House Republicans unveil bill package to freeze out Russia from global monetary system

A package of bills introduced by Republicans on the U.S. House Financial Services Committee aims to further isolate Putin’s regime from the international financial system as payback for Russia’s invasion of Ukraine.

U.S. Reps. Ann Wagner (R-MO), Andy Barr (R-KY), Bill Huizenga (R-MI), and French Hill (R-AR) each sponsored a bill on March 2.

Rep. Wagner introduced the Isolate Russian Government Officials Act of 2022, H.R. 6891, to exclude government officials of the Russian Federation from certain international meetings, such as attendance at the World Bank-IMF Spring and Annual Meetings, G-20 proceedings, Financial Action Task Force plenaries, and Annual General Meetings of the Bank for International Settlements.

“Vladimir Putin and his cronies have breached the territorial sovereignty of Ukraine and declared war on an innocent people,” said Rep. Wagner, ranking member of the House Financial Services Subcommittee on Diversity and Inclusion. “These grievous violations will not stand, and Russian government officials must be completely and utterly isolated from the world stage during this unjust and unprovoked war.”

If enacted, H.R. 6891 would “ensure Russian officials are excluded from major financial and intergovernmental forums and further restrict Russia’s inclusion in international meetings,” Rep. Wagner said.

The U.S. Treasury Department and the Federal Reserve would implement the exclusions, which would expire five years after enactment or 30 days after the president reports to Congress that the Russian government has ceased its destabilizing activities in Ukraine, according to a bill summary provided by the congresswoman’s staff.

Rep. Barr introduced the No Energy Revenues for Russian Hostilities Act of 2022, H.R. 6894, to prohibit U.S. financial institutions from engaging in transactions related to Russian energy sales. The bill has 46 GOP cosponsors.

“It’s time to strike a blow to the heart of the Russian economy and impose a real cost on its prized energy sector as long as the brutal war in Ukraine continues,” said Rep. Barr, ranking member on the House Financial Services Subcommittee on National Security, International Development, and Monetary Policy. 

Rep. Barr also called on President Joe Biden “to unleash American energy producers, who stand ready to flood the world with U.S. oil and natural gas, reducing energy costs at home for Americans and decreasing European dependence on Russian energy abroad.”

Rep. Hill, ranking member on the House Financial Services Subcommittee on Housing, Community Development, and Insurance, introduced the Russia and Belarus Special Drawing Rights (SDR) Exchange Prohibition Act of 2022, H.R. 6899, to prohibit the U.S. Treasury Secretary from engaging in transactions involving the exchange of SDRs issued by the International Monetary Fund (IMF) that are held by the Russian Federation or Belarus, according to the text of the bill. 

SDRs allow countries to claim dollars, euros and other major currencies to use with no strings attached, according to information provided by Rep. Hill’s office, which said that the amount an IMF country gets from an SDR allocation is largely based on a country’s position in the world economy, meaning most of the money goes to wealthy countries.

“I have been warning about the dangers of the IMF’s mistaken policy on Special Drawing Rights for more than three years, and I fear the worst-case scenario may come true: that Russia turns to Beijing to exchange its SDRs to finance their attempted invasion of Ukraine,” said Rep. Hill. “That is why I am introducing the Russia and Belarus SDR Exchange Prohibition Act, which makes it absolutely clear that the United States is to play no part in making IMF funds available to Russia or Belarus.”

Rep. Hill said Democrats are pushing for an additional SDR allocation of up to $2 trillion, which would send around $60 billion to the Kremlin and billions more to American adversaries like China, Iran, Belarus, and Syria. “This would be a catastrophic mistake,” he said. 

Rep. Huizenga, ranking member of the House Financial Services Subcommittee on Investor Protection, Entrepreneurship, and Capital Markets, introduced the Russian Sovereign Debt Prohibition Act of 2022, H.R. 6900, which would require the Treasury Secretary to prohibit U.S. financial institutions from participating in the secondary market for certain Russian bonds. 

Rep. Huizenga said that H.R. 6900 would continue to place tighter restrictions on Russian debt and Russian banks by cutting off “another avenue for Vladimir Putin to finance his invasion of Ukraine.”

“The United States must continue to lead efforts to sanction Russia and I am proud to add this legislation to the arsenal of financial tools intended to do just that,” he said.