WASHINGTON — The House Financial Services Committee advanced a series of bills with bipartisan support on Thursday that would expand the scope of the U.S. sanctions regime against the Russian Federation, though one bill to expand the Treasury Department's legal authority to crack down on sanctioned individuals was fiercely opposed by Republicans.
One key bill, titled Russia and Belarus Financial Sanctions Act and
“We’ve imposed very significant sanctions through our financial system, but what is not well known is that the sanctions affect only U.S. corporations,” Sherman said during the hearing. “They do not affect the foreign subsidiaries owned by U.S. corporations. This bill will solve that problem.”
The bill, along with three others, passed the Democrat-led committee with no opposition from Republicans and is expected to head to the House floor. It remains unclear if or when the Senate will take up the legislation.
In total, the committee’s markup hearing on Thursday reviewed five financial policy bills aimed at countering Russian aggression in Europe, and
“I think this bipartisan markup will send a message that will be heard 10,000 miles away in Moscow,” Sherman said.
One bill, titled the Isolate Russian Government Officials Act, is an attempt to ban Russian officials from participating in prominent international finance bodies, including the Bank for International Settlements and Financial Stability Board. Another bill with bipartisan support would free Ukraine from its outstanding debt obligations for seven years in order to help finance the country’s defenses.
But the fifth bill, introduced by Chair Maxine Waters, D-Calif., produced significant resistance from Republicans on the committee. Named the
“The loopholes that Putin and oligarchs like
The bill, according to Waters, would “allow Fincen to better understand how Russian oligarchs, their family members and the entities they own are working to launder money and evade sanctions."
But Republicans, along with one key Democrat on the committee, voted to stop the bill from moving through the committee. They ultimately fell short, with 26 members voting in favor of the bill’s advancement and 23 voting against it.
Ranking member Patrick McHenry, R-N.C., said that the new authorities contained in Waters's bill would extend far beyond the hunt for Russian assets and could allow the U.S. government to seriously breach Americans’ civil liberties at home in the future.
“Let’s be clear: This bill isn’t actually about chasing Russian money laundering,” McHenry said. “It is about expanding the powers of Fincen domestically in a substantial way.” McHenry also complained that Fincen had shown little accountability since Congress voted in late 2020 to grant the agency new powers under the Corporate Transparency Act — a law intended to crack down on the use of anonymous shell companies laundering illicit funds by requiring firms to report their beneficial ownership.
“As a part of the requirement of [the Corporate Transparency Act], Fincen is required under law to testify before this committee. They have not done so,” McHenry said. “We've given them new authorities, but we've not had them come before us to explain how they're using it and how they're implementing that law.”
Rep. Jim Himes, D-Conn., who serves as chair of the House Financial Services subcommittee on national security, international development and monetary policy, pushed back on McHenry’s claim that Fincen had shrugged off accountability, saying on Thursday that the agency had been “enormously cooperative, particularly in the last three weeks.”
But Himes ultimately joined Republicans on the vote for Waters’s bill, voting no on its advancement to the House floor.
After the vote, Fincen defended its efforts to abide by the Corporate Transparency Act. It has written implementing rules as well as cooperated with law enforcement and national security officials to combat cyber attackers, drug traffickers and financial criminals, the agency said in a statement.
"Fincen stands ready to work with Congress in its exercise of its important oversight functions, including testifying on" the transparency act and related anti-money-laundering legislation, the statement said.
Rep. Warren Davidson, R-Ohio, went even further than McHenry, saying the Waters bill was “essentially the financial version of the Patriot Act, which also had a great title and a great ostensible purpose, but we’ve seen how it’s been abused.”
“We’re spying on American citizens — we’re essentially building a police state that so far has mostly operated very benignly,” Davidson said.
As the debate unfolded during the markup hearing, Waters asked her Republican colleagues whether there were changes that could be made to her bill that would earn their support, such as a mandatory sunset provision or language targeted more specifically at Russian nationals.
McHenry said that his side’s opposition would not be “easily resolved through a few language changes."
