[Senate Hearing 117-345]
[From the U.S. Government Publishing Office]




                                                        S. Hrg. 117-345


INTERNATIONAL POLICY UPDATE: THE TREASURY DEPARTMENT'S SANCTIONS POLICY 
                        REVIEW AND OTHER ISSUES

=======================================================================

                                HEARING

                               before the

                              COMMITTEE ON
                   BANKING,HOUSING,AND URBAN AFFAIRS
                          UNITED STATES SENATE

                    ONE HUNDRED SEVENTEENTH CONGRESS

                             FIRST SESSION

                                   ON

                 EXAMINING INTERNATIONAL POLICY ISSUES

                               __________

                            OCTOBER 19, 2021

                               __________

  Printed for the use of the Committee on Banking, Housing, and Urban 
                                Affairs



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                Available at: https: //www.govinfo.gov /





                                 ______
                                 

                 U.S. GOVERNMENT PUBLISHING OFFICE

48-365 PDF                WASHINGTON : 2022













            COMMITTEE ON BANKING, HOUSING, AND URBAN AFFAIRS

                     SHERROD BROWN, Ohio, Chairman

JACK REED, Rhode Island              PATRICK J. TOOMEY, Pennsylvania
ROBERT MENENDEZ, New Jersey          RICHARD C. SHELBY, Alabama
JON TESTER, Montana                  MIKE CRAPO, Idaho
MARK R. WARNER, Virginia             TIM SCOTT, South Carolina
ELIZABETH WARREN, Massachusetts      MIKE ROUNDS, South Dakota
CHRIS VAN HOLLEN, Maryland           THOM TILLIS, North Carolina
CATHERINE CORTEZ MASTO, Nevada       JOHN KENNEDY, Louisiana
TINA SMITH, Minnesota                BILL HAGERTY, Tennessee
KYRSTEN SINEMA, Arizona              CYNTHIA LUMMIS, Wyoming
JON OSSOFF, Georgia                  JERRY MORAN, Kansas
RAPHAEL WARNOCK, Georgia             KEVIN CRAMER, North Dakota
                                     STEVE DAINES, Montana

                     Laura Swanson, Staff Director

                 Brad Grantz, Republican Staff Director

                       Elisha Tuku, Chief Counsel

                    Colin McGinnis, Policy Director

                 Dan Sullivan, Republican Chief Counsel

          Dylan Clement, Republican Professional Staff Member

                      Cameron Ricker, Chief Clerk

                      Shelvin Simmons, IT Director

                    Charles J. Moffat, Hearing Clerk

                                  (ii)







                            C O N T E N T S

                              ----------                              

                       TUESDAY, OCTOBER 19, 2021

                                                                   Page

Opening statement of Chairman Brown..............................     1
        Prepared statement.......................................    34

Opening statements, comments, or prepared statements of:
    Senator Toomey...............................................     3
        Prepared statement.......................................    35

                                WITNESS

Wally Adeyemo, Deputy Secretary, Department of the Treasury......     5
    Prepared statement...........................................    36
    Responses to written questions of:
        Chairman Brown...........................................    38
        Senator Toomey...........................................    41
        Senator Cortez Masto.....................................    52
        Senator Sinema...........................................    56
        Senator Rounds...........................................    59
        Senator Tillis...........................................    61
        Senator Hagerty..........................................    62

              Additional Material Supplied for the Record

U.S. Department of the Treasury Sanctions Review Release.........    65
The Treasury 2021 Sanctions Review...............................    67

                                 (iii)






 
INTERNATIONAL POLICY UPDATE: THE TREASURY DEPARTMENT'S SANCTIONS POLICY 
                        REVIEW AND OTHER ISSUES

                              ----------                              


                       TUESDAY, OCTOBER 19, 2021

                                       U.S. Senate,
          Committee on Banking, Housing, and Urban Affairs,
                                                    Washington, DC.
    The Committee met via Webex and in room 538, Dirksen Senate 
Office Building, Hon. Sherrod Brown, Chairman of the Committee, 
presiding.

          OPENING STATEMENT OF CHAIRMAN SHERROD BROWN

    Chairman Brown. The Senate Committee on Banking, Housing, 
and Urban Affairs will come to order. This hearing is in a 
hybrid format. Members have the option to appear both in person 
or virtually. Our sole witness is in person. Mr. Adeyemo, 
welcome.
    If there is a technology issue we will move on to the next 
person. Our speaking order will be as usual, that is by 
seniority of the Members who have checked in, alternating 
Democrat and Republican.
    Today we welcome Deputy Secretary Wally Adeyemo to this 
Committee for an update on international policy issues. 
Sanctions policy is an area where we have done important, 
bipartisan work on this Committee. I thank Senator Toomey and 
especially Senator Crapo, who was Chair when I was Ranking, up 
until this year. We were able to make important progress in 
holding countries like Russia and North Korea accountable. 
Senator Toomey and I worked together to pass tough new fentanyl 
sanctions, to help stem the flow of illegal opioids from China 
and Mexico that have taken such a toll. Another heartbreaking 
story on public radio today about what has happened in far too 
many families in this country.
    I am confident that we will be able to build on the 
progress this year, in conjunction with President Biden and 
Deputy Secretary Adeyemo.
    Two weeks ago in this Committee, we explored the economic 
and humanitarian crisis in Afghanistan, as Senator Toomey asked 
us to, the role of sanctions, and how we can get more aid to 
the Afghan people, without resources falling into the hands of 
the Taliban.
    Last week, a broad coalition of countries agreed to 
substantially increase aid to Afghanistan. We continue to work 
with our allies to ensure that aid can be delivered effectively 
to the people there, despite sanctions against the Taliban.
    Today, we will focus primarily on the findings and 
recommendations of the months-long sanctions policy review that 
Secretary Yellen, Deputy Secretary Adeyemo, and others directed 
the Treasury Department to undertake.
    The Department consulted with agencies across the 
Government--State, Commerce, the intelligence community, and 
others--as well as an array of private sector actors, including 
banks, businesses, nonprofits, international NGO's, and 
sanctions experts.
    That comprehensive review examined important questions of 
our current sanctions policy: Does the U.S. Government have the 
right sanctions tools? Are we using them effectively with our 
allies? Are we reassessing their application and adapting them 
as we go? Are we targeting the right people, the right 
entities, the right countries, in the right way, with the right 
sanctions? Ultimately, are we actually changing the behavior of 
targeted countries, entities, or people, where that is 
obviously our goal?
    I know that Treasury has recommendations on these and other 
questions.
    There are some guiding, bipartisan principles that this 
Committee has recognized for years regarding sanctions, and let 
me just briefly outline those. Number one, we should impose 
sanctions on a multilateral basis whenever possible. They are 
more effective, and they garner broader political and 
diplomatic support if we impose them in coordination with our 
allies.
    Number two, preserving and strengthening humanitarian 
exceptions and licensing are important to ensure that people do 
not suffer from shortages of food, medicine, and other 
necessities because of sanctions.
    Number three, for sanctions to be effective they must have 
clear targets, goals, and objectives. If we are trying to 
change countries' and other actors' behavior, they need to 
understand how, once they do better, they can free themselves 
from sanctions.
    Fourth, the U.S. must do a better job of regularly 
assessing the effectiveness of sanctions. We need to 
communicate those findings better to banks and other entities 
that are implementing sanctions policy.
    And last, the Executive branch must continue to support and 
empower the dedicated public servants across the Government 
charged with implementation and enforcement. As with any job, 
workers are our greatest assets, whether at Treasury, at State, 
on the Senate Banking, Housing, and Urban Affairs Committee or 
in the intelligence community in our Government. They must have 
the funding, the analytical tools, the technical expertise--
including in cryptocurrencies, as we have discussed--which need 
a much closer look. They need the technology and the time to do 
their jobs, particularly as we have increased the use of 
sanctions all around the world.
    Today's hearing will give Members a chance to survey other 
international policy issues within our jurisdiction, and pose 
any questions to the Deputy Secretary, which I am sure he is 
prepared to address.
    I thank Deputy Secretary Adeyemo for your work on these 
issues, and look forward to your testimony.
    Senator Toomey.

         OPENING STATEMENT OF SENATOR PATRICK J. TOOMEY

    Senator Toomey. Thank you, Mr. Chairman. Deputy Secretary 
Adeyemo, welcome back. Under President Biden, the Treasury 
Department has advanced a number of troubling international 
policies, some of which are clearly intended to circumvent the 
will of Congress.
    Let us take sanctions to start with. The Administration has 
offered sanctions relief to our adversaries in the unrealistic 
hope that they will make concessions inimical to their own 
interests and nature. Consider Iran, for instance. To entice 
Iran to reenter the flawed JCPOA, the Administration appears 
willing to lift sanctions on Iran. Then the Administration 
hopes Iran will commit to cease supporting terrorism and to 
curb its ballistic missile program.
    But let us be clear. Once sanctions are lifted, Iran will 
never limit its malign behavior. The Administration clearly 
intends to repeat the mistakes of the Obama administration and 
reenter a treaty with Iran, despite bipartisan opposition and 
without Senate approval.
    In addition, the Administration has repeatedly failed to 
comply with mandatory sanctions laws. Also, let us look at 
Iran. Since President Biden was elected, according to the 
International Energy Agency, Iran has doubled the amount of 
crude oil it is selling to China to 600,000 barrels each day 
this year. Even though these sales are illegal under sanctions 
laws, the Administration has refused to impose congressionally 
required sanctions on the Chinese buyers.
    Take the case of Russia. The Administration has also chosen 
to ignore a law requiring sanctions on Russia's Nord Stream 2 
pipeline. The pipeline's project manager has been using 
sanctioned Russian entities to construct and finance Nord 
Stream 2, meaning the manager's integral role in the pipeline 
is predicated on a massive sanctions evasion campaign.
    Congress passed the Countering America's Adversaries 
Through Sanctions Act, or CAATSA, to punish, among other 
things, this very type of conduct: sanctions evasion. Congress 
did this because sanctions evasion harms U.S. national security 
interests, and in this instance, it is increasing Putin's 
malign influence over Europe. But the Administration continues 
to violate this statute in order to give Putin a pass.
    Take the OECD tax agreement. As if all this were not 
enough, the Administration is trying to enact an international 
tax treaty that will harm U.S. competitiveness, and to do it 
without obtaining the necessary two-thirds approval of the 
Senate.
    You will recall the tax increase consists of two pillars. 
Pillar One is an unprecedented treaty change that would allow 
foreign countries to tax American companies based on the 
American companies' sales overseas. It is a tax revenue 
transfer from us to them. Unsurprisingly, this is the priority 
for other countries, who have long sought this tax transfer.
    Pillar Two is a 15 percent global minimum tax on 
multinationals' foreign income. Now this is the 
Administration's attempt to justify the huge tax increase it 
wants to impose on U.S. companies. Unsurprisingly, this is the 
Administration's priority since it is an integral part of 
dismantling the successful 2017 tax reforms.
    But by imploring other countries to implement a global 
minimum tax that will harm their own workers and businesses, 
the Administration has implicitly acknowledged that their 
proposed multinational tax increase will make U.S. workers and 
businesses less competitive, if other countries either do not 
implement a global minimum tax of their own or implement a 
significantly lower rate than what the Administration is 
proposing.
    But here is a problem. There is a very real possibility 
that other countries will not implement a global minimum tax. 
They have only reluctantly agreed to that global minimum tax as 
a condition, I mean, in return for getting Pillar One, the U.S. 
tax revenue transferred to them. But as I say, implementing 
Pillar One requires two-thirds approval in the Senate, and I do 
not think that is going to happen.
    So the Administration is either going to impose its global 
minimum tax increase on American companies anyway, without the 
countries we compete with having enacted a corresponding tax 
increase, or they are going to violate the Constitution by 
modifying our existing tax treaties without obtaining the two-
thirds consent of the Senate.
    Let us turn quickly to the FSOC Climate Risk Report. This 
is the latest troubling international policy proposal from the 
Administration. We expect this report to come out soon. It is 
likely to claim that global warming poses a systemic risk to 
the financial system.
    Now I acknowledge that global warming is real. However, it 
does not follow from this that there is a new systemic risk to 
the financial system. We have had severe weather events since 
the dawn of time. And as the economist, John Cochrane, has 
explained to this Committee, major weather events, and I quote, 
``have never come close to causing systemic financial crises,'' 
end quote, and there is no scientifically validated possibility 
to change this in the near future.
    Our Democratic colleagues should acknowledge this reality 
and offer their proposals on climate change through the 
legislative process, which they are doing, including calling 
for a ``carbon'' tax, in which this very dangerous tax-and-
spend measure they are contemplating will make energy prices 
higher.
    But that legislative approach is not enough for our 
Democratic colleagues. They also want to use unaccountable 
financial regulators to really misuse their power and 
essentially cutoff the supply of capital to fossil fuel 
companies.
    Well, all across America we are already seeing what happens 
when the regulatory environment discourages the development of 
necessary energy sources. Energy prices spike. This dynamic 
will only get much worse if financial regulators are pressured 
to starve the energy sector of the capital it needs to provide 
Americans the energy they need.
    Deputy Secretary Adeyemo, I look forward to discussing 
these issues with you today.
    Chairman Brown. Thank you, Senator Toomey.
    Wally Adeyemo was sworn in as Deputy Secretary of the 
Treasury in March of 2021. He has spent the majority of his 
career in public service convening Governments and companies 
and organizations to move toward achieving common goals. He 
came to the Treasury Department from the Obama Foundation, 
where he served as president beginning August 2019. He served 
as a senior advisor before that at the Center for Strategic and 
International Studies and at BlackRock. He held a number of 
roles in public service before this. He holds a BA from the 
University of California at Berkeley and a JD from Yale Law 
School.
    Deputy Secretary Adeyemo, it is good to have you here. 
Welcome. Please begin.

