In a unprecedented move, the United States has delivered to Estonia nearly half a million dollars seized from a Russian smuggling network for immediate repairs to Ukraine’s damaged electrical infrastructure, U.S. and Estonian officials announced today.
The payment of $484,696 represents proceeds seized by the Justice Department after breaking up an illegal procurement scheme that tried to import American-made machinery with military applications into Russia, in violation of export laws.
It is the first time that seized Russian assets have been directly allocated to aid Ukraine as Ukraine grapples with a brutal invasion by Russian forces.
Signing the transfer agreement, Deputy Attorney General Lisa Monaco said, “Today’s announcement reflects the unwavering determination of the United States and our Estonian partners to cut off President Putin’s access to Western technologies he relies on for illegal activities against Ukraine.
Novel Approach to Disrupting Russia’s War Effort
The seized funds are linked to a 2022 investigation in which Russian operators were arrested by US authorities while trying to illegally purchase high-precision “jig grinder” machine tools from a Connecticut manufacturer. Such equipment can be used in Russia’s defense and nuclear programs.
The machine was stopped before it could be exported to Russia, but the government seized nearly half a million dollars sent from the Russian smuggling network to finalize the illegal purchase.
As recently agreed, the funds are being repurposed for emergency repairs to Ukraine’s transmission infrastructure and electrical grid, which have been deliberately damaged by Russian attacks. Estonia will spend money on quick repair projects.
Prosecutor Andrew Adams of the Justice Department’s Kleptocapture Task Force addressed Russian sanctions violations, saying, “The Putin regime has attempted to undermine morale in Ukraine, cripple the Ukrainian economy, and use winter as a weapon of war.
Deliberately targeted critical and civilian infrastructure. The funds we are committing to Estonia today will be used to dramatically reduce the time needed to evaluate and prioritize urgent repairs to Ukraine’s electrical infrastructure , mainly to try to keep the lights on.”
The agreement also reflects a new approach by US authorities to imposing sanctions and export controls on Russia, while exploring innovative measures to divert criminal assets seized for the direct benefit of Ukraine’s war campaign.
“This transfer is the first transfer of its kind from the United States to a foreign ally for the express purpose of assisting Ukraine,” said Deputy Attorney General Monaco. “To ensure that the Ukrainian people can respond and rebuild, “The Department of Justice will continue to pursue creative solutions.”
Combating Sanctions Evasion Schemes
In addition to the money transfers, U.S. authorities this week indicted Vadims Ananiks, a Latvian national, for conspiring to buy illegal machinery.
In 2019, Ananix traveled to Connecticut under false pretenses to finalize the purchase of a jig grinder machine as part of a smuggling network that requires an export license because the machine can be used military . He and his conspirators tried to portray Russia as the real destination.
“I commend the investigators who prevented this sensitive piece of Connecticut-made equipment from crossing the Russian border,” said U.S. Attorney Vanessa Roberts Avery of the District of Connecticut.
“We continue to work with our law enforcement partners and the Government of the Republic of Estonia to enforce our laws.” “We thank you for helping us fulfill our mission of pursuing the assets of infringers and providing fair compensation to their victims.”
A Deterrent Against Enabling Russian Aggression
U.S. and Estonian officials announcing the money transfer described it as a strong deterrent against Russia considering invading Ukraine through sanctions evasion or illegal purchases.
“Effective prosecution of sanctioned crimes is a very important part of this,” said Tonis Saar, Secretary General of Estonia. The objective here is not only to find, prosecute and ensure justice, but also to make the illicit income victims, that is, Ukraine. In the future, I “Hopefully this will become a new normal for sanctioned crimes in other countries.”
“These efforts are yielding results,” said Matthew Olsen, assistant attorney general for national security at the Justice Department. Today, we once again hold Russia accountable and support Ukraine as they bravely resist and rebuild.”
As the war in Ukraine continues, the Justice Department has promised to continue aggressive action through its KleptoCapture Task Force to disrupt Russia’s contraband theft networks and illicit procurement pipelines.