s frontline faces renewed pressure in Kharkiv, she hopes this latest injection of funding will help the country ‘survive this year’.

The significance has also been felt in the US. ‘This aid comes at the right moment – maybe a bit too late – but this is an important one for the safety and security of Ukrainians that continue to suffer from these daily attacks by Russia,’ says Jonathan Katz, Senior Director for the Anti-Corruption, Democracy and Security Project in Governance Studies at the Brookings Institution.

More than 480 days had elapsed since Congress last authorised sending US weapons to Ukraine. Support has come from elsewhere. In February, the EU agreed a €50bn (£42bn) funding package. More recently, the UK pledged to send additional assistance, including 400 vehicles, more than 1,600 missiles, four million rounds of ammunition and £500m in military funding.

Those assets are part of the equation of supporting Ukraine, including when there is an impasse in decision-making, like we saw in the United States over the last six months

Jonathan Katz
Senior Director, Brookings Institution

Just days before the US deal was passed, NATO Secretary General Jens Stoltenberg said the delay in funding had already ‘had real consequences' in Ukraine, which was suffering severe shortages in air defence munitions.

Iran’s unprecedented move in mid-April to carry out strikes against Israeli territory may have marked a turning point in the stalled US debate, says Katz. ‘It was eerily reminiscent of how Ukraine has faced these missiles and drone attacks,’ he says. ‘Seeing the Israelis do that as well, and that we’re in this moment of potential conflict – both in Europe but also in the Middle East in a much broader way – certainly played a role in galvanising support in Congress.’

Several laws related to Ukraine were folded into the package. In particular, the Rebuilding Economic Prosperity and Opportunities for Ukrainians Act (REPO), which gives the president authority to seize and use Russian sovereign assets that have been frozen in the US to help rebuild Ukraine.

From the REPO Act coming into force, the US president and the Treasury Department have 90 days to locate frozen Russian assets in the US and 180 days to report their findings to Congress. Around $6 billion of the $300 billion in frozen Russian assets are sitting in US banks, with the bulk of the remaining assets dotted across Europe’s financial centres.

Proposals to use these assets to help fund Ukraine’s reconstruction have fiercely divided global powers. In early May, the EU said it would seize windfall profits from such assets to finance weapons and aid to Ukraine, but many G7 countries are still wary of the ramifications for international law.

‘The G7 is still, I think, stymied now more by these issues of fears of Russian retaliation,’ says Philip Zelikow, a Senior Fellow at Stanford University's Hoover Institution and one of the lawyers who drafted the legal arguments for using the assets to fund Ukraine’s reconstruction. ‘If it's held in lawful international escrow with international trustees managing the escrow accounts then you have a lawful basis for securitising the assets you hold.’

Many hope this step by the US could pave the way for other nations to hold Russia financially accountable for the war. ‘We shoot ourselves in the foot when we don't find a consistent way to fund Ukraine,’ says Katz. ‘Those assets are part of the equation of supporting Ukraine, including when there is an impasse in decision-making, like we saw in the United States over the last six months.’

The legislation also includes key changes to US sanctions and export control laws, including doubling the enforcement statute of limitations for sanctions violations from five to 10 years for violations of economic sanctions authorised under the International Emergency Economic Powers Act and Trading with the Enemy Act.

This is likely to have a significant impact both on record-keeping requirements and regulatory investigations over time, says Tom Best, a litigation partner at Paul Hastings in Washington DC.

‘For so many of these investigations, gathering information, often times principally from abroad, is difficult and can take a long time,’ says Best, who also co-chairs the Non-trial Resolutions of Bribery Cases Subcommittee of the IBA Anti-Corruption Committee. ‘As time goes on and the full 10-year look-back period kicks in, investigating authorities will have a progressively longer period of conduct to investigate, and attendant evidentiary record to gather, eventually reaching back the full 10 years.’

This latest tranche of aid brings the total US commitment to Ukraine to $175bn since February 2022. The package’s opponents often cited corruption as a reason not to give further aid to the country. Katz says such concerns do a disserve to Ukraine’s progress. ‘It’s really important to debunk this idea that Ukraine is so corrupt that you shouldn't be providing it with assistance,’ he says. ‘Ukraine has made impressive strides, both domestically, but also on its EU track.’

In 2023, the country achieved its best-ever ranking in Transparency International’s 2023 annual corruption perceptions index. Mudra confirmed to Global Insight that inspections of the use of US funds have already taken place in Ukraine and confirmed no ‘significant abuses’ had taken place.

The package also provides an opportunity for the US to strengthen its own auditing mechanisms, stresses Katz. In January, the Pentagon's inspector general reported that US military had not properly tracked around $1bn in weapons sent to Ukraine. US agencies say they have around 400 personnel in the US, Germany and Ukraine overseeing the country’s assistance to Ukraine.

Image credit: Kate/AdobeStock.com