STATEMENT OF WALLY ADEYEMO, DEPUTY SECRETARY, DEPARTMENT OF THE 
                            TREASURY

    Mr. Adeyemo. Chairman Brown, Ranking Member Toomey, and 
Members of the Committee, thank you for giving me the 
opportunity to speak to you today about the National Advisory 
Council on International Monetary and Financial Policies report 
to Congress, the Treasury Department's priorities, and our 
outlook for the global financial system.
    As you know, the international financial institutions form 
the core of the international financial architecture that is 
consistent with our economic interest. It is no accident that 
the U.S. economy is the largest in the world, that our 
financial markets are the deepest and most liquid, and that 
dollar is the world's reserve currency. Our economic success is 
the result of the policy choices we made coming out of World 
War II, alongside the hard work and determination of the 
American people.
    America's interest in a strong, stable, and rules-based 
economic order is also deeply entwined with our foreign policy 
and national security interest. Our economic objectives cannot 
succeed if the international financial system facilitates the 
illicit flow of funds to oppressive regimes, terrorist groups, 
cybercriminals, and other malign actors.
    Bearing this in mind, Secretary Yellen requested a review 
of Treasury's use of financial and economic sanctions since the 
terrorist attacks of September 11, 2001. The review identified 
four primary challenges to the continued effectiveness of our 
sanctions regime: one, our adversaries' attempts to build 
payment systems allowed them to avoid the dollar-based 
financial system; two, technological changes like the growth of 
digital currencies; three, the need to permit the flow of 
legitimate humanitarian assistance and avoid collateral impact 
on nontarget populations; and finally, four, ensuring that 
sanctions are always deployed alongside other measures as part 
of an overarching national security strategy.
    I want to briefly describe to the Committee the five 
initiatives Treasury is advancing to respond to these 
challenges and modernize the use of sanctions.
    One, adopting a policy framework. Treasury will adopt the 
use of a structured policy framework in order to inform its 
recommendations on the use of sanctions. This framework will 
seek to ensure that sanctions support clear policy objectives 
within a broad strategy; reflect input from technical experts 
and other critical sources of information, including the 
intelligence community; incorporates multilateral cooperation 
and are easily understood, enforceable, and reversible. The 
framework will be a tool to improve the use of sanctions, not a 
means to prevent it.
    Two, improving access to humanitarian assistance. Treasury 
will work to expand sanctions exceptions, where appropriate, to 
support the flow of legitimate humanitarian assistance, 
incorporating lessons learned from the last 20 years. The 
Department is committed to consistently providing clear 
guidance in the context of all applicable sanctions regimes, 
including the continued flow of legitimate humanitarian aid to 
heavily sanctioned jurisdictions.
    Three, regular assessment of sanctions programs. Treasury 
plans to use the sanctions policy framework on a regular basis 
to review sanctions programs and authorities and make 
recommendations to augment, adapt, or wind down individuals' 
authorities, or to list or delist particular entities.
    Four, improve sanctions coordination and communication. The 
threat of sanctions alone, not even the imposition, remains a 
powerful tool of economic statecraft. In order to calibrate the 
use of this tool, Treasury needs to communicate and coordinate 
more effectively with stakeholders affected by the use of 
financial sanctions. This includes U.S. allies and partners, 
financial institutions, and other actors within the financial 
system, nonprofit organizations, and the media. We will do this 
by using existing forms where we meet with our allies and 
partners to coordinate and collaborate on sanctions as well as 
build a more formal mechanism for receiving feedback and advice 
and providing information to stakeholders.
    Five, we plan to modernize our operational capabilities. As 
the threats to our Nations change, sanctions must also adapt. 
Treasury must invest in changes to its workforce and technical 
capabilities to meet these evolving threats. This will involve 
streamlining current functions as well as making workforce and 
infrastructure investments to take on growing threats like 
ransomware and other cybercrime. This effort will require 
building on current processes in some areas and changes in 
others. Certain changes may be implemented in the near term 
while other will require further deliberation and analysis to 
determine the best path forward in collaboration with the State 
Department and other Executive branch partners. In many cases, 
support and advice from key partners like Congress will be 
critical.
    Members, sanctions are not only an important tool of the 
United States, they play an important role in maintaining the 
rules-based global economy, which has benefited the world for 
generations. I look forward to working with Members of this 
Committee to continue advancing U.S. international economic 
leadership abroad and creating opportunities for Americans at 
home. I am happy to take your questions.
    Chairman Brown. Thank you, Mr. Deputy Secretary. Your staff 
has put a lot of time and work into this. You have laid out 
general principles and recommendations. What are the most 
important and urgent findings and recommendations, and will any 
of them require congressional approval?
    Mr. Adeyemo. Thank you, Senator, and I want to thank you 
and your staff and the staff of this Committee for spending a 
great deal of time with those of us at Treasury, talking about 
the sanctions review. As you will see from the report and also 
from my testimony this morning, the findings we have largely 
align with the principles this Committee has outlined.
    The key for us is making sure that as we think about 
sanctions on a go-forward basis we are making the investments 
today to keep up with innovations, not only technology but 
innovations by our adversaries that are attempting to bypass 
our sanctions. This will require us to do more multilaterally, 
frankly by doing more multilaterally put ourselves in a place 
where when we decide to act unilaterally we have greater power 
in terms of our ability to effect change, the change of 
behavior, which is the ultimate goal of sanctions.
    We are going to need to work with Congress to advance 
things like creating the type of opportunities within the 
Executive branch to hire staff who understand issues like 
crypto going forward, so looking to Congress to help us with 
hiring authorities. The President's fiscal year 2022 budget 
includes additional resources which will allow us to build on 
the technological expertise that we need in the Treasury 
Department, and will also help us bring on the type of 
workforce we need to ensure that we are able to meet these 
challenges going forward.
    A great deal of the work that we need to do will need to 
happen with our Executive branch colleagues, but we look 
forward to also working with Congress to advance these 
important goals.
    Chairman Brown. Thank you. This review strikes me as 
especially important because the last time U.S. sanctions were 
reviewed comprehensively was 20 years ago, and it resulted in 
the enactment of a new law requiring exclusion of trade and 
agriculture and medicine and medical products from sanctions. 
Clearly we need to work harder to avoid collateral consequences 
in sanctions on humanitarian aid.
    So my question is this. Especially as the pandemic 
continues to put all of us at risk, as variants mutate around 
the globe, what specific new steps are you recommending that 
Treasury take to mitigate the harm to humanitarian aid efforts?
    Mr. Adeyemo. Senator, it is critical that especially in 
areas where sanctions are used, humanitarian assistance is able 
to continue to flow. We have learned a great deal from what we 
have done over the last 20 years. You will see that some of 
that has been applied to some of the sanctions programs that we 
have introduced recently. For example, the President's 
Executive order with regard to actions occurring in Ethiopia. 
When we issued that Executive order we also put out general 
licenses at the same time to assure that humanitarian 
assistance would continue to flow.
    One of the challenges that we have is that we often will 
announce sanctions programs and then wait to hear from 
humanitarian groups before we then issue guidance to provide 
them with the ability to continue to flow humanitarian 
assistance into these areas. Our goal now needs to be to ensure 
that we take the lessons that we have learned from the last 20 
years and ensure that humanitarian assistance can be provided 
alongside our sanctions programs in order to meet the needs of 
people who are suffering in these areas. Especially during this 
moment of COVID, ensuring that medicine and food can get to 
these affected people is not only consistent with our values 
but it will help us end the pandemic globally.
    Chairman Brown. A number of critics have argued that the 
sort of clumsy use or the overuse of sanctions, of unilateral 
sanctions by the U.S., especially during the Trump 
administration, played into the hands of our adversaries. How 
concerned are you about efforts by China and Russia and others 
to insulate themselves from U.S. sanctions, including by moving 
away from dollarized transactions, creating new financial 
messaging systems, or taking other similar steps? Do you view 
these efforts, if they were to persist and intensify, as posing 
a threat to the U.S. dollar as the world's reserve currency?
    Mr. Adeyemo. Senator, my view is that the U.S. dollar as 
the world's reserve currency will remain, for a number of 
reasons, including the fact that we have made the needed 
investments in America. Ultimately, people are going to want to 
invest in America and do business here because of the strength 
of our economy and the openness of our system and the certainty 
of our laws.
    But it is true that if we do not use sanctions 
appropriately it will drive not only our adversaries but a 
number of others to look for ways around the use of the dollar 
in their financial dealings. Our goal then needs to be to make 
sure that we do two things. One is that in using our sanctions 
we need to use a framework that is consistent with the 
principles, frankly, that this Committee has been outlining for 
a long time, but in addition to doing that we need to try and 
multilateralize our sanctions whenever possible. While it is 
hard to avoid being engaged in financial transactions that 
avoid the dollar, it is even harder to avoid financial 
transactions that avoid the dollar, the euro, the pound, and 
the yen. That is why it is critical that more often we try to 
do things multilaterally with our allies and partners going 
forward.
    Chairman Brown. Thank you. Senator Toomey.
    Senator Toomey. Thank you, Mr. Chairman. Deputy Secretary 
Adeyemo, I cannot help but note the irony of your discussing 
how and why it is so important that we preserve the ability to 
impellent a sanctions regime in the future when you and the 
Administration choose not to implement sanctions that statute 
currently requires.
    Let us take the case of Iranian oil sales to China. The 
Iran Freedom and Counter-Proliferation Act, IFCA, prohibits the 
purchase of Iranian oil. Yet according to the International 
Energy Agency satellite data, since January of this year China 
has been importing around 600,000 barrels of Iranian oil per 
day.
    And the Administration knows it. On September 28, Reuters 
reported that, and I quote, ``A senior U.S. official said, `We 
are aware of the purchases that Chinese companies are making of 
Iranian oil,' '' end quote.
    Now I am sure you acknowledge that IFCA requires sanctions 
on purchase of Iranian oil, right?
    Mr. Adeyemo. Senator, the law does require that.
    Senator Toomey. OK. And you acknowledge that Chinese 
companies are buying Iranian oil in very significant 
quantities, right?
    Mr. Adeyemo. Senator, I am aware that a number of people 
are attempting to buy Iranian oil, and our goal is to make sure 
that----
    Senator Toomey. OK. But we are not talking about attempts. 
It is a factual matter that Chinese entities are routinely, 
daily, buying hundreds of thousands of barrels of Iranian oil, 
in direct violation of our sanctions regime, right?
    Mr. Adeyemo. Senator, we continue to monitor purchases of 
Iranian oil, and we look forward to using----
    Senator Toomey. OK. So you are making my point. I am going 
to submit a written question, and for the sake of time I would 
appreciate a written answer as to why it is that you believe 
that the mandatory nature of this sanctions statute is somehow 
optional, because it is actually not, and we all know that this 
is going on.
    Let us move on to Nord Stream 2. So since early July, 
several other Senators and I have been very concerned that the 
Administration is again violating the statute by not 
sanctioning the project manager of the Nord Stream 2 pipeline, 
that is Nord Stream 2 AG, under Section 228 of CAATSA. And here 
is the problem. Nord Stream 2 pipeline project, the whole 
project is riddled with sanctioned Russian entities, ranging 
from the project owner to various contractors, vessels, certain 
employees, they are all subject to sanctions, already 
established sanctions.
    OK. So Gazprom illustrates why the Treasury Department is 
violating this law. The Obama administration imposed sectoral 
sanctions, or SSI sanctions, on Gazprom due to Russia's efforts 
to destabilize Eastern Ukraine. Now I am sure you do not 
dispute that Gazprom is currently subject to SSI sanctions, 
right?
    Mr. Adeyemo. Yes, Senator.
    Senator Toomey. OK. So CAATSA Section 228 goes after 
entities facilitating sanctions evasions on behalf of, and I 
quote, ``any person subject to sanctions imposed by the United 
States with respect to the Russian Federation,'' end quote. On 
OFAC, that is to say the Treasury's own website, the answer to 
FAQ Number 546 explicitly makes it clear that persons subject--
I am quoting now--``Persons subject to sanctions imposed by the 
United States with respect to the Russian Federation includes 
persons listed on the SDN list or the SSI list,'' end quote.
    So we have established that Gazprom is a party sanctioned 
by the U.S. Government for the purpose of CAATSA 228, so you 
could ask, OK, so what does that have to do with Nord Stream 2 
AG? Well, on its own website, Nord Stream 2 AG describes itself 
as a project company established by Gazprom for the purpose of 
planning construction and subsequent operation of Nord Stream 2 
pipeline. And again, I am sure you agree that Gazprom did, in 
fact, set up Nord Stream 2 AG to construct and operate the 
pipeline, right?
    Mr. Adeyemo. Senator, we have talked about this issue 
several times, and I agree with you that we need to do 
everything we can to implement CAATSA. As I have said to you 
previously, we are currently working with intelligence 
community to----
    Senator Toomey. I understand. But let me just finish this, 
because this is important and we are going to run out of time.
    So we also know that Nord Stream 2 AG has facilitated 
sanctions evasions for Gazprom. Now you might ask, well, how do 
we know that? Well, we know this because the State Department 
has told us this, right? In a May 2021 report, the State 
Department said that Nord Stream 2 AG has, and I quote, 
``knowingly facilitated deceptive or structured transactions to 
provide vessels for the construction of Nord Stream 2 
pipeline.'' And just adding on, and I am sure you will confirm 
again, that it was, in fact, Treasury lawyers signed off on the 
evidentiary package that the State Department used for this 
determination.
    So you have acknowledged that Gazprom is sanctions. You 
acknowledged that Gazprom set up Nord Stream 2 AG. I believe 
you acknowledged that Nord Stream 2 AG has facilitated 
sanctions evasions, and certainly your lawyers did when the 
State Department concluded that Nord Stream 2 AG has 
facilitated sanctions evasions to get vessels involved in this.
    Do you acknowledge that Nord Stream 2 AG did all this on 
behalf of Gazprom?
    Mr. Adeyemo. Senator, as I have said, we are committed to 
working with you and this Committee to hold Gazprom responsible 
for its activities that violate our sanctions.
    Senator Toomey. But you are not answering a direct question 
here. Do you knowledge that Nord Stream 2 AG has engaged in the 
activity that is laid out by the State Department, on behalf of 
Gazprom?
    Mr. Adeyemo. Senator, we support the State Department's 
report. We worked with them on that report. Their report was 
based on a separate authority than the one that we are talking 
about today, which is CAATSA. With regard to CAATSA, we are 
committed to making sure that we work with----
    Senator Toomey. Let me just close by saying, look, it is 
very clear what is going on here. Gazprom created Nord Stream 2 
to evade sanctions. That was the entire purpose. Everything 
around this picture are the sanctioned entities, and they 
needed Nord Stream 2, they needed an unsanctioned entity in 
order to bypass the sanctions. That is exactly what we passed 
CAATSA for, on a bipartisan basis, and it is completely 
unacceptable that it is not being implemented.
    Chairman Brown. Thank you, Senator Toomey. Senator Tester 
is recognized for 5 minutes, from Montana.
    Senator Tester. Yeah. Thank you, Mr. Chairman. Look, your 
testimony highlighted the important work of countering China's 
unfair trade practices, and it is true they are the pacing 
threat to us and the world today. It is a key focus of mine in 
the Defense Subcommittee, which I chair, and it is why I pushed 
so hard to get the Bipartisan Infrastructure Bill across the 
finish line in the Senate, and will continue to push to get 
across the finish line in the House.
    But from your perspective, in your role as Deputy 
Secretary, what is the most effective way to address what China 
is doing with particularly currency manipulation?
    Mr. Adeyemo. Senator, thank you for the question and thank 
you for your work on those important issues. My view is that 
the most important thing that we can do with regard to 
competing with China is making the investments in the United 
States that you have taken a leadership role on, like the 
Infrastructure Bill that has passed the Senate and is currently 
in the House.
    In terms of the issue of currency manipulation, the 
President and Secretary have been very clear that we will not 
allow any country to unfairly use its currency to push for more 
exports. As you know, on a semiannual basis the Treasury 
Department puts out a report on foreign exchange intervention 
that highlights countries that violate the international rules 
in this area. When it comes to China, we are committed to 
holding them accountable for all of their unfair actions, both 
unilaterally, in the United States, but also working 
multilaterally with our allies and our partners, because know 
that fundamentally the actions that China takes do not only 
hurt American consumers and American workers but they hurt the 
consumers and workers around the world.
    Senator Tester. So let me ask you this. Is there anything 
that you need from Congress, specifically this Committee, any 
additional authorities?
    Mr. Adeyemo. Senator, at the moment I think that Congress 
providing us with the authorities to pull together the foreign 
exchange report is what we need. We are working actively with 
the USTR and other agencies within the Government to use our 
tools to hold China and others accountable, and we look forward 
to continuing to consult with you if there are additional 
authorities that we need.
    Senator Tester. OK. From the standpoint of cryptocurrency, 
has that changed how the Treasury Department deals with 
sanctions?
    Mr. Adeyemo. Senator, as we highlighted in the sanctions 
review, cryptocurrencies has required us to look at ways that 
we can try to deal with potential sanctions evasions, and we 
have highlighted this by taking certain actions with regard to 
cryptoactors who are using this means of payment for things 
like ransomware. It will require us to also invest more in 
different parts of our workforce going forward and improving 
our technology infrastructure.
    Senator Tester. How often are you seeing cryptocurrencies 
being used to avoid sanctions?
    Mr. Adeyemo. Senator, we recently put out a report, just 
last week, highlighting the use of cryptocurrencies in 
ransomware, to the tune of several hundred million dollars of 
collections through cryptocurrencies. We recognize that a 
number of actors who seek to impact our national security are 
using cryptocurrencies to try and get around our sanctions 
regimes. In terms of a quantifiable number, we know it is more 
than several hundred million dollars, and our goal has got to 
be to try and identify those where it exists and to stop it 
using the tools that Congress has provided us.
    Senator Tester. So from your perspective, do you think that 
cryptocurrency should be a regulated market in a way that is 
similar to our conventional monetary system?
    Mr. Adeyemo. Senator, from my perspective, one of the 
things that we have benefited from a great deal in the United 
States is innovation. Innovation has helped drive our economy, 
and financial innovation has done that. But it is important 
that as we think about those innovations we also have a 
regulatory regime that protects consumers and protects our 
national security. We are going to need to use the tools like 
the BSA and AML laws to make sure that we are protecting our 
national security, but there is also going to be a need to work 
with Congress to decide on whether we need additional tools in 
this space as well.
    Senator Tester. OK. Last question. You talked about reserve 
currency quickly, and you talked about the fact that we have it 
and we are probably not going to lose it. I have a little 
different perspective, but I want to hear yours. Could you tell 
me what impact defaulting on the debt might have on our status 
with reserve currency and the uncertainty that might create?
    Mr. Adeyemo. Senator, as Secretary Yellen has said, a 
default on the U.S. debt would be catastrophic from the 
standpoint of our credibility, not only to our creditors but 
our credibility in the world, and would have a clear impact on 
people's trustworthiness in the United States and our ability 
to meet our commitments.
    Senator Tester. And so you would see that as a giant step 
in the wrong direction as far as maintaining our reserve 
currency status?
    Mr. Adeyemo. Yes, Senator. Ultimately, the reason that the 
United States dollar is the reserve currency in the world is 
because people trust the United States economy. They have 
confidence in the investments and the decisions that we make. 
And if we were to not pay our bills on time it would send 
ricochets through those people who have confidence in our 
economy.
    Senator Tester. OK. Thank you, Mr. Chairman. Thank you.
    Chairman Brown. Thank you, Senator Tester. Senator Scott is 
recognized from South Carolina, from his office.
    Senator Scott. Thank you, Mr. Chairman, and thank you, Mr. 
Adeyemo, for being with us today. I have a couple of questions 
for you. I noticed that Senator Tester started asking questions 
about the plan to make sure that we do not default on our debt, 
or the consequences of us defaulting on our debt, and without 
any question I have read a number of reports that suggest that 
the plan that was going to be in place to make sure that we did 
not default on our debt was already being thought through, wise 
planning from my perspective.
    Here is a question, though, that is not related to 
sanctions, even though I know that we are talking about 
sanctions, but it would be impossible for me not to ask a 
question about the current proposals coming out of the 
Administration as it relates to the ability to investigate and/
or have access to every transaction in every American's banking 
accounts or financial accounts, based on simply $600 of flow 
coming through. I know that some proposals have $600, others 
have $10,000.
    The challenge is, whether it is $600 or $10,000, it 
captures basically the same number of accounts. Ultimately, if 
someone pays $800 a month in rent, that is $9,600. With any 
other transactions you break the $10,000 threshold. If you were 
a senior citizen receiving Social Security, with the average 
Social Security check being around $1,500, or $18,000 a year, 
your financial institution then has to report to the IRS your 
account.
    I do not know what in the world the IRS will do with the 
information that they receive from these financial 
institutions. I say this with the backdrop of the last Democrat 
administration. We saw the IRS not peering into but 
investigating nonprofit religious organizations and 
conservative organizations without expanding their power or 
their reach.
    So my concern is that as we see this Administration's 
proposal to give more access to the IRS to peer in and 
investigate, frankly, $600 of flow in and out of accounts of 
every American, that essentially captures all Americans' 
transactions in this country. If you are looking for tax 
cheats, that is a terrible way of figuring it out. But if you 
are, in fact, looking at a big Government proposal to have the 
ability to investigate every single transaction of a financial 
institution of your account, my account, and their accounts, 
well, this might be a good direction to go in. And I would love 
to hear why you think it is important for every American's 
transactions to be made available to the IRS.
    Mr. Adeyemo. Senator, thank you for that question because 
it gives me an opportunity to make clear the President's policy 
goal, which is to make sure that wealthy taxpayers who are 
avoiding taxes in this country pay the taxes that they owe. As 
you know, the top 1 percent of income earners in this country 
fail to pay more than $150 billion in taxes each year. And the 
reason for this is because they do not earn income the same way 
that most of your constituents do, which is by getting a W-2, 
which is information that a teacher or a truck driver or any 
other employees' company provides to them, but also then 
provides to the IRS.
    The reality is wealthy people often earn their income 
through partnerships or other ways in which they can sell an 
asset for $2 million, put that $2 million in the bank account, 
and tell the IRS that they only earned $100,000.
    What the President seeks to do is level the playing field 
so that wealthy individuals are forced to pay taxes in the same 
way that working-class people do every day in this country. We 
are committed to----
    Senator Scott. Thank you. Let me just follow up on your 
answer, because I do think you raise an important point, and I 
hope everyone who is watching is listening to what I think is 
an explanation that requires a little more questions.
    Let me think of it this way. The top 2 percent of Americans 
make about $18 out of every $100 but they pay about $36 out of 
every $100 in taxation. Sixty percent of Americans pay no 
Federal taxes. Here is my question. For those 60 percent that 
pay no Federal taxes, you are literally going to be having the 
access to investigate their accounts too.
    So if you are looking to simply find the tax cheats of the 
top 1 percent or 2 percent of Americans, you do not need a 
threshold of $600. You do not need a threshold of $10,000. 
Frankly, you do not even need a threshold of $100,000. What 
this threshold of $600 or $10,000 does, it captures all the 
information, all the transactions of everyday Americans, not 
the rich ones but the ones working paycheck to paycheck, should 
not be forced to have an additional burden on their plates 
about whether or not the IRS is going to be investing them, 
whether or not someone is going to be harassing them. That is 
not about millionaires and billionaires. That is an actual 
additional burden on working-class Americans. We can do better 
than that.
    Thank you for your answer.
    Mr. Adeyemo. Can I just respond quickly?
    Chairman Brown. Mr. Secretary, of course.
    Mr. Adeyemo. The President is willing to work with Congress 
on the threshold, on ways to protect those who earn W-2s, and 
those who get Social Security payments. Our ultimate goal is 
making sure that wealthy people who do not pay the taxes that 
they owe, pay those taxes in order to make sure that we have 
the money to pay for things like infrastructure and childcare 
in this country.
    Chairman Brown. Senator Menendez----
    Senator Scott. Mr. Chairman, I appreciate you giving my 
time to the witness to respond. I will simply say this, that if 
you are looking for a way to make sure that people pay their 
fair share of taxes, I have got to tell you that this proposal 
is not in the same universe of accomplishing that goal. This 
proposal, whether it is $600 or $10,000, if you exclude the 
Social Security recipients at $1,500, you still have the vast 
majority of Americans, working paycheck to paycheck, with an 
additional burden, with another thing to be concerned about, 
from their Government. That is not the way the free market 
should work. It is certainly not the way that we want our 
country working, that every single American has to be concerned 
about the IRS. Those three letters are scary enough without 
giving them more access to our accounts unnecessarily, 
especially for working-class Americans.
    Thank you very much for your response.
    Chairman Brown. Senator Menendez from New Jersey is 
recognized.
    Senator Menendez. Thank you, Mr. Chairman. Mr. Secretary, 
would you agree that sanctions are one of the few peaceful 
tools of diplomacy?
    Mr. Adeyemo. Senator, I do agree that sanctions are an 
effective tool of diplomacy that are peaceful.
    Senator Menendez. I appreciate that the Treasury Department 
is thinking through how to ensure that sanctions remain an 
effective tool, but I am concerned that this review does not 
reflect a holistic approach to sanctions. I mean, I see the 
Treasury Department as basically the entity that once an 
Administration decides to pursue sanctions in pursuit of 
peaceful diplomacy somewhere in the world is the executor of 
those sanctions.
    I think most people would agree that sanctions are a 
foreign policy tool, but this review is basically a Treasury-
centric product that does not address the many sanctions 
authorities implemented by the State Department and largely 
pays lip service to the State Department's role in sanctions.
    At the same time, I get the sense that the State Department 
often struggles to play an effective role. They do not match up 
well to Treasury's resources and capacity in this area.
    So my question to start off is, why spend all of this time 
and effort on a review when it is a single-agency product 
rather than one that is reflective of the overall foreign 
policy component that should be the driving force, I think, in 
our sanctions policies?
    Mr. Adeyemo. Senator, I completely agree that sanctions are 
a tool that are driven by foreign policy decisions that are 
made, and mainly driven by the State Department and the 
National Security Council. But given the importance of this 
tool and the use of the tool, we wanted to make sure that we 
are ensuring that the tool is effective going forward, and we 
worked closely with the State Department with regard to this 
report, and we look forward to working closely with them----
    Senator Menendez. Well, let me ask you this. I do not know 
how closely you worked, but would you consider a join effort 
with State, moving forward?
    Mr. Adeyemo. We do plan a joint effort with State, going 
forward.
    Senator Menendez. Let me ask you, you know, sanctions are 
only as good as they are enforced, like any other law. If you 
have a law--you know, there is a red light and you go through 
the red light, unless there is the likelihood there will be an 
enforcement against you for doing so, you will go through the 
red light. Same thing in terms of sanctions, in a more 
significant context.
    I have raised this before, but I am deeply concerned that 
China is continuing to buy oil, in significant--significant--
quantities, from Iranians, both subverting international 
sanctions and impacting the oil market. I am disappointed that 
the United States, and for that fact the rest of the 
international community, does not seem to be holding China 
accountable for these violations.
    What steps are you taking to enforce sanctions on China to 
comply with the law?
    Mr. Adeyemo. Senator, at the Treasury Department we are 
committed to complying with the law and to seeking intelligence 
on the companies and entities that are purchasing illegal oil 
and to holding them accountable. We are happy to provide you 
and your staff with a classified briefing on the steps we are 
taking with regard to those entities.
    Senator Menendez. Well, I appreciate that you are committed 
to it, but only sanctioning actually makes it relevant, at the 
end of the day. And this is being done in plain view. I mean, 
we are talking about, you know, millions and millions of 
barrels of oil that are being purchased by China from Iran, in 
clear view of everyone in the international community. I do not 
know how much due diligence is ultimately necessary to find out 
that which is available to the public eye. So I really look 
forward to hearing what you are going to do in that regard.
    I also look forward to understanding, for example, you 
know, Turkey and the S-400. They are talking about making more 
purchases. When we wrote this law, we wrote it in such a way so 
that certain actions are mandatory in nature, not 
discretionary, but yet we have seen, both the past 
Administration and this Administration, not necessarily 
enforcing the mandatory nature of the sanctions. Why not?
    Mr. Adeyemo. Senator, I am committed to enforcing mandatory 
sanctions where we have the proof and evidence to do so. We 
rely heavily on the counsel of career lawyers at the Treasury 
Department and the DOJ in terms that enforcement and also on 
the intelligence that we have at hand.
    Senator Menendez. Well, I love lawyers but they can kill 
every process in the world. The reality is that I find that 
Congress' intent is habitually subverted by both the previous 
Administration, and so far, in some cases, this Administration.
    Last question. When can expect to see designations related 
to the Executive order on imposing sanctions on certain persons 
with respect to the humanitarian and human right crisis in 
Ethiopia that was issued by the Administration on September 
17th?
    Mr. Adeyemo. Senator, we are committed to finding a 
peaceful resolution to the situation in Ethiopia, and the 
President has issued an Executive order and we continue to work 
with parties to bring them to the table. But it made it very 
clear that we are also willing to use that Executive order to 
do so. As the process continues, we will continue to evaluate 
sanctions targets and are committed to keeping you informed as 
we do so.
    Senator Menendez. OK. I appreciate you are very committed, 
but I have to be honest with you, I do not see the commitment 
in action, and so I am looking forward to the action on these 
and others. And I have other questions I will submit for the 
record.
    Thank you, Mr. Chairman.
    Chairman Brown. Thank you, Senator Menendez. Senator Daines 
from Montana is recognized from his office.
    Senator Daines. Mr. Chairman, thank you, and I want to 
extend a warm welcome to our witnesses, and I appreciate this 
opportunity to discuss a few matters that are affecting the 
security of our Nation.
    Over the past year, China has exerted increasing pressure, 
both militarily as well as financially on Taiwan, its neighbors 
in the South China Sea, while at the same time hedging itself 
from international pressure with new antisanctions laws.
    Mr. Adeyemo, how does China's decision not to extend 
antisanctions laws into Hong Kong inform our own strategy for 
deterring aggression and assuring our allies in the South 
Pacific?
    Mr. Adeyemo. Senator, thank you for the important question, 
and I think this speaks to why we believe it is critical that 
as we move forward on sanctions we look for, at every 
opportunity, the ability to do them multilaterally. Frankly, 
our adversaries are seeking to find ways around our sanctions 
every day, and the best way to ensure that they are unable to 
do that is by making sure that our sanctions are not just 
driven by the United States but by the international community 
made up of our allies and partners.
    While the economic impact of our sanctions is great, my 
bringing along our allies and partners we increase the 
political impact of isolation, which matters to our adversaries 
and puts us in a better position to enforce these sanctions 
over the long term.
    Senator Daines. Mr. Adeyemo, I agree with you, the 
multilateral approach is a good approach, and I would encourage 
you to head in that direction.
    In addition to these antisanctions laws, China's main goal 
in the development of the digital yuan is to establish an 
alternative to the U.S. financial system and one that is immune 
to sanctions. How can we ensure that our sanctions policy does 
not risk the centrality of the U.S. dollar as a dollar-based 
institution and the U.S. payment networks that carry importance 
that are far beyond the specific country that is being 
sanctioned?
    Mr. Adeyemo. Senator, again I think that one of the things 
we need to do as we think through how to make sure that we 
further enhance the dollar-based financial system is ensuring 
that our allies and our partners remain bought into that 
system, by working more with them going forward.
    In addition to doing that, we need to do many of the things 
this Committee has been calling for, for a long time, in terms 
of the principles that you have outlined, making sure that when 
we do use sanctions we are using them as part of a clearly 
defined strategy, that we are allowing for humanitarian access 
to continue to flow. When it comes to a country like China, it 
is true that they are trying to find means around our financial 
system to avoid sanctions, but it is difficult for countries, 
our adversaries, to find a means around not only the U.S. 
financial system but the financial systems of our partners and 
allies as well.
    Fundamentally, by taking actions in unison with other 
countries, we put ourselves in a better position to make sure 
that we maintain the dollar-based financial system globally and 
also that we are able to hold our adversaries accountable for 
actions that they take that are in violation of international 
laws and norms.
    Senator Daines. Thank you. Speaking of adversaries, just 
earlier this month, without warning or explanation, the Biden 
administration lifted sanctions on two Iranian entities 
involved in the military missile programs, the Mammut 
Industrial Group and a subsidiary, Mammut Diesel. This action 
contradicts earlier assurance by President Biden that he would 
not ease sanctions until Iran reversed its course on the 
pursuit of a nuclear weapon.
    Mr. Adeyemo, why did the Administration lift sanctions on 
these two entities?
    Mr. Adeyemo. Senator, I want to assure you this was not in 
response to a change in Administration policy but rather in 
response to legal actions that were taking place. I am happy to 
provide you with a more detailed briefing on those legal 
actions in another setting.
    Senator Daines. Of course, it gave us, I think, great 
concern. And so perhaps a more direct question would be, does 
the President remain committed to preventing Iran from 
obtaining a nuclear weapon, or should we expect to see more of 
these, I think what I would call them, quiet concessions?
    Mr. Adeyemo. So Senator, again, I want to make clear that 
this was not a concession but rather in response to a legal 
action. The President remains committed to ensuring that Iran 
does not have a nuclear weapon. He has made that if Iran 
reenters the JCPOA we are willing to take steps in that regard, 
but not before.
    Senator Daines. Last, on Afghanistan, as the Nation 
continues to deal with the terrible aftermath of President 
Biden's very abrupt withdrawal from Afghanistan, questions 
remain as to how the U.S. is going to prevent the rise of 
terrorism and address the growing humanitarian crisis in that 
Nation. Do you foresee a scenario where the United States would 
relinquish the frozen Afghan Central Bank reserve to the 
Taliban?
    Mr. Adeyemo. Senator, I see no situation in which we would 
allow the Taliban to have access to the reserves that belong to 
the Afghan people. We believe that it is essential that we 
maintain our sanctions against the Taliban, but at the same 
time find ways for legitimate humanitarian assistance to get to 
the Afghan people, and that is exactly what we are doing.
    Senator Daines. Thank you, Mr. Chairman.
    Chairman Brown. Thank you, Senator Daines. Senator Van 
Hollen of Maryland is recognized for 5 minutes.
    Senator Van Hollen. Thank you, Mr. Chairman. Welcome, Mr. 
Adeyemo. Good to see you. And I agree that sanctions are only 
one tool in our national security and foreign policy toolbox, 
but as you indicated, they can play an important role in 
enforcing a rules-based international system.
    You would agree, would you not, that China grossly violated 
its international obligations when it cracked down on democracy 
in Hong Kong.
    Mr. Adeyemo. I agree, Senator.
    Senator Van Hollen. And while we know that sanctions cannot 
always succeed in reversing malign conduct, if we raise the 
costs of those actions we send a signal that, whether it is 
China or another country, if they want to engage in this kind 
of aggressive behavior elsewhere they will pay a price. But 
that only works if they actually pay a significant price.
    After China's actions in Hong Kong, the Congress passed 
legislation--Senator Toomey and I authored legislation, the 
Hong Kong Autonomy Act--which requires the Executive branch to 
impose sanctions on officials that are complicit in the 
crackdown in democracy, and importantly, on financial 
institutions that helped facilitate those individuals.
    Senator Toomey and I wrote to Secretary Yellen back in 
June, applauding the Administration for sanctioning some 
individuals, but raising the question about whether or not the 
Administration had been successful in identifying any financial 
institutions that facilitated those.
    There have been conversations since, but as of today, is it 
your testimony that the Department of Treasury cannot identify 
any financial institutions that facilitate the individuals that 
you have applied sanctions to?
    Mr. Adeyemo. Senator, as we said then, we have not found 
financial institutions that facilitate those types of 
transactions, but it is something we are continuing to look at. 
I think you made a clear point that one of the goals is to 
increase the cost to people who take these types of actions, 
and from our perspective, not only doing this unilaterally but 
working with our allies to raise the cost is critically 
important as well.
    Senator Van Hollen. Well, let me turn to another piece of 
legislation that Senator Toomey and I, and Senator Brown 
passed, called the BRINK Act, which applied sanctions against 
any financial entities facilitating North Korea's malign 
activities. And it was modeled after the Iran sanctions 
legislation so it was mandatory and secondary sanctions.
    To date, despite the fact that a U.N. group identified lots 
of financial institutions that they say are helping North Korea 
evade those sanctions, the Administration, neither the previous 
one nor the current Administration, the Biden administration, 
has imposed sanctions on any of these financial institutions 
since the passage of the BRINK Act. Is it your testimony today 
that we have not identified any financial institutions that are 
helping North Korea violate the sanctions?
    Mr. Adeyemo. Senator, as you know well, over the last 
decade we have sanctioned a number of financial institutions 
that have been facilitating trade with North Korea and holding 
responsible a number of people who have taken these actions. 
While we may not have taken sanctions under the act that has 
been passed, we do appreciate the authority that Congress has 
given us that will allow us, in the future, to do so. And as we 
find financial institutions that violate the law and facilitate 
this trade we are committed to taking these actions.
    Senator Van Hollen. Yeah, here is the issue. The issue is 
that it is not just authority in the BRINK Act. It is a 
requirement. They are mandatory sanctions. And they are 
mandatory sanctions on any entities, anywhere in the world, 
that are facilitating the North Korean regime. And so my 
question remains--and you can get back to me--are you familiar 
with the U.N. reports that have been done, where they actually 
identify, by name, entities around the world that are helping 
North Korea violate the sanctions regime? Are you aware of 
those reports?
    Mr. Adeyemo. Senator, I am aware of those reports.
    Senator Van Hollen. OK. And have we looked at the reports, 
and have we concluded that they are wrong?
    Mr. Adeyemo. Senator, we have not concluded that the 
reports are wrong. What we have not done is found evidence 
sufficient for the mandatory sanctions that are required under 
the BRINK Act. But we look forward to continuing to look for 
that evidence and to working with you and your staff to use the 
mandatory sanctions that have been passed by Congress to hold 
North Korea accountable and to make sure that we are able to 
prevent them from advancing their weapons of mass destruction 
program.
    Senator Van Hollen. Well, I appreciate that. You know, the 
Appropriations Committee, we just released our appropriations 
bills for public review yesterday. I chair the FSGG 
Subcommittee, and we have language in there really directing 
the Executive branch to provide us with an update. Because we 
have, on the one hand, the U.N. report that identifies, by 
name, these entities, and yet we have not seen any action. And 
if the reason is that we do not have sufficient evidence, I 
would love to sit down with you and go over that.
    Thank you, Mr. Chairman.
    Mr. Adeyemo. Senator, I am happy to do that.
    Chairman Brown. Thank you, Senator Van Hollen. Senator 
Cramer from North Dakota is recognized for 5 minutes.
    Senator Cramer. Thank you, Chairman Brown. Thank you, 
Ranking Member Toomey. Thank you, Mr. Secretary, for being 
here.
    I want to follow up on a couple of things. First of all, 
both Senator Toomey and Senator Menendez and others, but 
especially the two of them, have certainly emphasized the 
expressions of commitment have not led to action in terms of 
enforcing, and in the case of Nord Stream 2, where I want to 
drill down a little bit, certainly CAATSA.
    And that is a pretty big problem, because you said 
something else about, I think it was to Senator Scott, about 
multilateral coordination is really important. Nord Stream 2 
has been strongly opposed by the European Union Parliament, I 
mean on two votes of like 400-100, and that is just rounding up 
the lower number and down the higher number.
    So it is hard for me to see much commitment when the 
