President Joe Biden on Oct. 6 signed into law a bipartisan bill offered by U.S. Rep. French Hill (R-AR) that prohibits the U.S. Treasury Department from engaging in any transaction involving the exchange of Special Drawing Rights (SDRs) held by Russia or Belarus. The new law also requires the Treasury to oppose financial assistance to Russia or Belarus.
The SDR is an international reserve asset maintained by the International Monetary Fund (IMF) based on contributions from IMF member countries. SDRs may be exchanged between member countries and may also be exchanged for currencies.
“My bill — now a law — will close a loophole to get around Western sanctions by freezing Russia and Belarus out of future IMF financing and preventing them from using SDRs to fund their nefarious activities, including their illegal war in Ukraine,” Rep. Hill said.
“Importantly, though, this law requires action on the part of the administration to affirmatively and actively push our IMF partner nations to do the same — a major change in U.S. policy on SDRs,” added the congressman.
The Russia and Belarus SDR Exchange Prohibition Act of 2022, H.R. 6899, which Rep. Hill sponsored on March 2, also directs U.S. representatives to each international financial institution to oppose providing financial assistance to Russia or Belarus except to address the basic human needs of their civilian populations, according to the congressional record bill summary. The bill was cosponsored by U.S. Rep. Brad Sherman (D-CA).
“For over two years, I have warned my Democrat colleagues and administration officials about the flaws of the IMF’s SDR policy — they’re not targeted, there’s no accountability, and SDRs provide free money to countries that support genocide, terrorism, and illegally invade sovereign nations,” said Rep. Hill.
The congressman thanked U.S. Sens. Rick Scott (R-FL) and Joe Manchin (D-WV) for introducing the same-named companion bill, S. 4079, in April, as well as President Biden for signing the bill into law.