Reed Smith In-depth

Yesterday, U.S. Treasury Secretary Janet Yellen and Attorney General Merrick Garland met virtually with their counterparts from Australia, Canada, Germany, France, Italy, Japan, the UK, and the European Commission to launch a multilateral task force to identify and freeze the assets of Russian oligarchs. The Russian Elites, Proxies, and Oligarchs (REPO) task force, the formation of which was announced last week, is part of an international effort to enforce sanctions imposed against Russian officials and elites close to the Russian government, as well as their families and enablers, and to prevent these individuals from hiding assets around the world.

During Wednesday’s inaugural meeting, the REPO task force members discussed ways to ensure the effective, coordinated implementation of the group’s collective financial sanctions relating to Russia, as well as the provision of assistance to other nations to locate and freeze assets of sanctioned individuals or entities located within their jurisdictions. Cooperation between the U.S. government and foreign partners has already yielded notable successes. In the last three weeks alone, information provided by U.S. law enforcement to foreign partners has contributed to the restraint of multiple vessels worth hundreds of millions of dollars controlled by sanctioned individuals and entities. The REPO task force also discussed the need to preserve evidence and determine whether frozen assets, or other assets linked to sanctioned individuals or entities, are subject to forfeiture. Finally, the group discussed ways to bring to justice enablers and gatekeepers who have facilitated the movement of sanctioned assets or other illicit funds.

The Department of Justice’s (DOJ’s) newly launched KleptoCapture task force, which Attorney General Garland established on March 2, 2022, will help support this international effort. As we discussed previously, the DOJ is devoting significant prosecutorial and law enforcement resources to the KleptoCapture task force to hunt for sanctions violators and identify related criminal conduct. Deputy Attorney General Lisa Monaco, who is overseeing the task force, said in a statement, “Oligarchs be warned: we will use every tool to freeze and seize your criminal proceeds.” The DOJ has indicated that the KleptoCapture task force will use the most cutting-edge investigative techniques β€’ including data analytics, cryptocurrency tracing, foreign intelligence sources, and information from financial regulators and private sector partners β€’ to identify sanctions evasion and related criminal misconduct. As part of its mission, the KleptoCapture task force will seek to (i) investigate and prosecute violations of current and future sanctions imposed in response to Russia’s invasion of Ukraine, as well as sanctions imposed for prior instances of Russian aggression and corruption; (ii) combat unlawful efforts to undermine restrictions taken against Russian financial institutions, including the prosecution of those who try to evade know-your-customer and anti-money laundering measures; (iii) target efforts to use cryptocurrency to evade sanctions or launder proceeds of foreign corruption; and (iv) seize assets belonging to sanctioned kleptocrats or assets identified as the proceeds of illicit conduct.