President announces, just sort of out of the blue, the lifting 
of sanctions on Nord Stream 2, an authority he does not even 
have.
    And I think that we have concluded that the State 
Department determined that Nord Stream 2 AG has facilitated 
sanctions evasion. On whose behalf? On whose behalf? I mean, 
who is the winner here? Why did the President lift the 
sanctions? Why are we facilitating this? I mean, on whose 
behalf is this being done?
    Mr. Adeyemo. Senator, I appreciate the concerns, and they 
are concerns that we share. What we are doing, within the 
Treasury Department, is making sure that we are looking for any 
evidence that we can that will allow us to use the mandatory 
sanctions that Congress provided to us. We have met, on several 
occasions, with Members of the Committee staff here to hear 
from them in terms of the evidence that they have. We have also 
worked closely with the Department of Justice to make sure that 
we have a good understanding of the legal authorities that we 
have in order to be in a place where we can take actions when 
we have the appropriate evidence.
    Senator Cramer. But the President's actions are completely 
unilateral, they were outside of the law, and I want to know on 
whose behalf it was done? I mean, the European Union or 
multinational relationship, overwhelmingly opposed this 
completing of Nord Stream 2.
    And let me tell you a couple of good reasons why it is a 
bad idea, in the first place, Nord Stream 2. Because it has 
natural gas, produced in Russia, moved via pipeline, like Nord 
Stream 2. Besides captivating European allies to a single 
source, setting that aside for a moment, has, through the 
lifecycle of that gas, a 41 percent higher greenhouse gas 
emission footprint than natural gas produced in the United 
States and liquified and sent to the same European allies. And 
that does not even include the methane leakage.
    So what I am trying to wrap my mind around is what is the 
good reason for lifting sanctions? And I know you are looking 
for every legal reason to enforce the law, which is interesting 
to me, but what is your theory, if you do not know, why the 
President would have done something like this?
    Mr. Adeyemo. Senator, we share your concerns with regard to 
the Nord Stream 2 project. Ultimately, our goal here is the 
same as yours, which is to make sure that we provide for the 
security of our key allies while doing it in a way that does 
not further those that seek to destabilize the region.
    Our role, at Treasury, is to make sure that we use the 
mandatory sanctions authorities that you have provided, and 
that is what we are committed to doing when we have the 
sufficient evidence to do so.
    Senator Cramer. Well, I am concerned about the bigger 
picture. I mean, here we are going to send the President, and 
most of the Cabinet, it seems, to Glasgow, to try to convince 
the world to be as good as we are. Although we have a Secretary 
of Energy who, in North Dakota last week, said we, the United 
States, does not have the moral authority to hold China 
accountable when they are emitting three times more greenhouse 
gas emissions than we are. They are on a trajectory to become 
responsible for 100 percent of greenhouse gas emissions growth, 
while we are on the decline.
    And I am just having a heck of a time understanding why we 
apologize for the United States while covering for China, who 
just, as you know, we just learned, had a very successful 
circumventing of the globe of a missile. It is very, very 
concerning, and I am just concerned about whose side this 
Administration is on when it comes to both our economy and, 
frankly, even, frankly, to climate change.
    What I see is a transfer of climate guilt to big polluters 
as somehow making us feel better, and then I do not know what 
they are going to say in Glasgow that is going to be convincing 
to our allies. But thank you for your testimony, and I yield.
    Mr. Adeyemo. Senator, ultimately the President believes 
that climate change is a global responsibility, but the 
transition to a clean energy economy is an opportunity for the 
United States, in which if we make the investments that are 
needed we can become a leader in selling American goods and 
service around the world that help to meet the needs of climate 
change.
    Senator Cramer. And I am all on board. I argued to stay in 
Paris with the last Administration for those very reasons. But 
I am not seen that kind of leadership anymore. I mean, the 
approval of Nord Stream 2, there are multiple bad things about 
it, and I have not found one good one, including on whose 
behalf we facilitated these sanctions breaches.
    Chairman Brown. Senator Warren from Massachusetts is 
recognized for 5 minutes.
    Senator Warren. Thank you, Mr. Chairman. So giant 
corporations and the wealthy have worked hard to rig the tax 
code so that they can pay lower taxes than everyone else. And 
now the Democrats are looking to try to make the tax code just 
a little bit fairer, and hordes of lobbyists are fighting us, 
tooth and nail, to stop it.
    The whole thing is disgusting, but one fight is downright 
breathtaking, even in this cesspool, and that is the lobbyists' 
fight to protect the ability of their wealthiest clients to 
cheat on their taxes.
    Millions of hardworking Americans file their taxes honestly 
every year. Their employers send them W-2 forms that say 
exactly how much they earned in wages, right down to the penny. 
And then the employers also send a copy of that to the IRS. 
This is called third-party reporting, and it helps taxpayers 
fill out their tax forms accurately. It also helps the IRS zero 
in on tax cheats if the numbers do not add up.
    Wage earners, from cashiers to teachers, are subject to 
third-party reporting, but the wealthy get their money in other 
ways, and mostly the IRS does not get any information, no 
third-party reporting, to keep them honest.
    So Deputy Secretary Adeyemo, let us consider a 
multimillionaire with several mansions, who sells one of those 
mansions for several million dollars more than they paid for 
it. That is taxable income. But does the IRS get third-party 
verification of how much profit they made?
    Mr. Adeyemo. No, they do not, Senator.
    Senator Warren. All right. Let us ask about a partner in a 
law firm or a private equity fund. When they get millions of 
dollars as a distribution of profits from their firm, does the 
IRS get true, third-party verification of how much money they 
make?
    Mr. Adeyemo. No, they do not.
    Senator Warren. OK. So when rich people rake in millions in 
sales or profit distributions, they are on the honor system. So 
tell me, Deputy Secretary, how is the honor system working 
right now?
    Mr. Adeyemo. It is not working well, Senator. As you know 
the top 1 percent of earners in America underpay their taxes by 
more than $150 billion each year, almost $2 trillion over the 
course of 10 years.
    Senator Warren. More than $150 billion a year is lost by 
these top earners. And that is exactly why Congress is 
considering a simple new, third-party reporting requirement. 
Under this proposal, banks would report just two very general 
numbers to the IRS each year: total dollars that come into an 
account and total dollars that have gone out. This means the 
IRS can spot wealthy tax cheats that have millions of dollars 
flowing into an account but they are not reporting any money on 
their tax return.
    Now many rich people are happy now with the current system, 
and the banks who serve them are also happy. So they have 
started a campaign to keep the IRS in the dark about tax 
cheating, and some of these folks are just outright lying about 
the proposal, claiming, for example, that it would give the IRS 
information on individual transactions. And some Republicans 
have picked up on these lies.
    So let us go through some of these. Deputy Secretary 
Adeyemo, just to set the record straight, under this proposal 
if I bought new tires or a couch or a cow, would the IRS know 
about it?
    Mr. Adeyemo. No, they would not, Senator.
    Senator Warren. Well, if I paid my friend, Sherrod, back 
for buying me a cup of coffee, would the IRS know about it?
    Mr. Adeyemo. No, they would not, Senator.
    Senator Warren. Would anything, anything at all in this 
proposal, cause the IRS to increase audit rates on folks making 
less than $400,000 a year?
    Mr. Adeyemo. No, Senator. It would actually allow us to 
reduce audits on those individuals and increase our ability to 
go after those who are more likely to cheat the system by 
underpaying their taxes, which are wealthy taxpayers.
    Senator Warren. Well thank you, Deputy Secretary. You know, 
this proposal would help unrig our tax system just a little 
bit, making sure that the wealthy have to pay the taxes they 
owe, just like everyone else does.
    So tell me, why have the lobbyists been fighting this 
proposal so fiercely? Small businesses have been putting 
together W-2s for their employees every year for a zillion 
years. Do not tell me that the banks cannot do this.
    Mr. Adeyemo. Senator, those who do not seek to pay their 
fair share will go to no ends to try and avoid taxation, and 
that is exactly what we are seeing here. The President's goal, 
ultimately, is to level the playing field so that wealthy 
individuals have to pay taxes in the same way that working 
class pay every day in America.
    Senator Warren. Well, thank you very much. You know, the 
Democrats are fighting for tax reforms that will help ensure 
that the very rich and giant corporations start paying their 
fair share. And I get it that the lobbyists and the rich people 
that they represent are going to fight us with everything they 
have got, including spending millions and millions of dollars 
on these campaigns. But we need to make the tax system fairer, 
and this is one of the critical ways we can do it.
    Thank you for your help on this. Thank you, Mr. Chairman.
    Chairman Brown. Thank you, Senator Warren.
    I am not clear. No one is in the room, although Senator 
Hagerty is about to return, I understand. Senator Cortez Masto, 
or Senator Tillis from his office, perhaps, or Senator Cortez 
Masto from hers?
    [No response.]
    Chairman Brown. Senator Ossoff from his?
    [No response.]
    Chairman Brown. Senator Smith from hers?
    [No response.]
    Chairman Brown. One moment.
    [Pause.]
    Chairman Brown. Senator Hagerty is just a couple of moments 
out. I will ask one more question to the Deputy Secretary.
    The White House gathered, as you know, over 30 Nations last 
week and called for accelerated cooperation to combat 
international ransomware efforts. This effort shows your focus, 
the Administration's focus on protecting the community of U.S. 
companies from such attacks.
    How can Congress work more effectively and cooperatively, 
Mr. Deputy Secretary, with Treasury to address the problems of 
sanctions violations through cryptocurrency in cases of 
ransomware?
    Mr. Adeyemo. Senator, thank you for the important question, 
and as you know, recently we sanctioned our first 
cryptoexchange for the facilitation of ransomware payments. We 
are committed to continuing to look at using our sanctions 
authorities to go after those that use cryptopayments to 
violate our laws by committing crimes.
    We want to work closely with Congress. One of the most 
important areas for us, frankly, is ensuring that we have a 
workforce that understands these issues, going forward. So we 
look forward to both looking for the authorities to hire the 
people we need but also to the budget increases that are part 
of the President's fiscal year 2022 budget, in order to make 
sure that we have the personnel needed to address the issues 
cryptocurrency, but also other changes that are happening in 
the payment system that are making it harder for our sanctions 
regimes to effectuate the type of behavioral changes we want 
from our adversaries.
    Chairman Brown. Talk for a moment, too, about international 
cooperation to disrupt ransomware.
    Mr. Adeyemo. As you know, Senator, many of these 
cryptoexchanges and cybercriminals that facilitate ransomware 
exist outside the United States and have an impact here. Our 
goal is to work closely with our allies and partners to disrupt 
those actors that exist in their countries, and a big piece of 
this is going to be ensuring that these countries also take 
actions to make sure that anti- money laundering rules are 
followed by cryptoexchanges that exist in their countries, and 
that they are extending the protections that exist within their 
traditional financial sector to cryptocurrencies and to 
financial technologies that are started in their jurisdictions.
    Chairman Brown. Thank you, Mr. Secretary. Senator Toomey 
has one more question.
    Senator Toomey. Thank you, Mr. Chairman. Mr. Adeyemo, my 
question is this. Does the Administration intend to try and 
bypass the Senate's treaty approval process to implement Pillar 
One of the international tax agreement that the Administration 
is pursuing?
    Mr. Adeyemo. Senator, we, of course, look forward to 
working closely with you on the implementation of the 
international tax agreement. As the agreement is not completed 
I cannot speak to the process for working with Congress on 
those portions. But what we do know, based on the conversations 
we have had with our international partners, with Congress, and 
with the business community, is that the American business 
community is supportive of Pillar One, because they see it as a 
way of creating a level playing field throughout the world for 
them, going forward.
    Senator Toomey. Well, some of the business community are 
supportive and some are not. I would point out that the U.S. 
has 58 bilateral tax treaties in force. All of them were 
approved by a two-thirds vote in the U.S. Senate.
    And here is the problem. If you cannot answer the question 
of how you are going to impellent this, that obviously suggests 
there is some uncertainty about whether it will be implemented. 
It was Pillar One that was the motivation for other countries 
to agree to Pillar Two, which is the increase in the global 
minimum tax. If they do not know for sure that they are going 
to get Pillar One, and they have good reason to doubt it, then 
it is not at all clear to me that they are going to go ahead 
and impose Pillar Two, which they were reluctant to do in any 
case.
    So my suggestion would be before the Administration and our 
Democratic colleagues go ahead and impose this huge tax 
increase on American multinationals, which might not be met by 
a corresponding tax increase with other countries' 
multinationals, you might want to pause and get this figured 
out.
    Mr. Adeyemo. Senator, as you know, countries like Germany, 
France, the U.K., have higher minimum taxes than we do. Ireland 
and a number----
    Senator Toomey. Not with respect to the income of foreign 
subsidiaries.
    Mr. Adeyemo. These countries are all committed to 
increasing them to the global minimum tax.
    Senator Toomey. Yes. But as I said, that was as a 
condition. It was conditioned on them getting Pillar One, and 
you are not able to explain how you are going to get Pillar One 
implemented. So you have to question their commitment if they 
are not going to get what they bargained for.
    Chairman Brown. Senator Ossoff from Georgia is recognized 
from his office.
    Senator Ossoff. Thank you, Mr. Chairman, and thank you Mr. 
Adeyemo for your service and your testimony today.
    The comprehensive sanctions review that Treasury has 
undertaken in the first 6 months of the Administration--I 
appreciate the details that have been referred to the 
Committee--you have highlighted a number of what you assess to 
be success stories in that document. Could you please identify 
for the Committee one or two high-profile instances where U.S. 
sanctions have been ineffective, have not achieved their 
objectives, or where the cost or externalities of the sanctions 
have exceeded the benefit, from Treasury's perspective?
    Mr. Adeyemo. Senator, as we say in the sanctions review we 
did not conduct a comprehensive review of each one of the 37 
sanctions programs that are authorized by the Executive branch 
or Congress. Rather, this review was focused on a forward-
looking assessment of what we can do to make sure this remains 
an effective tool.
    What we learned, though, was that the places where we can 
improve sanctions going forward speak to some of the things 
that we could have done better in the past, for example, 
ensuring that we continue to use a framework for evaluating 
when sanctions are imposed and ensuring that humanitarian 
assistance is able to be provided to people in conflict zones.
    We have learned a great deal about doing both of these 
things over the last 20 years, and we look forward to applying 
them on a go-forward basis to our sanctions program.
    Senator Ossoff. Thank you, Mr. Adeyemo, but you do specify 
a number of cases where you believe U.S. sanctions policy has 
been effective. So I think in the interest of ensuring that we 
are improving U.S. policy, having undertaken a clear review of 
past policy, can you please specify cases where U.S. sanctions 
policy has not functioned as intended or effectively? The 
cases, for example, that inform the general assessment that you 
just shared with respect to humanitarian aid in conflict zones.
    Mr. Adeyemo. Senator, I think one of the challenges that we 
identified was the fact that because we did not have a clear 
framework for evaluating the imposition of sanctions in each 
one of the instances in the past it makes it hard to evaluate 
the success of those sanctions programs. As we said in the 
report and I said earlier, we did not evaluate each sanctions 
program or each sanction that was put in place, so I am not in 
a position to tell you where one could have been done better or 
done differently.
    What I can tell you is that on a go-forward basis we look 
forward to applying a framework that aligns with the principles 
that this Committee has spoken of, going forward, to ensure 
that we are in a place where we can evaluate the success of 
sanctions and decide where we need to do more or do less in 
order to effectuate our foreign policy goal and to ensure that 
sanctions are usable well into the future, as a foreign policy 
tool.
    Senator Ossoff. Mr. Adeyemo, the report--and I believe I am 
looking here at the full review and Executive summary--
specifies cases in Iran, a case with respect to the Cali 
Cartel, sanctions targeting Libyan assets following the fall of 
Khadafi's regime in 2011, the designation of over 1,600 
terrorist entities as success stories, I am asking you where 
our sanctions have not succeeded. Is it that you have not 
identified any such cases, or is there a lack of willingness to 
acknowledge policy failure in public?
    Mr. Adeyemo. No, Senator, you are right that in the report 
we do acknowledge a number of cases where we have seen clear 
success. As we said in the report, we did not focus in on each 
individual program or authority but rather we looked for 
themes, and we highlighted those themes, and I did so earlier 
in my testimony, of places where we need to make sure that we 
address challenges.
    Some of those challenges are challenges that we need to 
address that are internal challenges, one making sure that we 
are able to allow humanitarian assistance to flow and to making 
sure that sanctions are used as part of an overarching 
strategy. But some of the challenges are created by our 
adversaries and changes in technology. For example, our 
adversaries are attempting to find ways to get around our 
sanctions program, and the advent of cryptocurrencies and 
things of that nature make it harder for sanctions to be 
effective.
    Senator Ossoff. Mr. Adeyemo, with respect to my time being 
limited--and I may already be over my time--what I am asking is 
for you to identify. We are trying to learn lessons here. You 
have conducted a review of U.S. sanctions policy. You have 
identified in that review specific success stories. Please, 
with my remaining time, identify one or two specific examples 
where U.S. sanctions policy has been ineffective, so that the 
Congress can benefit from the review you have undertaken and 
deliberate how best to improve the statutes that govern these 
policies.
    Mr. Adeyemo. Senator, as I said, the review was focused on 
the idea of us looking into the future as to what we can do to 
use sanctions going forward. We did not spend time looking at 
the individual sanctions policies. I am more than happy to 
follow up with you and your staff to talk about any of the 
sanctions programs that you would particularly like to discuss, 
but our goal of the review was to look at what we could do 
going forward to make sure that sanctions remain an effective 
tool. In order to do that, we do need to address the challenges 
that the review found, which we have clearly articulated, both 
in the report and I have done in my testimony today, in order 
to make sure that going forward this tool is effective.
    Senator Ossoff. Yeah. Mr. Adeyemo, we will need to meet in 
person, because the purpose of this hearing is a policy update 
on the Treasury Department's sanctions policy review, and if we 
are unable, in a public setting, to articulate or discuss any 
specific cases where U.S. sanctions policy has been 
ineffective, beyond generalities, then I think we have more 
work to do. So I look forward to meeting with you so that we 
can work together to improve U.S. policy. Thank you.
    Chairman Brown. Senator Hagerty from Tennessee is 
recognized for 5 minutes.
    Senator Hagerty. Chairman Brown, Ranking Member Toomey, 
thank you for holding this important hearing, and Deputy 
Secretary, it is very good to be with you today.
    As I have said before, the financial system in America is 
the envy of the world, and we need to do everything that we can 
to safeguard it from malicious activity and malign behavior. 
The ability to access America's financial markets is a 
privilege. We must also appreciate the national security 
importance of using the financial tools in our arsenal to 
counter America's adversaries and to constrict our enemy's 
financial lifeblood.
    Just this weekend, we saw reports that the Chinese 
Communist Party surprised the U.S. intelligence community over 
the summer as they tested nuclear-capable hypersonic weaponry. 
This is a missile that circles the globe at speeds more than 
five times the speed of sound in a way that is harder to track 
and defend against before racing toward its target.
    Reports of such activity underscore the challenging 
environment that faces America today. We must use every tool in 
our arsenal to defend our interests and make it clear to our 
adversaries that America means business. We must do so in a 
manner that does not inadvertently harm U.S. dollar's current 
status in the world and make certain that we remain the world's 
reserve currency.
    Mr. Deputy Secretary, I agree with a number of the 
recommendations in the report that you have been discussing 
today. For example, clarity around sanctions is critical for 
enforcement, and we must ensure that costs to American small 
businesses are minimized. The report notes that if allowed to 
proliferate unchecked, digital assets could offer our 
adversaries a means to end-run our sanctions and harm the 
efficacy of those sanctions. The Chinese Communist Party has 
taken the extreme approach of banning all private sector 
cryptocurrency activity.
    Your predecessor at the Treasury Department recently wrote 
about the need to protect security in a manner that does not 
crush innovation, and I agree, and I think you do too. And we 
must understand China's ambitions in this space with its 
digital yuan, China's potential desire to facilitate sanctions 
evasion, and the associated national security implications for 
the United States.
    So I would like to ask you, how will the Biden 
administration and the Department of Treasury continue to lead 
in the digital assets arena in a way that protects us from the 
malign behavior of actors that we have been discussing and 
criminal activities that we might foresee?
    Mr. Adeyemo. Senator, thank you for the question, and I 
think one of the most important things for us is to remind 
ourselves that innovation is something that has been good for 
our economy, and we need to make sure that we create an 
environment that allows that innovation to exist but that we 
want to make sure that we have regulatory rules for the road 
that protect consumers, investors, and our national security.
    Doing that will require us to extend our existing 
regulatory apparatus to address these issues but also 
potentially work with Congress where we may need new regulatory 
rules of the road to address new innovation. But the thing that 
we want to make sure that we continue to do is that we create 
room for helpful innovation that will help advance our economic 
interest.
    Senator Hagerty. I appreciate the perspective, and I think 
that many of us look forward to working with you in that 
regard.
    I would like to turn to another point, and that has to do 
with the World Bank and the IMF and the influence of Communist 
China. Last month, the law firm of WilmerHale released findings 
from its investigation into data irregularities with the 
important World Bank's Doing Business Reports. These reports 
bill themselves as providing objective measures of business 
regulations for local firms in some 190 economies.
    The report found that the data describing the business 
climate in China was changed because of pressure by then-World 
Bank CEO Kristalina Georgieva. Her goal evidently was to 
inflate China's ranking at precisely the time that China was 
going to help the World Bank increase its capital, a clear 
conflict of interest. Despite legitimate issues and concerns, 
the Biden administration continues to support Dr. Georgieva to 
continue to lead the IMF.
    So Deputy Secretary, what steps is Treasury taking to 
ensure that the World Bank and the IMF are safeguarded against 
corruption by the Chinese Communist Party?
    Mr. Adeyemo. Senator, when we reviewed the Wilmer report we 
saw issues that were of serious concern, and that is why the 
Secretary demanded that the IMF look into this closely by 
speaking to the lawyers from WilmerHale and speaking with the 
managing director. Based on the evidence that we reviewed, we 
did not find that it was appropriate at this point to remove 
the managing director, but we did make very clear, during those 
meetings and directly to the managing director, that changes 
needed to be made to ensure that whistleblowers' rights are 
protected, that the integrity of the institutions are 
protected, which is our overarching goal, and that we will be 
holding her and the other leaders of the international 
financial institutions accountable for making these changes.
    Senator Hagerty. Well, I think the WilmerHale report 
highlighted clear concerns about conflict of interest, and I 
hope that you will continue to work with us to ensure 
transparency as you hold the IMF and the World Bank and 
agencies like this accountable to prevent them from being 
influenced by malign actors like the Chinese Communist Party.
    Mr. Adeyemo. We are committed to working with you on that, 
Senator.
    Senator Hagerty. Thank you very much.
    Chairman Brown. Thank you, Senator Hagerty. Senator Cortez 
Masto from Nevada is recognized from her office.
    Senator Cortez Masto. Thank you, Mr. Chairman. Deputy 
Secretary, thanks for joining us today.
    Let me talk a little bit about ransomware, which we know 
the attacks have doubled from 2019 to 2020, and there is no 
doubt they are a criminal menace and a national security 
threat. And I also know that in Nevada companies have been 
attacked by ransomware by criminals.
    So two questions for you. One, what does the U.S. 
Government recommend firms in the private sector do to address 
this, and then two, how should local governments and businesses 
be looking to address this, and is there some support at the 
Federal level that they can seek to help really prevent or 
prepare and what to do if they are somehow attacked through 
ransomware?
    Mr. Adeyemo. Senator, thank you for that important 
question, and I think the important thing for us all to 
recognize is that ransomware is a symptom of a larger 
challenge, which is that of cybersecurity. The most important 
thing that companies, our Government, individuals can do is 
make sure that they are focused on improving their 
cybersecurity in order to prevent criminal actors from being 
able to get into their system and potentially use them to 
ransom them in order to turn those systems back on.
    If a company or Government is attacked, the first thing we 
recommend that they do is get in contact with the FBI and to 
notify them immediately of these attacks. Our goal, ultimately, 
is to make sure that payments do not flow into the hands of 
criminal actors and that especially those payments do not flow 
into the hands of those people who have been sanctioned by the 
United States. So oftentimes those who have been attacked need 
to also contact the Federal Government and the Office of Asset 
Control in order to make sure that we are in a position to best 
help them resolve the situation and hold those accountable who 
are taking criminal actions against these enterprises.
    Ultimately, the President is committed to a whole-of-
Government effort, which involves not only the FBI and the 
Treasury Department but all agencies of our Government to hold 
people accountable. And as I discussed with Senator Brown 
earlier, it is going to be critical that we not only do this in 
the United States but that we have a global effort, because 
many of these cybercriminals are domiciled outside of our 
country.
    So we look forward to working with Members of Congress to 
address these issues and to making sure that we work with our 
allies and partners to do so as well.
    Senator Cortez Masto. Thank you, because listen, count me 
in. We need to address this and work together.
    Let me ask you this. Do you think sanctioning 
cryptoexchanges makes it riskier for firms to pay ransoms?
    Mr. Adeyemo. Senator, I do think that paying a ransom is 
something that a firm should--that is risky. Ultimately, our 
goal is to make sure that we stop these criminal enterprises 
from using ransomware as a tool to gain economic resources. So 
our goal is to make sure that when a company is attacked they 
notify us immediately. Treasury is committed to using all the 
tools in our arsenal to go after those who are committing these 
ransomware attacks.
    As you know, we recently sanctioned a cryptoexchange that 
predominantly facilitated ransomware attacks. We are also 
looking at other exchanges and other mixers that are doing the 
same, in order to hold them accountable, and working with our 
international counterparts to do so as well.
    Senator Cortez Masto. Thank you. Let me jump to something 
else. In 2018, I joined Senator Flake to request a report from 
the GAO on remittances to fragile Nations, and fragile Nations, 
as you know, have a weak financial system, high levels of 
poverty, and active criminal or terrorist activities. Can you 
expand on the sanctions review recommendations for careful 
calibration to limit the impact of sanctions on the flow of 
legitimate humanitarian aid to those in need, and how will you 
carefully calibrate sanctions to limit humanitarian suffering?
    Mr. Adeyemo. Senator, this is a critical issue. When we use 
our sanctions regime, our goal is to go after actors who 
violate our national security but to permit for humanitarian 
assistance to continue to flow. What we have learned over the 
last 20 years is that oftentimes when we do not permit 
humanitarian assistance as we are announcing a new authority it 
creates a gap between, and some uncertainty for those who are 
acting in this space.
    So part of our goals is to ensure that as we go forward we 
find ways to create exceptions, where possible, early on, so 
that humanitarian assistance can continue to flow, and to make 
sure that we are clearly communicating with the financial 
institutions that are facilitating humanitarian assistance 
going forward about what our policy intent is, and making clear 
what legitimate humanitarian assistance is permittable in order 
to make sure that as we hold people accountable for their 
violations of international laws and our national security we 
continue to allow people to receive the humanitarian assistance 
they need, going forward.
    Senator Cortez Masto. Thank you. Thank you again, Deputy 
Secretary.
    Chairman Brown. Thank you. Senator Moran from Kansas is 
recognized for 5 minutes.
    Senator Moran. Chair, thank you very much. Mr. Secretary, 
good morning. I want to echo, before I ask a couple of 
questions, I want to echo the concerns that I have heard a 
number of my colleagues raise in regard to sanction 
enforcement, and in that regard think about North Korea and 
Nord Stream 2, Iran. My point I would make to you is it seems 
like we have seen no change or modification in behavior in a 
positive way by any of those entities, those countries, while 
we are seemingly paused on our enforcement of sanctions.
    Let me now ask a couple of--and I hope the Administration, 
maybe there is an explanation for that, but I hope that we are 
forceful in our efforts to change behavior in all those 
instances.
    Let me start with this one in case I run out of time. I am 
trying to prioritize. Since 2014, the central banks of China, 
Russia, Iran, and Venezuela have all explored the creation of a 
central bank digital currency. As of now, China is well on its 
way to issuing its first CBDC. There is no question our 
adversaries will use Government-issued digital currency to 
evade U.S. sanctions, fund authoritarian regimes, and surveil 
civilian populations.
    How do central bank digital currencies allow for bad actors 
to accomplish their goals without detection, what steps are 
being taken to promote stability of our dollar based on the 
international financial system, and how does the Treasury plan 
to mitigate the blatant attempts by these countries to 
circumvent our sanctions?
    Mr. Adeyemo. Senator, thank you so much for that question, 
and I think from my perspective the best way to maintain the 
dollar's rule in the world is by making the needed investments 
here at home. Ultimately, the reason that the dollar is the 
world's reserve currency is because of the underlying strength 
of our economy, so by investing in that strength, by continuing 
to maintain a stable, rules-based system in the United States, 
we will continue attract capital.
    But you are right that other countries are developing 
things like the digital central bank currencies that will have 
an impact. Fundamentally, many of these countries seek to do 
this for a number of internal reasons, frankly, in order to 
better monitor their people and to make sure that they have 
greater control. But it will have an impact on the 
international financial system, but ultimately in order for any 
currency to have staying power it needs to be permitted to be 
used outside of that country, going forward.
    And what we are going to do, in terms of as we think about 
our sanctions regime, is to ensure that we are thinking through 
how we design sanctions in a way where, if a country attempts 
to subvert the U.S. financial system it will be harder for them 
to do that if we are taking sanctions actions with our partners 
and allies. While it is hard to get around the dollar-based 
financial system, it is nearly impossible to get around the 
dollar, the euro, the pound, and the yen. So when we are able 
to take actions together it puts us in a better position to 
hold our adversaries accountable.
    Senator Moran. Thank you. In fiscal year 2019, the NDAA 
provided for waivers under CAATSA, specifically, I think, with 
India in mind. Given India's importance as a partner in the 
Indo-Pacific, observers across the political spectrum note 
sanctions would do significant harm to our relationship.
    Does India meet the waiver requirements Congress passed 3 
years ago, and why is it taking a very long time to reach a 
decision?
    Mr. Adeyemo. Senator, that is a question that is driven by 
a foreign policy decision that I am not in a position to make. 
But what I can tell you is that we are committed to following 
the mandatory laws that Congress has passed and to using the 
authorities you provided appropriately, going forward.
    Senator Moran. You are sending me to the State Department?
    Mr. Adeyemo. I am saying that this is definitely a question 
that the Secretary of State is well positioned to answer, in 
consultation with others in the Administration.
    Senator Moran. You know, a similar circumstance arose in 
regard to Turkey, and it highlights, for me, that countries are 
making decisions that, regardless of our sanctions, they are 
continuing the behavior that the sanctions are designed to 
prevent or deter. Turkey is an example of that. India now 
presents, apparently, a similar kind of outcome. And it then 
highlights again--I would raise in the 16 seconds I have left, 
that there was a 2019 GAO report that found that officials at 
Treasury, State, and Commerce, quote, ``stated they do not 
conduct agency assessments on the effectiveness of sanctions in 
achieving broader policy goals.'' I would hope that this 
Treasury Department and others are responding to that GAO 
report to help us determine which sanctions work and in what 
circumstances, so that we can better mold our sanction policy.
    Mr. Adeyemo. And Senator, I appreciate the work of this 
Committee to lay out a set of principles that I think help us 
in doing that work. I think you are right that one of the most 
important things we can do is evaluate how these tools work, 
going forward. But in addition to new sanctions, a key is how 
do we enforce the sanctions that are on the books. That is not 
always done by making new announcements but rather in our 
engagement with our partners and allies to cutoff funding to 
countries that are malign actors, going forward. There are also 
interdictions at sea that are done in collaboration and 
coordination with our colleagues at the Defense Department. And 
we know that ultimately these things are in service of a 
foreign policy that is driven by decisions made by Congress and 
the President.
    So we appreciate the close working relationship with this 
Committee and the Foreign Relations Committee on making sure 
that we are enforcing Sanctions in a way that is in keeping 
with our national security.
    Senator Moran. Mr. Secretary, thank you.
    Chairman Brown. Thank you, Senator Moran. The Senator from 
Rhode Island, Senator Reed, the most senior Member in 
attendance on this Committee today, is recognized.
    Senator Reed. Thank you very much, Mr. Chairman. Mr. 
Secretary, welcome.
    We are facing a very challenging, very daunting, and very 
complex situation in Afghanistan. We have sanctions in place 
upon the Taliban and are unlikely to lift them. In fact, 
Secretary Blinken has said that if behavior is not acceptable 
further we could increase those sanctions. But at the same time 
there is a humanitarian crisis in the country, caused by many 
factors--the violence, the climate effects, et cetera.
    How do we manage this difficult balance between providing, 
or at least not interfering with the humanitarian assistance, 
and still maintaining sanctions effective sanctions against the 
Taliban?
    Mr. Adeyemo. Senator, thank you for your question, and you 
are correct that the situation in Afghanistan for the Afghan 
people is quite challenging, and those challenges are being 
brought on both by environmental circumstances, a number of 
circumstances that are unique to Afghanistan, but also by the 
lack of management of the Afghan economy by the Taliban.
    Fundamentally, our goal is to make sure that we are 
implementing our sanctions regime against the Taliban and the 
Haqqani Network but at the same time allowing for the 
permissible flow of humanitarian assistance into the country.
    To that end, we have met on a regular basis with 
humanitarian groups that are doing business in Afghanistan as 
well as our international partners, including the U.N. We have 
issued a series of general licenses that allow for the 
permissible flow of that humanitarian assistance going forward, 
and we are also consulting with these groups on specific issues 
that they continue to have.
    We believe that ultimately in order for humanitarian 
assistance to flow the Taliban has to allow that to happen 
within the country, but we are in a position where we are 
taking every step we can, within our sanctions regime, to make 
clear to humanitarian groups that we want to facilitate the 
flow of legitimate humanitarian assistance to the Afghan 
people.
    Senator Reed. Now I presume that the State Department--
well, I cannot presume that, because we have very little 
presence on the ground. Who is actually monitoring the 
distribution of these humanitarian support systems to ensure 
that they are not being abused, and, in fact, it is getting to 
the people who need it?
    Mr. Adeyemo. In many cases we are working directly with the 
State Department and USAID on these sets of issues, but a lot 
of the humanitarian assistance that flows around the world, 
including in Afghanistan, goes through the United Nations. As 
you know well, the U.N. themselves has a sanctions regime when 
it comes to certain actors within the Taliban. A number of 
these groups that are doing this work are familiar with doing 
work and providing humanitarian assistance in conflict zones, 
where they are forced to do so where there are sanctions in 
use, and they have done this for a long time. By consulting 
actively with us and working closely with our international 
partners we feel confident that we can allow the flow of 
assistance to get to the Afghan people without having to 
provide undue benefit to the Taliban.
    Senator Reed. Thank you. And I appreciate this, and this 
is, again, as I said initially, complex and challenging, and it 
is almost on a day-to-day basis, I presume, that you and your 
colleagues in the State Department are looking at this issue 
and making judgments about the effectiveness of the program. 
And that is, I think, a fair statement.
    Mr. Adeyemo. It is, sir.
    Senator Reed. Thank you very much, Mr. Secretary.
    Chairman Brown. Thank you, Senator Reed.
    Mr. Secretary, thank you for joining us today. It has been 
a comprehensive, useful survey of the policy issues surfaced in 
the course of your months-long sanctions policy review, and we 
are so glad you did that review. I thank you for sharing your 
insights and findings and recommendations for this Committee. 
This will be but the first in a series of ongoing 
conversations, a good beginning.
    Senators who wish to submit questions for the record, those 
questions are due 1 week from today, Tuesday, October 26. Mr. 
Deputy Secretary, you will have 45 days to respond to any 
questions.
    Thank you again for your public service. It is a pleasure 
always to work with you.
    [Whereupon, at 11:45 a.m., the hearing was adjourned.]
    [Prepared statements, responses to written questions, and 
additional material supplied for the record follow:]
              PREPARED STATEMENT OF CHAIRMAN SHERROD BROWN
    Today we welcome Deputy Secretary Adeyemo to the Committee for an 
update on international policy issues.
    Sanctions policy is an area where we have done important, 
bipartisan work on this Committee, across Administrations of both 
parties.
    Working with then-Chair Crapo, we were able to make important 
progress in holding countries like Russia and North Korea accountable. 
Senator Toomey and I worked together to pass tough new fentanyl 
sanctions, to help stem the flow of illegal opioids from China and 
Mexico that have taken such a toll on both of our States.
    I'm confident that we'll be able to build on that progress this 
year and into the future, in conjunction with President Biden and 
Deputy Secretary Adeyemo.
    Two weeks ago in the Committee, we explored the economic and 
humanitarian crisis in Afghanistan, the role of sanctions, and how we 
can get more aid to the Afghan people, without resources falling into 
the hands of the Taliban.
    Last week, a broad coalition of countries, led by the United States 
and Europe, agreed to substantially increase aid to Afghanistan. And we 
continue to work with our allies to ensure that aid can be delivered 
effectively to the people there, despite sanctions against the Taliban.
    Today, we'll focus primarily on the findings and recommendations of 
the months-long sanctions policy review that Secretary Yellen directed 
the Treasury Department to undertake.
    The department consulted with agencies across the Government--
State, Commerce, the intelligence community, and others--as well as an 
array of private sector actors, including banks, businesses, 
nonprofits, international NGOs, and sanctions experts.
    That comprehensive review examined important questions of our 
current sanctions policy: Does the U.S. Government have the right 
sanctions tools? Are we using them effectively with our allies?
    Are we reassessing their application and adapting them as we go? 
Are we targeting the right people, entities, or countries, in the right 
way, with the right sanctions?
    And--ultimately--are we actually changing the behavior of targeted 
countries, entities, or people, where that's our goal?
    I know that Treasury has recommendations on these and other 
questions, and I look forward to hearing from Deputy Secretary Adeyemo 
today.
    There are some guiding, bipartisan principles that this Committee 
has recognized for years regarding sanctions policy:
    First, we should impose sanctions on a multilateral basis whenever 
possible. They're more effective, and garner broader political and 
diplomatic support if we impose them in coordination with our allies.
    Second, preserving and strengthening humanitarian exceptions and 
licensing are important, to ensure that people do not suffer from 
shortages of food, medicine, and other necessities because of 
sanctions.
    Third, for sanctions to be effective, they must have clear targets, 
goals, and objectives. If we're trying to change countries' and other 
actors' behavior, they need to understand how they can free themselves 
from sanctions.
    Fourth, the U.S. must do a better job of regularly assessing the 
effectiveness of sanctions. And we need to communicate those findings 
better to banks and other entities that effectively implement sanctions 
policy.
    Finally, the Executive branch must continue to support and empower 
the dedicated public servants across the Government charged with 
sanctions implementation and enforcement. As with any job, workers are 
our greatest asset--whether at Treasury, at State, in the intelligence 
community or elsewhere in our Government.
    They must have the funding, the analytical tools, the technical 
expertise--including in cryptocurrencies, which need a much closer 
look--and they need the technology and the time to do their jobs--
particularly as we have increased the use of sanctions all around the 
world.
    Today's hearing will also give Members a chance to survey other 
international policy issues within our jurisdiction, and pose any 
questions to the Deputy Secretary that they may want him to address.
    I thank Deputy Secretary Adeyemo for your work on these issues, and 
look forward to your testimony.
                                 ______
                                 
