Russian War Crimes in Ukraine Tax Act

To amend the Internal Revenue Code of 1986 to impose certain tax penalties in connection with the invasion of Ukraine. 1. Short title This Act may be cited as the Russian War Crimes in Ukraine Tax Act 2. Taxation of income on frozen assets of Russia and Belarus (a) In general Subpart D of part II of subchapter N of chapter 1 892A. Taxation of income on frozen assets of Russia and Belarus (a) In general Notwithstanding sections 892 and 895 (or any other provision of law), there is hereby imposed for each taxable year on the disqualified income of any specified foreign government a tax equal to 100 percent thereof. (b) Withholding (1) In general Notwithstanding section 203 of the International Emergency Economic Powers Act (or any other provision of law), any person having control, receipt, custody, disposal, or payment of disqualified income with respect to which tax is imposed under subsection (a) shall deduct and withhold from such income a tax equal to 100 percent thereof. (2) Application of certain rules For purposes of subchapter B of chapter 3, section 33, and such other provisions as the Secretary may provide, paragraph (1) shall be treated as part of subchapter A of chapter 3. (c) Disqualified income For purposes of this section, the term disqualified income (d) Specified foreign government For purposes of this section, the term specified foreign government . (b) Clerical amendment The table of sections for subpart D of part II of subchapter N of chapter 1 of such Code is amended by inserting after the item relating to section 892 the following new item: Sec. 892A. Taxation of income on frozen assets of Russia and Belarus. . (c) Override of treaty obligations Notwithstanding any other provision of law, this section (and the amendments made by this section) shall apply without regard to any treaty obligation of the United States. (d) Effective date The amendments made by this section shall apply to interest and dividends received after the date of the enactment of this Act. 3. Establishment of Ukraine Reconstruction Trust Fund (a) In general Subchapter A of chapter 98 9512. Ukraine Reconstruction Trust Fund (a) Creation of trust fund There is established in the Treasury of the United States a trust fund to be known as the Ukraine Reconstruction Trust Fund (b) Transfers to trust fund There are hereby appropriated to the Ukraine Reconstruction Trust Fund amounts equivalent to the net revenues received in the Treasury from the taxes imposed under section 892A. (c) Expenditures from trust fund Amounts in the Ukraine Reconstruction Trust Fund shall be available, as provided in appropriations Acts, only to the Secretary of State for purposes of— (1) reconstruction and rebuilding efforts in Ukraine, (2) humanitarian assistance to the people of Ukraine, (3) fostering long-term economic growth and private sector development in Ukraine, and (4) bolstering transparent and accountable governance of the Ukrainian economy. (d) Trust fund not interest-Bearing Section 9602(b) shall not apply to the Ukraine Reconstruction Trust Fund. (e) Requirements under Foreign Assistance Act of 1961 Any assistance made available from amounts in the Ukraine Reconstruction Trust Fund shall be subject to all applicable requirements for the provision of such assistance for the same or similar purpose authorized by the Foreign Assistance Act of 1961 ( 22 U.S.C. 2151 et seq. . (b) Clerical amendment The table of sections for subchapter A of chapter 98 of such Code is amended by adding at the end the following new item: Sec. 9512. Ukraine Reconstruction Trust Fund. . (c) Report (1) In general Not later than 1 year after the date of the enactment of this Act, and annually thereafter for 3 years, the Secretary of State shall submit to the appropriate congressional committees a report detailing the use of any funds made available from the Ukrainian Reconstruction Trust Fund. (2) Appropriate congressional committees In this subsection, the term appropriate congressional committees (A) the Committee on Foreign Affairs, the Committee on Ways and Means, and the Committee on Appropriations of the House of Representatives; and (B) the Committee on Foreign Relations, the Committee on Finance, and the Committee on Appropriations of the Senate. 4. Diplomatic Assistance Authorization (a) Findings Congress makes the following findings: (1) Since February 24, 2022, Russia has been engaged an illegal, unjustifiable, and unprovoked war against Ukraine. (2) On November 14, 2022, the United Nations adopted a resolution recognizing that Russia must bear the international legal consequences for its violations of international law and Ukrainian sovereignty. (3) On December 23, 2022, Congress passed H.R. 2617, the Consolidated Appropriations Act 2023, which was signed by the President of the United States on December 29, 2022, and authorized the United States Government to transfer the illegally begotten assets of Russian oligarchs to Ukraine. (4) In October 2023, nearly $300,000,000,000 of Russian sovereign assets are frozen in countries around the world but less than 2 percent of those funds are in held in the United States. (5) The transfer of a 3 percent capital gain on the Russian sovereign assets frozen around the world would exceed a transfer of 100 percent of all of the Russian sovereign assets currently within the United States. (b) Statement of policy It is the policy of the United States that: (1) Any interest or return on Russian sovereign assets frozen by allies and partners around the world should be transferred to Ukraine. (2) The United States should make it a diplomatic priority to encourage allies and partners in Europe, Asia, and around the world to transfer any return on Russian sovereign assets to Ukraine. (c) Authorization of appropriations There is authorized to be appropriated $25,000,000 for the United States Special Representative for Ukraine’s Economic Recovery to advance the policies set forth in subsection (b). 5. Support at the United Nations (a) In general The Secretary of State shall direct the United States Permanent Representative to the United Nations to use the voice, vote, and influence of the United States to encourage other countries to develop mechanisms to transfer any capital gains on Russian sovereign assets to Ukraine. (b) Report Not later than one year after the date of the enactment of this Act, the Secretary of State shall submit a report to the Committee on Foreign Affairs of the House of Representatives and the Committee on Foreign Relations of the Senate a report detailing efforts and actions of the Permanent Representative as directed by subsection (a).

Summary: Russian War Crimes in Ukraine Tax Act This bill imposes a 100% excise tax on certain assets of Russia and Belarus that have been frozen in connection with the invasion of Ukraine. The bill establishes the Ukraine Reconstruction Trust Fund to hold tax revenues generated by this bill. Such revenues shall be used for the benefit of Ukraine, including reconstruction and rebuilding efforts, humanitarian assistance, and the fostering of long-term economic growth. The Department of State must direct the U.S. Permanent Representative to the United Nations to use U.S. influence to encourage the transfer of capital gains on Russian sovereign assets to Ukraine.