House Financial Services Committee Considers Legislation on Russian Sanctions

The House Financial Services Committee considered bills related to Russian sanctions and testimony by Treasury Secretary Janet L. Yellen on the current state of the international financial system.

In the Majority Memorandum, staff reviewed proposed legislation on (i) enforcement of sanctions and support for Ukraine, (ii) the impact of climate change on financial institutions and (iii) allocation of Special Drawing Rights ("SDRs") to poor and developing countries.

The Committee considered the following bills:

• H.R. 6891, the "Isolate Russian Government Officials Act of 2022," which seeks to exclude Russian government officials from participating in any international financial organization or committee;
• H.R. 6979, the "Stop Onerous Surcharges Act," which encourages the International Monetary Fund ("IMF") to review its surcharge policies and suspend collection of surcharge payments while in review;
• H.R. 6894, the "No Energy Revenues for Russian Hostilities Act," limiting the ability of financial institutions to engage in Russian-related energy transactions;
• H.R. 6899, the "Russia and Belarus SDR Exchange Prohibition Act of 2022," disallowing the right to engage in any transaction involving SDRs held by the Russian Federation or Belarus;
• H.R. 6900, the "Russian Sovereign Debt Prohibition Act of 2022," prohibiting financial institutions from participating in the secondary market for certain Russian bonds;
• H.R. 7066, the "Russia and Belarus Financial Sanctions Act of 2022," requiring persons owned or controlled by U.S. financial institutions to comply with all prohibitions, limitations or sanctions enacted against the Russian Federation or Belarus;
• H.R. 7081, the "Ukraine Comprehensive Debt Repayment Relief Act of 2022," suspending payment of outstanding debt to any U.S. financial institution owed by Ukraine and pursuing comprehensive debt relief, providing concessional financial assistance to Ukraine and support Ukrainian refugees;
• H.R. 7080, the "Nowhere to Hide Oligarchs’ Assets Act," expanding the scope of the original bill to also include foreign non-financial trade or business transactions;
• H.R. 7128, the "Special Measures to Fight Modern Threats Act," allowing the Secretary of the Treasury to implement prohibitions or limitations on the transmission of funds to certain accounts if there is concern of potential for money laundering;
• H.R. ____, allowing U.S. executive directors at the multilateral development banks to vote against any project that provides a public subsidy to a private firm unless certain conditions are met;
• H.R. ____, the "OFAC Exchange Act," establishing an OFAC-sanctioned Exchange to facilitate information sharing among law enforcement, national security agencies, financial institutions and OFAC;
• H.R. ____, the "Financial Intermediary Transparency and Accountability Act," requiring all new and existing financial intermediary clients to publicly disclose environmental and social risk assessment and mitigation plans;
• H.R. ____, the "Enhancing Equity and Transparency in IMF Lending Act," mandating the use of poverty and distributional impact assessments on all International Monetary Fund loan programs;
• H.R. ____, the "No More American Capital For Russia and Belarus Act of 2022," prohibiting certain investments in Russia- and Belarus-related securities;
• H.R. ____, the "Delist Russia and Belarus from U.S. Exchanges Act of 2022," prohibiting U.S. exchanges from listing Russia- and Belarus-related securities;
• H.R. ____, requiring public reporting for any project in which the U.S. votes in support of, or abstains from voting on, under Treasury's "Guidance on Fossil Fuel Energy at the Multilateral Development Banks."

Ms. Yellen, testifying in her capacity as Chair of the National Advisory Council on International Monetary and Financial Policies, addressed the Treasury Department's oversight of international financial institutions ("IFIs") and their support for Ukraine. She highlighted the role IFIs are playing with respect to the "spillover" effects of the war on food insecurity, energy security and debt sustainability. She noted that the Biden Administration is seeking to provide additional funding for IMF lending facilities for emergency relief to the poorest countries and for a new "IMF Resilience and Sustainability Trust to "provide targeted financing alongside IMF programs to support countries’ effort to strengthen energy security and pandemic preparedness."