            PREPARED STATEMENT OF SENATOR PATRICK J. TOOMEY
    Thank you, Mr. Chairman Deputy Secretary Adeyemo, welcome. Under 
President Biden, Treasury has advanced a number of troubling 
international policies, some of which are clearly intended to 
circumvent the will of Congress.
    Take sanctions. The Administration has offered sanctions relief to 
our adversaries in the unrealistic hope that they will make concessions 
inimical to their own interests and nature.
    Consider Iran. To entice Iran to reenter the flawed JCPOA, the 
Administration appears willing to lift sanctions on Iran. Then, the 
Administration hopes Iran will commit to cease supporting terrorism and 
curb its ballistic missile program.
    Let's be clear: Once sanctions are lifted, Iran will never limit 
its malign behavior. The Administration clearly intends to repeat the 
mistakes of the Obama administration and reenter a treaty with Iran 
despite bipartisan opposition and without Senate approval.
    In addition, the Administration has repeatedly failed to comply 
with mandatory sanctions laws. Since President Biden was elected, 
according to the International Energy Agency, Iran has doubled the 
amount of crude oil it's selling to China to 600,000 barrels each day 
this year. Even though these sales are illegal under sanctions laws, 
the Administration has refused to impose congressionally required 
sanctions on them.
    The Administration has also chosen to ignore a law requiring 
sanctions for Russia's Nord Stream II pipeline. The pipeline's project 
manager has been using sanctioned Russian entities to construct and 
finance Nord Stream II--meaning the manager's integral role in the 
pipeline is predicated on a massive sanctions evasion campaign.
    Congress passed the Countering America's Adversaries Through 
Sanctions Act, or CAATSA, to punish, among other things, this exact 
type of conduct: sanctions evasion. Congress did this because sanctions 
evasion harms U.S. national security interests, and in this instance, 
it is increasing Putin's malign influence over Europe. But the 
Administration continues to violate that law in order to give Putin a 
pass.
    As if all that were not enough, the Administration is trying to 
enact an international tax treaty that will harm U.S. competiveness, 
and to do it without obtaining the necessary two-thirds approval of the 
Senate. This tax increase consists of two pillars.
    Pillar One is an unprecedented change that would allow foreign 
countries to tax American companies based on their sales overseas. It's 
a tax revenue transfer from us to them. Unsurprisingly, this is the 
priority for other countries, who have long sought this tax transfer.
    Pillar Two is a 15 percent global minimum tax on multinationals' 
foreign income. This is the Administration's attempt to justify 
burdensome tax increases on U.S. companies. Unsurprisingly, this is the 
Administration's priority since it's integral to their efforts to 
dismantle the successful 2017 tax reforms.
    By imploring other countries to implement a global minimum tax that 
will harm their own workers and businesses, the Administration has 
implicitly acknowledged that their proposed multinational tax increases 
will make U.S. workers and businesses less competitive, if other 
countries either don't implement a global minimum tax of their own, or 
implement a significantly lower rate than what the Administration is 
proposing.
    But there is a real possibility that other countries will not 
implement a global minimum tax. They have only reluctantly agreed to 
Pillar Two in return for Pillar One, which is the transfer of U.S. tax 
revenue to them. But implementing Pillar One in the U.S. requires the 
approval of two-thirds of the Senate through the treaty process. And 
that's not going to happen.
    Therefore, the Administration is either going to impose its global 
minimum tax increase on American companies without the countries we 
compete with enacting a corresponding tax increase, or violate the 
Constitution by modifying our existing tax treaties without obtaining 
the two-thirds consent of the Senate.
    The latest troubling international policy proposal from the 
Administration will soon come in a report from FSOC. That report is 
likely to claim that global warming poses a systemic risk to the 
financial system.
    I acknowledge that global warming is real. However, it does not 
follow from this that there is a new systemic risk to the financial 
system. We have had severe weather events since the dawn of time.
    As the economist John Cochrane has explained to this Committee, 
major weather events ``have never come close to causing systemic 
financial crises'' and there's no scientifically validated possibility 
to change this in the future. Democrats should acknowledge this reality 
and offer their proposals on climate change through the legislative 
process, which they are doing--including calling for a ``carbon'' tax 
in their reckless tax-and-spend measure that will make energy prices 
higher.
    But that's not enough for them. They also want to use unaccountable 
financial regulators to abuse their power and essentially cut off the 
supply of capital to fossil fuel companies.
    All across America, we are already seeing what happens when the 
regulatory environment discourages the development of necessary energy 
sources: Energy prices spike. This dynamic will only get much worse if 
financial regulators are pressured to starve the energy sector of the 
capital it needs to provide Americans the energy they need.
    Deputy Secretary Adeyemo, I look forward to discussing these issues 
with you today.
                                 ______
                                 
                  PREPARED STATEMENT OF WALLY ADEYEMO
              Deputy Secretary, Department of the Treasury
                            October 19, 2021
    Chairman Brown, Ranking Member Toomey, and Members of the 
Committee, thank you for giving me the opportunity to speak to you 
today about the National Advisory Council on International Monetary and 
Financial Policies (NAC) report to Congress, the Treasury Department's 
priorities, and our outlook for the global financial system.
    The NAC report focuses on U.S. involvement with international 
financial institutions (IFIs) that represent part of our Nation's 
legacy of leadership in international economic affairs. The Bretton 
Woods Institutions--the International Monetary Fund (IMF) and World 
Bank--were founded in the aftermath of World War II to help rebuild and 
stabilize the global economy. Working through these institutions, the 
United States helped establish an international economic system that 
supported historic growth during the second half of the 20th century. 
From 1950 to 2000, for example, the volume of world trade increased to 
more than 21 times its size in 1950, delivering prosperity to millions 
of people around the world.
    Today, the IFIs advance American interests by fighting poverty, 
supporting robust and inclusive global growth, combating climate 
change, and promoting stable and transparent markets around the world. 
They also play a critical role in marshalling global economic resources 
in times of crisis. This past year, as COVID-19 ravaged economies 
around the world, numerous international financial institutions took up 
the mantle of fighting the pandemic. In 2020, the IMF approved more 
than $100 billion in emergency lending, concessional financing, debt 
service relief, and precautionary support to fund pandemic response and 
economic recovery efforts, while the World Bank Group offered more than 
$42 billion in financing to fight the virus. In addition, this year the 
IMF approved a historic $650 billion allocation of Special Drawing 
Rights to support global liquidity and spur recovery from the pandemic. 
We know that COVID-19 does not respect borders or boundaries. We must 
continue to fight this virus globally, with all of our policy tools and 
the resources of the international financial institutions.
    The IMF and World Bank form the core of an international financial 
architecture that is consistent with our economic interest. It is no 
accident that the U.S. economy is the largest in the world, that our 
financial markets are the deepest and the most liquid, and that the 
dollar is the world's reserve currency. Our economic success is the 
result of the policy choices we made coming out of World War II, 
alongside the hard work and determination of the American people.
    The IFIs have played a key role in reinforcing these choices and 
strengthening the global economy by supporting market development, 
promoting strong institutions and good governance, and encouraging 
efforts to protect vulnerable populations around the world, including 
minority groups like the LGBTQI+ community. Maintaining our leading 
economic position will require us to make a number of critical policy 
choices to adapt this architecture to the needs of the 21st century 
economy.
    Our work to reform the international tax system represents an 
important step in that process. Today, the global minimum tax rate on 
multinational corporations is zero. Too often, countries compete over 
who can offer the lowest tax rate rather than who has the most 
innovative ideas, the strongest workforce, or the best infrastructure. 
This dynamic has led companies to move production and jobs offshore to 
take advantage of tax loopholes, increasing their profits at the 
expense of American workers. We are on the precipice of changing that. 
In response to Secretary Yellen's leadership, more than 135 countries 
have signed onto a reform framework that would set a global minimum tax 
of at least 15 percent and put in place rules to minimize tax avoidance 
and ensure corporations pay their fair share.
    America's interest in a strong, stable, and rules-based global 
economy is also deeply entwined with our foreign policy and national 
security interests. Our economic objectives cannot succeed if the 
international financial system facilitates the illicit flow of funds to 
oppressive regimes, terrorist groups, cybercriminals, and other malign 
actors. Bearing this in mind, Secretary Yellen requested a review of 
Treasury's use of sanctions since the terrorist attacks of September 
11, 2001. An important finding of this review is that, in light of the 
growing interconnectedness of global finance, trade, and supply chains, 
it is critical that Treasury use a rigorous framework to guide its 
recommendations on imposition of economic and financial sanctions. The 
review also recommended a number of strategic, operational, and 
procedural actions to help preserve and enhance this tool.
    First, whenever possible, we as an Administration must use 
sanctions in coordination and collaboration with our allies, taking 
advantage of the greater impact that comes from acting together. While 
we can inflict significant economic costs unilaterally, multilateral 
action brings advantages that cannot be achieved without cooperation: 
broad condemnation and a clear signal that other economies will not 
offer targets the opportunity to evade our sanctions.
    Second, Treasury must modernize its sanctions infrastructure, 
technology, and workforce to adapt to evolving threats from 
cybercriminals, ransomware, and others. Third, we must take further 
steps to minimize the collateral costs of sanctions. This includes 
costs on domestic groups, like small businesses and community banks, as 
well as international ones, such as populations in sanctioned 
jurisdictions struggling to access legitimate humanitarian aid. 
Intelligence and facts on the ground must be placed at the center of 
our decision making, informing our pursuit of these objectives.
    This commitment to multilateralism and the restoration of U.S. 
international leadership lies at the foundation of President Biden's 
foreign policy. International challenges like combating climate change, 
defeating COVID-19, securing critical supply chains, and countering 
China's unfair practices must be addressed cooperatively, working 
closely with the Department of State and alongside our international 
partners and allies, including through the international financial 
institutions and international organizations such as the U.N., where 
possible.
    Our efforts to reform international taxation, enhance Treasury 
sanctions policy, and support the IFIs reflect President Biden's 
fundamental goal to build a foreign policy for the middle class. 
Collectively, they embody our belief that the international economy 
must be governed by fair rules of the road that protect American 
workers and businesses and promote market competition that rewards hard 
work and innovation. Where corrupt and malign actors seek to undermine 
these rules and our values, we will continue to use sanctions and other 
tools at our disposal to safeguard the security and integrity of the 
international financial system. And we will continue to work through 
the IFIs to facilitate global coordination, enable information sharing, 
and promote a commitment to democratic values and a rules-based 
international economic system.
    Thank you for your time. I look forward to working with you to 
continue to advance U.S. international economic leadership abroad and 
create opportunities for Americans at home. I am happy to take your 
questions.

        RESPONSES TO WRITTEN QUESTIONS OF CHAIRMAN BROWN
                       FROM WALLY ADEYEMO

Q.1. Bolstering the Sanctions Workforce Across the Government--
During the hearing, I noted that strengthening the sanctions 
workforce across Government is one of the Treasury Department's 
key recommendations. What new resources or authorities, if any, 
do you expect to need to address these U.S. Government 
``sanctions infrastructure'' issues identified in the review? 
Do you expect there will need to be any structural changes to 
the sanctions workforce, either within Treasury's Office of 
Terrorism and Financial Intelligence, or more broadly, to 
ensure consistency and effectiveness of sanctions policies and 
procedures? Will the expanded hiring authority provided to 
Treasury in AMLA help in this regard?

A.1. We are conducting an ongoing evaluation of how to best 
implement the recommendations from the Sanctions Review, 
including ensuring the Department has the right expertise, 
technology, and staff to support a robust and effective 
sanctions policymaking, implementation, and enforcement 
process. This includes assessing TFI's sanctions workforce and 
operational capabilities, with an emphasis on current staffing 
for key TFI components, including OFAC. We are also continuing 
to evaluate our internal and external information technology 
systems that support our sanctions workforce. As we conclude 
this evaluation, we look forward to briefing you and other 
Members of the Committee on any structural changes we are 
contemplating in order to ensure the consistency and 
effectiveness of sanctions policies and procedures.
    We appreciate and continue to use the direct hire authority 
provided by the AMLA to enhance our TFI workforce, as we seek 
to hire additional staff with technical expertise in data 
analysis and digital assets, as well as individuals with 
relevant financial services industry experience.

Q.2. Measuring Sanctions Effectiveness--It's often difficult to 
define the precise impact of sanctions, and to measure their 
effectiveness in meeting their policy purpose--whether it is to 
change the behavior of a targeted Nation, like Russia, and its 
election interference, or to cut off funds going to non-State 
terrorist actors like Hezbollah, ISIS or al Qaeda. What new 
analytical tools or methods do you recommend using to measure 
the overall effectiveness of our sanctions policies? How will 
those tools be used in your work with this Committee, and other 
appropriate committees of Congress like Senate Foreign 
Relations and House Foreign Affairs?

A.2. Let me acknowledge there are several ways to measure the 
effectiveness of sanctions. The Sanctions Review recommends 
institutionalizing an assessment of sanctions programs using a 
structured policy framework built around the key policy 
considerations outlined in the report published on October 18. 
This will help ensure sanctions continue to support evolving 
policy priorities. Congress is a critical partner on sanctions, 
and we look forward to working with Members and staff on key 
aspects of sanctions.

Q.3. Consistency Across Sanctions Programs--The Taliban's 
designation as a Specially Designated Global Terrorist group 
combined with its takeover of Afghanistan has created serious 
challenges for NGOs on the ground working to support and 
protect the people of Afghanistan focusing on increasing human 
rights during a particularly turbulent and challenging time. 
The general licenses issued for Afghanistan are limited to 
humanitarian activities, while recent sanctions imposed on 
Ethiopia were issued alongside a broader set of general 
licenses that appropriately included exceptions for conflict 
mitigation and development work in addition to humanitarian 
activities. Did Treasury's review focus on the need to ensure 
consistency across sanctions programs, including with respect 
to licensing? Is Treasury planning to issue additional general 
licenses for Afghanistan to protect legitimate peacebuilding, 
human rights, and development work in Afghanistan?

A.3. The Treasury review did focus on the need for consistency 
across sanctions programs with respect to licensing. As the 
situation in Afghanistan continues to evolve, Treasury is 
prepared to provide additional guidance in support of 
humanitarian assistance. As you know, Treasury has also 
provided guidance directly to NGOs and the private sector about 
a wide range of matters, including evacuation efforts, the 
provision of humanitarian assistance, and the export of 
agricultural goods and medicine. Furthermore, on September 24, 
2021, consistent with the U.S. Government's long-standing 
practice across Administrations of authorizing humanitarian-
related transactions and activities that support basic human 
needs in territories affected by sanctions, OFAC issued two 
General Licenses (GLs), which explicitly authorize: (1) the 
U.S. Government, NGOs, and certain IOs and other entities 
(including the U.N. and World Bank) to provide humanitarian 
assistance to Afghanistan or other activities that support 
basic human needs in Afghanistan; and (2) the exportation or 
reexportation of agricultural commodities, medicine, medical 
devices, replacement parts, components for medical devices, or 
software updates for medical devices to Afghanistan. For 
transactions not otherwise authorized by OFAC GLs, OFAC 
considers specific license requests on a case-by-case basis and 
prioritizes license applications, compliance questions, and 
other requests related to humanitarian support.

Q.4. Assessment of Compliance Supervision Within the Sanctions 
Review--Banks are the front line for U.S. sanctions 
implementation and sometimes raise concerns about a seeming 
lack of coordination between Treasury and the banking agencies 
that examine them for compliance. Did the Treasury sanctions 
review include this issue? If so, did you develop any 
recommendations on how best to ensure improved coordination and 
consistency on sanctions-related policies?

A.4. During the Sanctions Review, we engaged with a number of 
financial institutions on issues of sanctions compliance and 
some of the challenges they have faced. The Review recognized 
the important role that engagement and information-sharing with 
the private sector play in facilitating the assessment of 
customer risk and application of the risk-based approach to 
sanctions compliance. Going forward, Treasury seeks to build 
upon and expand existing OFAC outreach to key sectors and 
regulators affected by or involved in implementing complex 
sanctions actions and assessing sanctions compliance.

Q.5. Sanctions Technical Assistance to Congress--Congress works 
most effectively with the Executive branch when it cooperates 
on a bipartisan basis to develop effective, durable sanctions 
programs. That requires technical assistance to be provided by 
sanctions experts at Treasury and State consistently, starting 
early on in the legislative process. Have you considered 
creating a ``strike team'' of Treasury sanctions experts whose 
job it would be to consult with sanctions oversight committees 
and respond to technical assistance requests quickly, drawing 
on Treasury-wide expertise to ensure greater coordination on 
these issues?

A.5. The Sanctions Review did consider a number of options for 
strengthening our ability to provide Congress with technical 
assistance, including by expanding the number of staff members 
tasked with working directly with Congress. We are happy to 
discuss with you in more detail the creation of a ``strike 
team'' and other ways we can improve our coordination.

Q.6. Easing the Delivery of Humanitarian Aid in Sanctioned 
Jurisdictions--The Sanctions Review notes that ``Treasury must 
address more systematically the challenges associated with 
conducting humanitarian activities through legitimate channels 
in heavily sanctioned jurisdictions. Where possible and 
appropriate, Treasury should expand sanctions exceptions to 
support the flow of legitimate humanitarian goods and 
assistance.'' As you implement the review recommendations, what 
form or forms does Treasury envision these expanded sanctions 
exceptions or exemptions will take? Would they be in the form 
of general licenses, a temporary global general license, 
humanitarian exemptions written into Executive orders, or some 
other form? Is Treasury considering broadening its licensing 
activities to include other areas in which international non-
Governmental organizations work--including, for example, long-
term development projects related to infrastructure, schools 
and education-related services, and other projects that are 
often equally inhibited by sanctions?

A.6. Though the review was not designed to offer a detailed 
roadmap for specific changes in law and policy on humanitarian 
exceptions to sanctions, it makes clear that facilitating flows 
of legitimate humanitarian aid through transparent channels 
while continuing to deny support to malign actors is a priority 
for Treasury. This is an area into which Treasury plans to look 
more closely, alongside U.S. Government partners such as the 
State Department and USAID, including examining the most 
effective ways to operationalize this recommendation. The 
review also underscored the need to enhance existing engagement 
with civil society and humanitarian groups, as well as to 
continue to provide clear guidance on the impact of sanctions 
on the flow of humanitarian assistance early in the sanctions 
process.

Q.7. Bank Access for NGOs in World Hotspots--Questions of bank 
derisking in the delivery of aid were partially addressed at 
the hearing. What specific strategies has Treasury found to 
have worked best over the years to improve bank access for 
international NGOs working in humanitarian crises, and how 
specifically is the Department continuing to work to improve 
such access in hotspots like Afghanistan, Yemen, Ethiopia, and 
elsewhere?

A.7. We have found that direct engagement with financial 
institutions and NGOs is critical to addressing these issues. 
It is the U.S. Government's long-standing practice across 
Administrations to authorize humanitarian-related transactions 
and activities that support basic human needs in territories 
affected by sanctions. OFAC's Sanctions Compliance and 
Evaluation Division maintains a hotline and feedback email 
through which financial institutions, NGOs, and others can 
request guidance on specific sanctions compliance questions. 
OFAC prioritizes humanitarian-related compliance questions in 
hotspots like Afghanistan, Yemen, Ethiopia, and elsewhere. Over 
the years, Treasury has found that this prioritization has been 
effective in addressing the derisking issues that you raise. As 
noted above, Treasury also works closely with our interagency 
partners, including the State Department and USAID, to ensure 
that our licenses align with the U.S. Government's policy 
objectives. In addition, Treasury regularly engages with U.S. 
and international NGOs working in areas affected by 
humanitarian crises to receive recommendations and feedback to 
address the derisking issues that you raise.
                                ------                                


        RESPONSES TO WRITTEN QUESTIONS OF SENATOR TOOMEY
                       FROM WALLY ADEYEMO

Q.1. Climate--I remain concerned that the Financial Stability 
Oversight Council (FSOC) is seeking to pressure financial 
regulators to enact backdoor environmental policy, not based on 
actual risks but as part of a political effort. Last week, the 
FSOC issued a report arguing that climate-related financial 
risks are an ``emerging threat to the financial stability of 
the United States.'' \1\ The FSOC reached this conclusion 
despite acknowledging ``significant challenges to assessments 
of risks to financial stability from climate change,'' 
including data and methodological challenges.
---------------------------------------------------------------------------
     \1\ https://home.treasury.gov/system/files/261/FSOC-Climate-
Report.pdf
---------------------------------------------------------------------------
    Do you believe that climate change poses a threat to U.S. 
financial stability and, if so, on what basis do you reach that 
conclusion given the data and modeling challenges associated 
with measuring potential climate-related financial risks?

A.1. In its Report on Climate-Related Financial Risk, the 
Council identified climate-related financial risks as an 
emerging threat to the financial stability of the United 
States. One of the purposes of the Council under the Dodd-Frank 
Act is to respond to emerging threats to the stability of the 
U.S. financial system, and its assessment of climate-related 
financial risks is consistent with that mandate. Over the past 
decade, there has been growing attention from financial 
regulators, business leaders, investors, and policymakers 
around the world to the threat climate change poses to 
financial systems and economies at global, national, and local 
scales.
    The Council's assessment of climate-related financial 
risks, which is described in detail in its report, is also 
informed by ongoing economic research, the analysis of its 
members, and the extensive work of international counterparts, 
including the Financial Stability Board and the Basel Committee 
on Banking Supervision.
    Though the report acknowledges data and modeling 
challenges, Council members recognize that the need for better 
data and tools cannot justify inaction, as climate-related 
financial risks will become more acute if not addressed 
promptly. The report makes several recommendations for how its 
members can improve data and tools to help the Council expand 
its understanding of climate-related impacts on individual 
institutions and markets and related spillover effects.
    Concerns about the threat posed by climate change are also 
shared by the private sector. Notably, S&P Global, an 
independent credit-rating agency, estimated that, ``Almost 60 
percent of companies in the [S&P 500] (market capitalization of 
$18.0 trillion) and more than 40 percent of companies in the 
S&P Global 1200 (market capitalization $27.3 trillion) hold 
assets at high risk of physical climate change impacts. 
Wildfires, water stress, heatwaves, and hurricane (or typhoons) 
linked to increasing global average temperatures represent the 
greatest drivers of physical risk.''

Q.2. Do you believe there are risks from disfavoring 
traditional energy sources before alternative sources are 
capable of meeting customer demand?

A.2. As the Council's report outlined, there are both climate-
related physical risks, such as risks from increased severe 
weather events and forest fires, and climate-related transition 
risks, including a disorderly or delayed transition to a low-
carbon economy. The transition to a net-zero emission economy 
will require significant investments in clean energy generation 
and technologies, and I support the President's proposals to 
begin making those investments.

Q.3. Digital Currencies--Does the Treasury believe that 
privately issued stablecoins should be allowed to coexist with 
any Government-backed digital currency?

A.3. If well-designed and appropriately regulated, stablecoins 
could support faster, more efficient, and more inclusive 
payments options. But, in the absence of appropriate regulatory 
safeguards, stablecoins could also pose risks to investors, 
consumers, and the financial system, and raise concerns about 
illicit finance issues.
    The central recommendation in the PWG report is for 
Congress to enact legislation to ensure that stablecoins used 
for payment purposes are subject to a Federal prudential 
framework on a consistent and comprehensive basis. The 
relationship between stablecoins and a central bank digital 
currency would depend largely on the design features of any 
potential central bank digital currency, which is the subject 
of ongoing analysis by the Federal Reserve Board.

Q.4. When recently appearing before this Committee, SEC 
Chairman Gensler appeared to be unwilling to say that some 
stablecoins are not securities. Does Treasury view all 
stablecoins as securities?

A.4. Depending on the facts and circumstances, a stablecoin may 
constitute a security, commodity, and/or derivative, 
implicating the jurisdiction of the SEC, and be subject to U.S. 
Federal securities laws, or implicating the jurisdiction of the 
CFTC, and be subject to the Commodity Exchange Act. Treasury 
supports efforts by the SEC and the CFTC to ensure compliance 
with the laws they are charged with enforcing.

Q.5. As you know, Treasury and the President's Working Group on 
Financial Markets (PWG) intends to release a report on 
stablecoins in the near future. Many U.S. companies have 
developed stablecoins and related services, so domestic 
regulations that stifle the industry could have international 
implications to our competitiveness and leadership in emerging 
technologies.
    Does Treasury intend to highlight the benefits stablecoins 
could have in this report?

A.5. The PWG recently released a report on stablecoins, which 
outlines potential benefits and risks associated with 
stablecoins. If well-designed and appropriately regulated, 
stablecoins could support fast, efficient, and inclusive 
payments options. But if not appropriately regulated, there are 
risks of stablecoin runs, payment system disruptions, and 
concentration of economic power. The PWG recommended that 
Congress address these risks by promptly enacting legislation 
to ensure that stablecoins are subject to appropriate Federal 
prudential oversight on a consistent and comprehensive basis.
    While today stablecoins are primarily used in the United 
States to facilitate trading, lending, or borrowing of other 
digital assets, stablecoins could become widely used in the 
future by households and businesses as a means of payment. If 
well-designed and appropriately regulated, stablecoins could 
support fast, efficient, and inclusive payments options. 
Regulatory clarity will support beneficial innovation, while 
also protecting stablecoin users and the broader financial 
system against potential risks.

Q.6. Has Treasury considered discussing the international 
market changes that could result with additional domestic 
regulation of stablecoins?

A.6. The PWG report considers and builds on the work of 
international forums, including work that has led to 
recommendations, standards, principles, and guidance that may 
apply to stablecoin arrangements. The Financial Stability Board 
in October 2020 set out ten high-level recommendations that 
seek to promote coordinated and effective regulation, 
supervision, and oversight of global stablecoin arrangements.
    Treasury and the U.S. financial regulators are committed to 
continuing engagement at the FSB and international standard-
setting bodies to help ensure comprehensive oversight of 
stablecoin arrangements, further common regulatory outcomes 
across jurisdictions, and reduce opportunities for regulatory 
arbitrage.

Q.7. The entities known as money service businesses (MSB) that 
FinCEN regulates in the context of cryptocurrencies are the 
equivalent of what the Financial Action Task Force (FATF) 
refers to as a virtual asset service provider (VASP). In June 
2019, FinCEN issued guidance for what constitutes a MSB 
involved in the use of convertible virtual currencies (i.e., 
cryptocurrencies). On October 28, 2021, the FATF is expected to 
issue guidance for VASPs that aligns with FinCEN's June 2019 
guidance. Do you agree that no new guidance will be needed from 
FinCEN in the wake of FATF's recent publication on virtual 
asset service providers as it relates to the regulation of 
MSBs?

A.7. The United States has been a global leader in setting 
anti- money laundering and countering the financing of 
terrorism (AML/CFT) standards. In 2013, FinCEN issued guidance 
that set out the regulatory obligations for virtual currency 
users, administrators, and exchangers. FinCEN issued additional 
regulatory guidance in May 2019 that covered a wide spectrum of 
activity involving convertible virtual currency.
    We will continue to regularly engage with industry, law 
enforcement, and other regulators to monitor the virtual asset 
industry and determine if additional guidance is needed in the 
future.

Q.8. The FATF guidance mentioned above also advocates for 
broader adoption by VASPs of know your customer (KYC) and anti- 
money laundering (AML) policies that the U.S. has adopted. What 
other efforts is Treasury making to encourage more countries to 
adopt these policies?

A.8. In June 2019 the Financial Action Task Force (FATF) 
amended its standards, recommending all countries regulate and 
supervise virtual asset service providers (VASPs), including 
exchanges, and work to mitigate illicit financing risks when 
engaging in virtual asset transactions. Among other things, 
countries are expected to impose customer due diligence (CDD) 
requirements and suspicious transaction reporting obligations 
across VASPs, which can help inhibit cybercriminals' 
exploitation of virtual assets while supporting investigations 
into these illicit finance activities.
    Treasury supported this update and has contributed to 
several resources, including the Updated Guidance for a Risk-
Based Approach to Virtual Assets and VASPs. This guidance was 
published to help jurisdictions implement the existing FATF 
standards for VASPs. Guidance does not alter the existing FATF 
standards. The United States is committed to continued work at 
the FATF and with other countries and multilateral forums to 
implement the FATF standards, and we welcome the FATF's ongoing 
work on this issue. We are also engaging bilaterally with 
countries to encourage implementation of the FATF standards.

Q.9. Treasury and its Office of Foreign Assets Control recently 
took actions to warn cryptocurrency exchanges, including over-
the-counter (OTC) trading providers, of their responsibility to 
take measures to avoid facilitating ransomware payments. 
Treasury also took steps to separate clear criminal behavior 
from the underlying technology and the positive aspects of 
cryptocurrency networks. What potential benefits does Treasury 
see regarding cryptocurrency and domestic investments in 
related technologies?

A.9. Cryptocurrency service providers represent a diverse set 
of business models, and each cryptocurrency's specific design 
determines its features and potential benefits.
    At a broad level, digital assets, including 
cryptocurrencies, are a form of financial innovation with the 
potential to be transformative. America's ability to promote 
and harness innovation has been a key ingredient in our ability 
to seed new industries, generate new jobs and opportunities, 
and maintain our global economic leadership and 
competitiveness. We don't know how digital assets technologies 
will evolve, but we know that like other innovations, they 
offer the potential to unlock new opportunities. Experience has 
also shown that digital assets create certain risks, including 
issues of consumer and investor protection; issues of financial 
stability; and national security concerns related to money 
laundering, terrorist financing, proliferation financing, and 
ransomware.
    The President's Working Group (PWG), joined by the FDIC and 
the OCC, recently issued a report pertaining to a specific 
subset of digital assets, stablecoins.
    The PWG report outlines potential benefits and risks 
associated with stablecoins. If well-designed and appropriately 
regulated, stablecoins could support faster, more efficient, 
and more inclusive payments options. But if not appropriately 
regulated, there are risks of stablecoin runs, payment system 
disruptions, and concentration of economic power. The PWG 
recommended that Congress address these risks by promptly 
enacting legislation to ensure that stablecoins are subject to 
appropriate Federal prudential oversight on a consistent and 
comprehensive basis.

Q.10. Special Drawing Rights (SDR)--I opposed the 2021 
International Monetary Fund (IMF) general allocation of SDRs, 
as it was both untargeted and an inappropriate use of this 
tool. Among other things, I was concerned that these funds 
would be used contrary to American interests, such as repaying 
China's predatory belt-and-road loans. As we have seen over the 
past month, these worries appear to have been well founded. 
Several countries have announced how they plan to use their new 
SDRs. These plans include repaying Chinese loans \2\ and 
bailing out a State-owned oil company. \3\
---------------------------------------------------------------------------
     \2\ https://www.businessdailyafrica.com/bd/economy/kenya-seeks-
imf-aid-repay-chinese-loans-3557198
     \3\ https://www.bloomberg.com/news/articles/2021-09-06/mexico-is-
refinancing-pemex-debt-after-receiving-imf-reserves
---------------------------------------------------------------------------
    What has Treasury done, and what does it plan to do, to 
prevent abuses of SDRs?

A.10. The Treasury Department is closely monitoring the use and 
economic benefits of the SDR allocation and is working with the 
Department of State to jointly engage to promote SDR best 
practices, including transparency and accountability, by 
Governments who wish to use their SDRs. Treasury has also been 
working with the State Department to encourage allies and 
partners to refrain from exchanging SDRs with countries with 
whom we have significant policy concerns.
    At Treasury's urging, the IMF published a detailed guidance 
note as part of the SDR allocation to help authorities 
implement best practices with regard to SDR usage and 
transparency. In addition to its regular monthly topline 
reporting, the IMF also agreed to release enhanced quarterly 
reports showing country-level changes in SDR transactions and 
to publish an annual report on SDR trading operations.

Q.11. Will Treasury provide dollars via the IMF SDR program to 
fund repayments of China's belt-and-road initiative?

A.11. Treasury has the ability to decline any request from the 
IMF to exchange SDRs for dollars. Treasury closely scrutinizes 
each of the requests we receive.
    Moreover, Treasury, the IMF, and the rest of the 
international community are exploring ways for major economies 
to lend some of their SDRs through the IMF to countries in 
need. These loans will be used to help enable strong economic 
recoveries and build climate and health resilience, not to fund 
repayments to China. Channeling SDRs through the IMF in this 
way will greatly magnify the benefits of the SDR allocation by 
providing additional, targeted support to help countries 
continue to respond to and recover from the pandemic. As this 
SDR lending will occur through the IMF, it will be subject to 
IMF lending safeguards, including strong governance and 
transparency requirements on borrowers, and it will be overseen 
and approved by the IMF's Executive Board.

Q.12. Sanctions--According to leading ship tracking websites 
and the International Energy Agency (IEA), China has boosted 
purchases of Iranian oil to 600,000 barrels a day, five times 
more than in the first 9 months of 2020. \4\ Purchases of 
Iranian oil by Chinese companies are keeping Iran's economy 
afloat despite U.S. sanctions, \5\ such as the Iran Freedom and 
Counter-Proliferation Act (IFCA), that are designed to choke 
off such sales. According to Reuters, U.S. officials have 
acknowledged that they are watching these breaches of U.S. law 
and Deputy Secretary of State Wendy Sherman raised the issue 
with her Chinese counterpart in July 2021. \6\ Nonetheless, the 
Biden administration has not sanctioned a single Chinese 
transgressor.
---------------------------------------------------------------------------
     \4\ https://www.wsj.com/articles/iran-boosts-oil-exports-amid-
nuclear-deal-talks-11618497634
     \5\ See the Iran Freedom and Counter-Proliferation Act of 2012 
(P.L. 112-239) and Section 1245 of the Fiscal Year 2012 National 
Defense Authorization Act (P.L. 112-81).
     \6\ https://www.reuters.com/business/exclusive-us-has-reached-out-
china-about-cutting-oil-imports-iran-officials-say-2021-09-28/
---------------------------------------------------------------------------
    Do you believe that China's ongoing violation of the U.S. 
sanctions regime is a problem? Please answer ``yes'' or ``no.'' 
If your answer is ``no,'' please explain.

A.12. Treasury has sanctioned Chinese entities for the purchase 
of Iranian oil, and we continue to rigorously enforce our 
sanctions authorities. In addition to sanctions, diplomacy 
plays a critical role in reducing sanctions evasion. We can 
offer you more information in a classified setting.

Q.13. Why have Chinese violators of Iran oil sanctions not been 
sanctioned?

A.13. OFAC continues to enforce our sanctions, and U.S. 
sanctions on Iranian oil and petrochemicals remain fully in 
place. We can offer you more information in a classified 
setting.

Q.14. What specific steps are you taking to uphold the law and 
properly enforce U.S. sanctions on Chinese importers of Iranian 
oil?

A.14. OFAC continues to enforce our sanctions, and U.S. 
sanctions on Iranian oil and petrochemicals remain fully in 
place. We can offer you more information in a classified 
setting.

Q.15. Do you agree that if U.S. adversaries perceive the United 
States to be unwilling or unable to enforce U.S. sanctions, 
then they will be more likely to violate sanctions?

A.15. We will continue to enforce our sanctions until and 
unless Iran chooses a path of diplomacy and a path to a mutual 
return to compliance with the JCPOA.

Q.16. Do you agree that the blatant nonenforcement of sanctions 
on Chinese purchasers of illicit Iranian oil undermines the 
effectiveness and legitimacy of the U.S. sanctions regime?

A.16. OFAC continues to enforce our sanctions, and U.S. 
sanctions on Iranian oil and petrochemicals remain fully in 
place. We can offer you more information in a classified 
setting.

Q.17. China has taken an increasingly authoritarian and 
belligerent tone towards its neighbors, including Taiwan. One 
of the most potent national security weapons we have in our 
arsenal is sanctions.
    Has Treasury considered what steps it would have to take in 
the wake of a scenario in which China took severe aggressive 
action, such as an invasion, against Taiwan?

A.17. The Administration opposes any unilateral change in the 
status quo with respect to Taiwan. We work closely with our 
interagency partners to prepare for a variety of national 
security contingencies.

Q.18. Do you commit to working with Congress to consider 
legislation that will impose significant costs on China if it 
continues to engage in--or escalate--its aggressive activity 
towards Taiwan?

A.18. We are always available to provide Congress with input 
regarding legislation on this issue and others.

Q.19. Enacted in July 2020 with unanimous support, the Hong 
Kong Autonomy Act (HKAA) (P.L. 116-49) is an essential tool in 
holding individuals and foreign banks accountable when they 
assist Beijing in violating China's obligations to Hong Kong 
under the Joint Declaration and Basic Law. HKAA requires 
sanctions on entities that materially contribute to the erosion 
of Hong Kong's autonomy, and foreign banks conducting 
significant transactions with those entities. On March 16, 
2021, the Biden administration identified 24 previously 
sanctioned officials undermining Hong Kong's freedoms pursuant 
to Section 5(a) of the HKAA, yet it failed to identify any 
foreign financial institutions (FFIs) doing business with 
persons identified under Section 5(a).
    Why has Treasury not yet identified any foreign financial 
institution (FFI) that knowingly conducts a significant 
transaction with a foreign person sanctioned under Section 5(a) 
of the HKAA?

A.19. The Treasury Department continues to administer and 
enforce all our sanctions authorities, including under the 
HKAA. While Treasury cannot comment on possible or pending 
sanctions investigations, Treasury has not found any 
information on significant transactions with the identified 
foreign persons but continues to actively monitor for 
information as to whether any FFI may have knowingly conducted 
a significant transaction with any of the foreign persons 
identified in either of the State Department's reports 
submitted in the Section 5(a) Report or the Update following 
the dates of the reports' submissions (October 14, 2020, and 
March 16, 2021). Treasury has also conducted outreach to 
foreign Governments to help ensure they understand the 
reporting requirements and sanctions risks under the HKAA. 
Treasury will also continue to engage foreign Governments and 
FFIs to help ensure they understand the requirements and 
sanctions risks under the HKAA and other authorities, as well 
as any relevant public guidance OFAC has issued.

Q.20. On June 24, Senator Chris Van Hollen (D-MD) and I sent a 
letter to President Biden urging his Administration to use the 
HKAA to identify and sanction entities materially contributing 
to the Chinese Communist Party's assault on Apple Daily, the 
last prodemocracy newspaper in Hong Kong, and its founder Jimmy 
Lai. \7\ In June, Reuters reported that Hong Kong Security 
Secretary John Lee ordered HSBC and Citibank's respective Hong 
Kong branches to freeze Jimmy Lai's accounts. It appears both 
banks complied. \8\ After 500 policemen raided Apple Daily's 
offices in June, \9\ Hong Kong's Security Bureau ordered banks 
to freeze the newspaper's assets, leading to its closure. \10\ 
Section 5 of the HKAA requires the Administration to identify 
foreign entities that are ``materially contributing'' to the 
``inability of the people of Hong Kong to enjoy the freedom of 
assembly, speech, press, or independent rule of law.'' It seems 
very likely that the breathtaking crackdown on Jimmy Lai and 
Apple Daily involved numerous foreign persons to whom Section 5 
of the HKAA applies.
---------------------------------------------------------------------------
     \7\ https://www.banking.senate.gov/imo/media/doc/toomey-van-
hollen-letter-to-pres.biden.pdf
     \8\ https://cn.reuters.com/article/exclusive-hk-0527-thur-
idCNKCS2D80P8
     \9\ www.reuters.com/world/asia-pacific/hong-kongs-apple-daily-
newspaper-says-police-arrest-five-directors-2021-06-16/
     \10\ https://hongkongfp.com/2021/06/21/breaking-hong-kongs-apple-
daily-may-haltpublication-this-sat-pending-fri-board-meeting/
---------------------------------------------------------------------------
    Has Treasury investigated any entities involved in the 
suppression of Apple Daily and Jimmy Lai to whom Section 5 of 
the HKAA may apply, including the Hong Kong branches of HSBC 
and Citibank?

A.20. Treasury shares your deep concern about the crackdown on 
Apple Daily and Jimmy Lai. While we cannot comment on possible 
or pending sanctions investigations, we will continue to use 
available tools, including sanctions.

Q.21. What steps has Treasury taken to hold those responsible 
for the suppression of Apple Daily accountable?

A.21. While we cannot comment on possible or pending sanctions 
investigations, we will continue to use available tools, 
including sanctions. Additionally, Treasury worked with the 
Department of State, Department of Commerce, and the Department 
of Homeland Security to issue the first Hong Kong Business 
Advisory to warn U.S. persons of risks arising from the actions 
that the Chinese and Hong Kong authorities are taking to 
undermine the legal and regulatory environment in Hong Kong.

Q.22. Enacted in 2019, the Otto Warmbier Banking Restrictions 
Involving North Korea (BRINK) Act fills key gaps in the U.S. 
sanctions regime by imposing mandatory sanctions on the foreign 
banks and companies that facilitate illicit financial 
transactions for the Democratic People's Republic of Korea 
(DPRK). Treasury has not directly sanctioned any entities 
pursuant to the BRINK Act, despite reports by the United 
Nations \11\ and NGOs identifying \12\ relevant unpunished 
businesses.
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     \11\ https://www.undocs.org/S/2019/171
     \12\ https://rusi.org/explore-our-research/publications/special-
resources/project-sandstone-report-7-billion-dollar-border-town-north-
koreas-trade-networks-dandong-part-1
---------------------------------------------------------------------------
    Has Treasury investigated the financial institutions 
identified in the aforementioned reports?

A.22. While we cannot comment on possible or pending sanctions 
investigations, the Treasury Department continues to administer 
and enforce sanctions authorities with respect to the DPRK. We 
are committed to the implementation of sanctions mandated by 
Congress to maintain sanctions pressure on the DPRK.

Q.23. What obstacles are facing Treasury that prevent the 
sanctioning of financial institutions under the BRINK Act?

A.23. The Treasury Department continues to pursue a range of 
options to address the threat the DPRK poses to U.S. national 
security, including diplomacy and targeted pressure measures, 
and will not hesitate to use Treasury authorities where 
appropriate or mandated by law. The DRPK continues to develop 
ways to hide their transactions and disguise them from tracking 
efforts. The Department of the Treasury continues to coordinate 
closely with its interagency partners to address these 
challenges and appreciates our close cooperation with Congress 
on DPRK-related sanctions authorities, including the Otto 
Warmbier North Korea Nuclear Sanctions Act and North Korea 
Sanctions and Policy Enhancement Act, as amended by the BRINK 
Act.

Q.24. The Danish Energy Agency issued a press release on 
October 4, 2021, announcing that ``Nord Stream 2 AG has 
fulfilled relevant conditions including conditions concerning 
certification.'' \13\ Nord Stream 2 AG's construction permit 
requires a ``Certificate of Compliance'' issued by a 
``verifying third party,'' and it was reported earlier this 
month that Gazprom PJSC received the Danish approval for one of 
the lines to start, \14\ but that it needs approval from German 
and EU regulators before the gas can flow to Europe.
---------------------------------------------------------------------------
     \13\ https://ens.dk/en/press/nord-stream-2-pipeline-b-can-be-put-
operation
     \14\ https://www.bloomberg.com/news/articles/2021-10-06/why-nord-
stream-2-may-not-be-ready-in-time-for-europe-s-winter
---------------------------------------------------------------------------
    What is the name of the third party that was responsible 
for verifying Nord Stream 2 AG's compliance in order to obtain 
this Danish approval?

A.24. We would refer you to the State Department on this 
matter, as PEESA delegates the relevant authorities to the 
Department of State.

Q.25. Doesn't that third party meet the criteria for sanctions 
designation under Protecting Europe's Energy Security Act 
(PEESA) (P.L. 116-92) or Countering America's Adversaries 
Through Sanctions Act (CAATSA) (P.L. 115-44)?

A.25. We would refer you to the Department of State for 
questions regarding activities that may be sanctionable under 
PEESA or CAATSA Section 232, as these authorities have been 
delegated to the Department of State.

Q.26. The Biden administration has said it would remove 
sanctions that are ``inconsistent'' with the JCPOA, which 
grants relief for so-called nuclear-related restrictions, but 
does not include ``terrorism'' and human rights sanctions. \15\
---------------------------------------------------------------------------
     \15\ https://www.reuters.com/article/us-iran-nuclear-usa-
sanctions/u-s-prepared-to-lift-sanctions-inconsistent-with-iran-
nuclear-deal-idUSKBN2BU39F
---------------------------------------------------------------------------
    Can you please clarify specifically what ``inconsistent'' 
with the JCPOA means?

A.26. As the President has made clear, the United States is 
prepared to lift sanctions that are inconsistent with the JCPOA 
if Iran returns to full implementation of its commitments under 
the deal.

Q.27. Specifically, what sanctions designations and authorities 
have you defined as ``inconsistent?'' Please provide a list of 
all such sanctions you have identified.

A.27. Together with our State Department colleagues, we would 
be able to discuss our sanctions posture related to ongoing 
negotiations with you in a classified setting.

Q.28. On October 19, 2021, before this Committee, in responding 
to a question from Senator Daines (R-MT) on whether you foresee 
a situation in which the Taliban could be granted access to 
over $9 billion of funds that belong to Afghanistan's central 
bank (Da Afghanistan Bank, DAB), you replied: ``I see under no 
situation in which we would allow the Taliban to have access to 
the reserves that belong to the Afghan people.'' \16\
---------------------------------------------------------------------------
     \16\ https://twitter.com/BankingGOP/status/
1450907532302733320?s=20
---------------------------------------------------------------------------
    Can you confirm that under no circumstance will DAB funds 
blocked by the United States be provided to an Afghan 
Government controlled, directly or indirectly, by the Taliban?

A.28. Treasury sanctions continue to deny assets to the Taliban 
and other sanctioned persons in Afghanistan, such as the 
Haqqani Network, in order to deter and prevent actions that 
threaten U.S. national security, while also facilitating the 
flow of humanitarian assistance to the Afghan people via 
legitimate and transparent channels. Treasury's OFAC continues 
to maintain and enforce sanctions against the Taliban and the 
Haqqani network. Accordingly, all property or interests in 
property of the Taliban that are in the United States, that 
hereafter come within the United States, or that are or 
hereafter come within the possession or control of any United 
States person are blocked and may not be transferred, paid, 
exported, withdrawn, or otherwise dealt in.
    Furthermore, E.O. 13224 authorizes Treasury to impose 
sanctions against persons who materially assist, sponsor, or 
provide financial, material, or technological support for, or 
goods or services to or in support of, the Taliban, as well as 
foreign financial institutions that knowingly conduct or 
facilitate significant transactions on behalf of the Taliban.

Q.29. The Taliban, a Specially Designated Global Terrorist 
group intertwined with Al Qaida, poses new money laundering 
threats to both Afghanistan and the region. Section 311 of the 
USA PATRIOT Act (P.L. 107-56) gives the Secretary of the 
Treasury the authority to identify a foreign jurisdiction to be 
``a primary money laundering concern.'' Once identified, 
Treasury can require U.S. financial institutions to take 
appropriate countermeasures.
    Is Treasury currently assessing if the now-Taliban ruled 
Afghanistan has become a foreign jurisdiction of primary money 
laundering concern per Section 311? If not, why?

A.29. We are unable to discuss specific entities or 
jurisdictions that may be the subject of investigation. The 
Department of the Treasury continues to pursue its critical 
mission to safeguard the United States' financial system and 
enhance national security by identifying money laundering and 
terrorist financing typologies and actors, using all tools at 
its disposal--including information collection and regulatory 
actions--to deter and disrupt money laundering and terrorist 
financing activities.

Q.30. Treasury added 59 company names to a new Non-SDN Chinese 
Military-Industrial Complex Companies List (NS-CMIC List) 
supplanting the now deleted Non-SDN Communist Chinese Military 
Companies List (NS-CCMC List). These designations impose a ban 
prohibiting U.S. persons from investing in publicly traded 
securities of the listed companies.
    Is Treasury currently investigating other companies that 
may warrant designation under the NS-CMIC List?

A.30. Treasury cannot comment on possible or pending sanctions 
investigations. Treasury will continue to enforce its 
sanctions-related authorities, including with respect to 
entities that warrant identification on the NS-CMIC List.

Q.31. When can this Committee expect a new tranche of 
designations?

A.31. Treasury cannot preview any forthcoming sanctions 
actions.

Q.32. In January 2021, the Defense Department identified China 
National Aviation Holding (CNAH), the State-owned parent 
company of Air China, as a ``Communist Chinese military 
company'' operating directly or indirectly in the United 
States. \17\
---------------------------------------------------------------------------
     \17\ https://www.defense.gov/News/Releases/Release/Article/
2472464/dod-releases-list-of-additional-companies-in-accordance-with-
section-1237-of-fy/
---------------------------------------------------------------------------
    Why is CNAH not included in Treasury's Chinese Military-
Industrial Complex Companies List (NS-CMIC List)?

A.32. We appreciated the opportunity to brief Senate Banking 
staff in a classified setting in July 2021. OFAC continues to 
investigate a range of targets to be added to the NS-CMIC List 
but does not comment on possible or pending sanctions 
investigations.

Q.33. Is Treasury investigating if CNAH merits being added to 
the NS-CMIC List? If not, why?

A.33. Treasury cannot comment on possible or pending sanctions 
investigations. Treasury will continue to enforce its 
sanctions-related authorities, and Treasury continues to 
investigate potential targets to determine if they are entities 
that warrant identification on the NS-CMIC List.

Q.34. On September 3, 2021, Treasury designated four Iranian 
intelligence operatives who plotted to kidnap a U.S. journalist 
and human rights activist critical of the Iranian regime, a 
failed plot that led to the indictment of members of the 
network in late July. \18\ Masih Alinejad has very publicly 
revealed that she was the target of this plot. Why has the 
Treasury omitted her name in the press release about this plot?
---------------------------------------------------------------------------
     \18\ https://home.treasury.gov/news/press-releases/jy0343

A.34. Treasury can provide information regarding this matter in 
the appropriate setting.
                                ------                                


               RESPONSES TO WRITTEN QUESTIONS OF
            SENATOR CORTEZ MASTO FROM WALLY ADEYEMO

Q.1. Given the uncertainty surrounding the negotiations on a 
return to the JCPOA in Vienna, it is incumbent upon Congress 
and the Administration to think through what happens if the 
talks are not successful. Clearly in that instance, increased 
pressure will be needed on Iran. China, with its purchases of 
Iranian oil and other trade with Tehran, clearly has the most 
economic leverage with Iran. In spite of the fact that Chinese 
imports of Iranian oil and other petroleum products continue, 
few Chinese entities have been sanctioned by the United States.
    What options do we have to press China to reduce and 
ultimately cutoff the economic lifeline it provides to the 
Iranian regime?

A.1. The Administration is committed to using diplomatic 
efforts as well as our sanctions authorities to respond to 
Iranian sanctions evasion, including to address those doing 
business with China, and we will continue to do so if 
necessary. U.S. sanctions on Iranian oil and petrochemicals 
remain fully in place. We will continue to enforce them until 
and unless Iran chooses a path of diplomacy and a path to a 
mutual return to compliance with the JCPOA.

Q.2. What changes does Treasury see in deciding how to 
implement sanctions that could be reversed if a country or 
person stops the criminal or terrorist action?

A.2. The power and integrity of U.S. sanctions derive not only 
from their imposition, but also from their removal in response 
to changes in behavior. The primary goal of sanctions is not to 
punish, but to bring about a positive change in behavior. In 
the case of reconsidering targeted sanctions on entities or 
individuals, such as those involved in criminal or terrorist 
acts, each removal is based on a review by OFAC of relevant 
information, in consultation with our interagency partners, 
including close coordination with the State Department. 
Maintaining the integrity of U.S. sanctions is a high priority 
for OFAC and is the driving principle behind its rigorous 
review process for individually evaluating every request for 
removal on its merits and applying consistent standards to all 
of them.

Q.3. The Office of Foreign Asset Controls just took sanctions 
actions against a cryptocurrency exchange where as much as 40 
percent of transactions were criminal.
    What role can legitimate exchanges play in ensuring 
sanctions are not violated, and law enforcement can 
appropriately intercept malicious activities?

A.3. Virtual currencies are beginning to play an increasingly 
prominent role in the global economy. The growing prevalence of 
virtual currency as a payment method likewise brings greater 
exposure to sanctions risks-like the risk that a sanctioned 
person or a person in a jurisdiction subject to sanctions might 
be involved in a virtual currency transaction. Accordingly, the 
virtual currency industry--including technology companies, 
exchangers, mixers, administrators, miners, and wallet 
providers--plays an increasingly critical role in preventing 
sanctioned persons from exploiting virtual currencies to evade 
sanctions and undermine U.S. foreign policy and national 
security interests.
    As a general matter, U.S. persons, including members of the 
virtual currency industry, are responsible for ensuring they do 
not engage in unauthorized transactions or dealings with 
sanctioned persons or jurisdictions. OFAC strongly encourages a 
risk-based approach to sanctions compliance because there is no 
single compliance program or solution suitable to every 
circumstance or business. An adequate compliance solution for 
members of the virtual currency industry will depend on a 
variety of factors, including the type of business involved, 
its size and sophistication, the products and services offered, 
its customers and counterparties, and the geographic locations 
served.

Q.4. Is there a potential for using blockchain technology to 
trace sanctions-evading actions and map out illicit finance 
systems and networks more effectively?

A.4. Treasury uses a variety of tools in furtherance of 
investigations, compliance, enforcement, and regulatory 
actions. Blockchain technology is one of the tools used to 
support these efforts.

Q.5. How would economic turmoil, specifically rising inflation 
which could result in a rapid increase in food prices, affect 
Afghanistan's women in Kabul as well as the poorest, most rural 
parts of the country?
    What strategy or combination of the strategies would work 
best to mitigate hardship and decrease the ability of the 
Taliban to access aid and development funds?

A.5. The United States remains deeply concerned by the 
deteriorating humanitarian situation in Afghanistan. After 
years of war, Afghanistan's economy was impaired by enormous 
structural challenges, leaving the Afghan people to depend on 
international aid and remittances. International aid funded 
nearly 75 percent of Afghan public expenditures and represented 
about 40 percent of its GDP in the past few years.
    The United States is proud to be a longstanding supporter 
to the Afghan people, including as the largest single provider 
of humanitarian assistance, and we are looking at additional 
ways to support the needs of the Afghan people.
    Following the events of August 15, 2021, OFAC provided 
rapid guidance related to the provision of humanitarian 
assistance and the export of agricultural goods and medicine. 
This included providing verbal guidance regarding a 
nonenforcement posture with respect to activities and 
transactions that support evacuation efforts, humanitarian 
activities, and activities supporting critical infrastructure 
in Afghanistan, as well as personal remittances. OFAC also 
issued a specific license on August 25, 2021, to authorize the 
U.S. Government to facilitate humanitarian-related activity, 
the provision of humanitarian assistance, and other critical 
civilian assistance within Afghanistan. Subsequently, on 
September 24, 2021, consistent with the U.S. Government's long-
standing practice across Administrations of authorizing 
humanitarian-related transactions and activities that support 
basic human needs in territories affected by sanctions, OFAC 
issued two General Licenses (GLs), which explicitly authorize: 
(1) the United States Government, NGOs, and certain IOs and 
other entities (including the U.N. and World Bank) to provide 
humanitarian assistance to Afghanistan or other activities that 
support basic human needs in Afghanistan; and (2) the 
exportation or reexportation of agricultural commodities, 
medicine, medical devices, replacement parts, components for 
medical devices, or software updates for medical devices to 
Afghanistan.
    In addition, on December 10, 2021, OFAC issued a GL 
authorizing U.S. persons to engage in transactions that are 
ordinarily incident and necessary to the transfer of 
noncommercial, personal remittances to Afghanistan, including 
through Afghan depository institutions, that may involve the 
Taliban or the Haqqani Network, or any entity in which the 
Taliban or the Haqqani Network owns, directly or indirectly, 
individually or in the aggregate, a 50 percent or greater 
interest. Prior to the issuance of this GL, OFAC provided 
guidance to financial institutions to make sure that 
remittances could continue to flow to Afghanistan.
    For transactions not otherwise authorized by OFAC GLs, OFAC 
considers specific license requests on a case-by-case basis and 
prioritizes license applications, compliance questions, and 
other requests related to humanitarian support.

Q.6. How will the Treasury Department ensure that U.S. taxpayer 
dollars will not fall into the hands of the Taliban or other 
actors while providing aid to the Afghan civilian population?

A.6. OFAC continues to maintain and enforce expansive sanctions 
against the Taliban, and the State Department and USAID have 
risk mitigation strategies in place. Treasury is also taking 
action to deny assets to the Taliban and other sanctioned 
persons in Afghanistan, such as the Haqqani Network. Notably, 
the Taliban and Haqqani Network continue to be sanctioned as a 
Specially Designated Global Terrorists (SDGTs) pursuant to 
Executive Order 13224, as amended (E.O. 13224). Accordingly, 
all property or interests in property of the Taliban that are 
in the United States, that hereafter come within the United 
States, or that are or hereafter come within the possession or 
control of any United States person are blocked and may not be 
transferred, paid, exported, withdrawn, or otherwise dealt in. 
U.S. persons who violate these prohibitions may face civil or 
criminal liability.
    Furthermore, E.O. 13224 authorizes Treasury to impose 
sanctions against persons who materially assist, sponsor, or 
provide financial, material, or technological support for, or 
goods or services to or in support of, the Taliban, as well as 
foreign financial institutions that knowingly conduct or 
facilitate significant transactions on behalf of the Taliban. 
In addition, the general licenses (GLs) provided on September 
24, 2021, for humanitarian assistance and provision of basic 
human needs to Afghanistan include conditions designed to 
ensure that funds are not transferred directed to the Taliban 
or the Haqqani network as describe in the GLs.

Q.7. During the previous Administration, the U.S. developed a 
strained relationship with our closest allies and partners.
    How has this erosion of trust impacted our ability to 
conduct multilateral sanctions?

A.7. President Biden has made clear that our alliances and 
partnerships are among our strongest assets. This is why we 
have worked hard to rebuild these relationships over the course 
of this year. The United States is committed to multilateral 
diplomacy and strengthening coordination with allies and 
partners on sanctions. As outlined in the Sanctions Review, 
sanctions actions should be coordinated with our allies and 
partners abroad where possible. Our concerted effort to engage 
allies and partners in matters of sanctions coordination has 
been very well received, as evidenced by the increasing 
regularity with which they join our sanctions actions. 
Additionally, the Administration continues to engage closely 
with allies and partners to minimize any unintended effects of 
our sanctions actions on their economic interests.

Q.8. What remain some of our largest obstacles in conducting 
effective multilateral sanctions?

A.8. The Treasury and State Departments are working to expand 
existing multilateral coordination mechanisms to strengthen 
sanctions policy and implementation coherence, including with 
respect to information sharing and harmonizing sanctions 
authorities where possible, because these are two of the 
biggest obstacles to conducting effective multilateral 
sanctions. Australia's recent adoption of a Magnitsky-like 
sanctions program is an example of such harmonization. Both 
Treasury and State engaged significantly with Australian 
officials to help establish this program.

Q.9. In 2018, interpretive guidance was issued on cybersecurity 
disclosures. In June, the SEC took an enforcement action 
finding that 6 months was too long for a company to disclose a 
cyberattack.
    Do you feel that Treasury is well equipped to ensure that 
financial institutions and other market actors are not at risk 
of retaliatory ransomware attacks by sanctioned actors in 
places like Russia and Iran?

A.9. The Treasury Department works closely with regulatory 
agencies, financial institutions, and other market participants 
through bodies such as the Financial Banking and Information 
Infrastructure Committee and the Financial Services Sector 
Coordinating Council. We need better incident reporting in 
order to better protect the financial system and the entire 
economy, and we look forward to working with you and others in 
Congress on how we can enhance information sharing.
    On November 18, 2021, the Office of the Comptroller of the 
Currency, the Board of Governors of the Federal Reserve System, 
and the Federal Deposit Insurance Corporation issued a final 
rule that requires any financial institution subject to their 
respective jurisdictions to notify its primary Federal 
regulator of any ``computer security incident'' that rises to 
the level of a ``notification incident,'' as those terms are 
defined in the Final Rule, as soon as possible and no later 
than 36 hours after the institution determines that a 
notification incident has occurred.
    As the Sector Risk Management Agency for the financial 
services sector, Treasury seeks to improve baseline protections 
throughout the sector, facilitate information sharing, support 
incident management, and identify, assess, and prioritize 
risks, among other activities. Treasury supports incident 
reporting legislation that would require financial-sector 
entities to report ransomware attacks and other cybersecurity 
incidents to the Department of Homeland Security and Treasury 
within 24 hours, as well as processes to streamline and 
harmonize reporting for entities that face multiple reporting 
requirements. Such reporting would enable Treasury to increase 
the sector's situational awareness of retaliatory and other 
cyberattacks and would help inform other U.S. Government 
agencies' actions to deter and disrupt such attacks.

Q.10. What can we do to ensure the Treasury Department is 
appropriately equipped to ensure proper protections for our 
economy from malicious cyberactors?

A.10. The Treasury Department supports modernization of its 
technology and innovations for its cyberworkforce to protect 
its operations and tools and to improve the financial sector's 
resilience. Treasury faces growing workforce challenges, 
primarily in the area of compensation, given resource and pay 
limitation constraints.
                                ------                                


        RESPONSES TO WRITTEN QUESTIONS OF SENATOR SINEMA
                       FROM WALLY ADEYEMO

Q.1. Money laundering and terrorist financing remains a threat 
to Arizona's safety and security. Sanctions are sometimes used 
to deter foreign Governments from funding organizations that 
carry out criminal or terrorist activities that threaten our 
national security. How do you assess the effectiveness of the 
current sanctions process in preventing financing of illicit 
organizations? What proposed changes to the current sanctions 
process will make its use more effective in deterring illicit 
financing?

A.1. We have had some notable success disrupting the financial 
networks supporting a range of illicit and malign actors. For 
example, in coordination with U.S. and foreign law enforcement 
action, Treasury froze and seized billions of dollars in assets 
from front companies used by the Cali Cartel (at one point the 
world's largest drug trafficking organization), culminating in 
the 2014 dismantling of the cartel and the arrest and 
imprisonment of its leaders. U.S. sanctions so significantly 
impaired Hizballah funding streams that in 2019 the 
organization had to reduce salaries for its military arm and 
media efforts and publicly solicit donations.
    To enhance our sanctions and ensure they remain a critical 
tool of U.S. foreign policy, the Sanctions Review identified 
the following key recommendations:

    Adopt a structured policy framework;

    Renew our commitment to multilateralism;

    Calibrate sanctions to mitigate unintended impact;

    Ensure sanctions are easily understood, 
        enforceable, and adaptable; and

    Invest in modernizing our sanctions technology, 
        workforce, and infrastructure.

Q.2. While sanctions issued by Treasury are meant to change the 
behavior of a foreign Nation or of an organization, these 
sanctions can also have unintended consequences for Arizona-
based and other U.S.-based businesses. In reviewing the 
sanctions process, did Treasury examine the effects of 
sanctions on small businesses that depend on imports from 
sanctioned Nations or on exports to these Nations? What changes 
can be made to the sanctions process to minimize unintended 
consequences for Arizona businesses?

A.2. During the review, Treasury heard from some private sector 
stakeholders about the compliance costs that can be imposed on 
small businesses, which may lack the resources to bear these 
costs while competing with large companies at home and abroad. 
A first step is to make compliance simpler for businesses and 
people who can't afford armies of lawyers and accountants. That 
means communicating and providing guidance in simple, plain 
language. It also means updating our website and technology to 
ensure these communications are accessible to businesses of all 
sizes.
    Treasury can also expand engagement with small- and medium-
sized businesses, particularly exporters. Additionally, 
applying a strategic and targeted approach to sanctions, 
including a thorough analysis of market impacts and sufficient 
time to develop mitigation measures, will help avoid 
unnecessarily cutting off U.S. businesses from key export 
markets or suppliers.

Q.3. The SWIFT system is the most widely used interbank 
messaging network globally. The SWIFT system offers certain 
financial crime compliance services to assist financial 
institutions in complying with national and international 
regulations, including sanctions. In 2015, China's Government 
launched the Cross-Border Interbank Payment System (CIPS) as an 
alternative to SWIFT to settle international claims in yuan. 
How does the development of alternatives to SWIFT impact the 
implementation of Treasury sanctions?

A.3. As noted in the Sanctions Review report, technological and 
structural changes in the global financial system could have a 
profound impact on the efficacy of American sanctions. This 
includes the development of new financial and payments systems 
that may have the effect of, among other things, evading 
sanctions and diminishing the dollar's global role. Over the 
long term, these could reduce the economic leverage and 
benefits afforded by the prominent role of the U.S. dollar and 
U.S. financial institutions in global funds transfers and a 
wide range of economic and financial activity.
    This is one of several reasons to take a thoughtful and 
judicious approach to the use of sanctions, including by 
applying a consistent policy framework, analyzing potential 
unintended consequences, multilateralizing sanctions actions 
where possible, modernizing our operational capabilities, and 
making commensurate investments in our workforce to drive the 
effective and tailored use of sanctions now and in the future.

Q.4. Over the last decade, we have witnessed the rise of 
innovative decentralized finance (DeFi) products such as 
cryptocurrencies and nonfungible tokens, the majority of which 
utilize blockchain technology to complete and record 
transactions. How does the growing popularity of DeFi products, 
including by illicit organizations and other bad actors, affect 
the implementation and effectiveness of sanctions? Do the 
transaction records provided by blockchain technology aid in 
tracking and deterring activity affected by Treasury sanctions?

A.4. Depending on how it is implemented, blockchain technology 
can increase the overall transparency of transactions in some 
cases, including by creating a permanent virtual paper trail, 
and can improve regulatory reporting, record keeping, and 
monitoring. This is also true for decentralized finance (DeFi) 
products that use public blockchains, as opposed to those that 
use private blockchains where certain elements of transactions 
may be hidden.
    In the context of illicit finance, blockchain technology 
can be viewed as an obstacle for criminals who want to remain 
anonymous and disguise the original source of funds. We have 
already seen numerous instances where law enforcement and 
regulators successfully conducted blockchain analytics to 
``follow the money'' and either stop or impose costs on illicit 
actors, as well as recover significant amounts of illicit 
proceeds. For instance, the IRS recently announced that it 
recovered billions of dollars in cryptocurrency this past year. 
OFAC has also listed digital currency wallets as identifiers 
associated with designated persons on the specially designated 
nationals list to help financial institutions and block 
transactions associated with designated persons; transactions 
associated with these wallets can often be traced using 
blockchain analytics platforms, leading to more regulatory 
reporting and law enforcement action. Like any other asset, 
digital assets can be used for illicit purposes, including 
sanctions evasion, but the unique characteristics of 
blockchains may allow for better after-the-fact investigations 
into illicit activity, including sanctions evasion.
    However, the use of public blockchains alone will not 
prevent fraud, money laundering, or the financing of terrorism, 
especially given the pseudonymity and sometimes anonymity-
enhanced features programmed into many existing blockchains. 
Both FinCEN and OFAC have issued guidance to help financial 
institutions, and in particular virtual asset service providers 
(VASPs), which may include persons and entities involved in 
DeFi arrangements, navigate, and comply with their AML/CFT 
obligations, including those related to OFAC sanctions. 
Blockchain technology has upsides and downsides, and Treasury 
seeks to maximize blockchain technology's benefits and mitigate 
its risks.

Q.5. This review of the sanctions process resulted in several 
recommendations for reforms. How will Treasury implement these 
recommendations to further the goal of integrated deterrence? 
Will Treasury move to collaborate further with other 
departments and agencies, as well as international Governments 
and organizations, to strengthen the effectiveness of the 
sanctions process?

A.5. As noted in the report, some of these recommendations can 
be implemented in the near-term by internal policy or 
procedural changes, while others will require further 
deliberation and analysis. We look forward to coordinating 
closely with key interagency partners, such as the National 
Security Council, the Office of Management and Budget, the 
Department of State, U.S. Agency for International Development, 
Department of Justice, and others, as well as Congress, in 
making needed changes and investments in future sanctions 
capabilities.
                                ------                                


        RESPONSES TO WRITTEN QUESTIONS OF SENATOR ROUNDS
                       FROM WALLY ADEYEMO

Q.1. Mr. Adeyemo, it has been claimed the cost burden of the 
Administration's proposed IRS tax reporting requirement would 
fall squarely on financial institutions, not taxpayers. I 
cannot see how that is possibly the case. This proposed 
reporting requirement would significantly expand Form 1099 
reporting to include millions of accounts not currently subject 
to reporting. Each Form 1099 contains highly personal 
information, including the account holder's name, address, and 
taxpayer identification number. Given that this new information 
will be used specifically for audit detection, combined with 
the fact that the low-income taxpayers are among the groups 
most likely to get audited, it is highly likely that new tax 
preparation procedures will be needed, resulting in additional 
costs to both average taxpayers, as well as small business 
owners who often conduct both personal and business 
transactions within the same account.
    As such, with the above in mind, how can the Administration 
claim that there will be no additional burden for taxpayers? 
Further, are you confident in the ability of the IRS to 
securely handle this massive additional influx of confidential 
data?

A.1. The bank reporting proposal was designed to minimize any 
costs for financial institutions associated with providing this 
information to the IRS. Our ambition is that financial 
institutions will be our partners in ensuring America's tax 
system is equitable, efficient, and effective--one in which 
everyone follows the law and pays their fair share--and that 
their customers are not disadvantaged by others who skirt tax 
laws.
    Under the proposal, compliant taxpayers would report their 
taxes as usual, and they would face lower audit probabilities 
if the IRS had access to information that allowed them to 
better target audits toward those evading tax.
    Indeed, rather than be burdened by a new reporting regime, 
compliant taxpayers would benefit from it: When the IRS 
determines who to audit today, it is essentially shooting in 
the dark, since it has no lens into opaque income streams that 
allow it to ascertain which taxpayers may be skirting their tax 
liabilities and which taxpayers are likely fully compliant. 
Honest small business owners--who are the vast majority--would 
benefit from the IRS's ability to better target enforcement 
actions against those who are evading their tax obligations.

Q.2. Mr. Adeyemo, the Treasury Greenbook explicitly states that 
it would look to obtain certain transaction-level data through 
an information return. Yet, the Secretary, as recent as last 
week, stated emphatically they are not looking for transaction-
level information. Can you confirm for us if the Administration 
is no longer supporting the financial account reporting 
proposal as described in the Green Book?

A.2. We support the proposals that Congress has considered in 
this space, and all financial reporting proposals considered by 
Congress do not mandate that individual transactions of any 
amount be reported to the IRS. Instead, the proposals direct 
banks to report basic, high-level information on aggregate 
account inflows and outflows.

Q.3. The United States holds 16.5 percent of the vote at the 
IMF, and will need significant support from other countries to 
keep billions in loans out of the Taliban's hands. Does the 
Administration support keeping international funding from the 
Taliban, and if so, how can the United States work 
diplomatically to build the global support it would need to 
keep international funding away from the Taliban?

A.3. The IMF has paused its interactions with Afghan 
authorities due to the lack of clarity among IMF members 
regarding the governance of Afghanistan. As a consequence, 
Afghanistan's access to IMF resources, including its SDRs, is 
on hold. In situations such as this, the IMF staff consults 
with IMF membership to determine whether a majority of the 
voting interest of the members recognize or deal with a regime. 
The United States will continue to engage closely with the IMF 
management and staff throughout this process to help safeguard 
Afghanistan's resources for its people.

Q.4. Some people believe that the Taliban is moderating its 
behavior, and that it is doing so to be recognized as the 
legitimate Government of Afghanistan. What I see is an 
organization that has changed little since the late 1990s. It 
has already shown its commitment to oppress and marginalize 
women and ethnic minorities, and to work closely with al Qaeda. 
That isn't speculation. A recent report commissioned by the 
U.N. Security Council found that al Qaeda was currently active 
in nearly half of Afghanistan's provinces. Another U.N. report 
found that the Taliban regularly consulted with al Qaeda during 
negotiations leading to the Doha Agreement with the Trump 
administration. At that time, the Taliban guaranteed to al 
Qaeda that they would honor their historical ties.
    Do you believe that if the United States offers the Taliban 
recognition as the legitimate Government of Afghanistan, and 
offers economic sanctions relief, that the Taliban will cut its 
ties with al Qaeda and moderate its positions on women and 
ethnic minorities?

A.4. For questions on any engagement or dealings with the 
Taliban, we refer you to the Department of State.

Q.5. Do you believe that sanctions relief for the Taliban makes 
the Afghan and American people safer, or less safe?

A.5. Treasury shares your concerns about the activities of the 
Taliban in Afghanistan. As noted above, the Taliban continue to 
be sanctioned as an SDGT pursuant to E.O. 13224. For questions 
on any changes to the status of the Taliban under E.O. 13224, 
we refer you to the Department of State. Treasury continues to 
maintain and enforce expansive sanctions against the Taliban.
    These expansive sanctions include the prohibition on U.S. 
persons with regard to all property or interests in property of 
the Taliban that are in the United States, that hereafter come 
within the United States, or that are or hereafter come within 
the possession or control of any United States person, which 
are blocked and may not be transferred, paid, exported, 
withdrawn, or otherwise dealt in. U.S. persons who violate 
these prohibitions may face civil or criminal liability.
    These expansive sanctions also include secondary sanctions 
against persons who materially assist, sponsor, or provide 
financial, material, or technological support for, or goods or 
services to or in support of, the Taliban, as well as foreign 
financial institutions that knowingly conduct or facilitate 
significant transactions on behalf of the Taliban.
    Additionally, OFAC has designated 19 Afghanistan-related 
drug traffickers and entities linked to the Taliban under our 
counter narcotics trafficking sanctions.
                                ------                                


        RESPONSES TO WRITTEN QUESTIONS OF SENATOR TILLIS
                       FROM WALLY ADEYEMO

Q.1. The Treasury 2021 Sanctions Review report notes:

        In addition, technological innovations such as digital 
        currencies, alternative payment platforms, and new ways 
        of hiding cross-border transactions all potentially 
        reduce the efficacy of American sanctions. These 
        technologies offer malign actors opportunities to hold 
        and transfer funds outside the traditional dollar-based 
        financial system. They also empower our adversaries 
        seeking to build new financial and payments systems 
        intended to diminish the dollar's global role. We are 
        mindful of the risk that, if left unchecked, these 
        digital assets and payments systems could harm the 
        efficacy of our sanctions.

    Your report appropriately characterizes the risk that our 
adversaries are deploying technologies to ``work around'' U.S. 
sanctions. Can you elaborate on the specific concerns as 
pertains to digital assets and payments systems?

A.1. Virtual assets can be used for illicit activity through 
peer-to-peer exchangers, anonymity enhancement technologies, 
and noncompliant exchanges. Some evaders may seek to transact 
in virtual assets to avoid the sanctions enforcement that comes 
with the international banking system, especially the use of 
the U.S. dollar. This includes the facilitation of sanctions 
evasion, ransomware schemes, and other cybercrimes.
    Sanctions work best when compliance works. Those in the 
virtual asset industry play a critical role in implementing 
appropriate AML/CFT and sanctions controls to prevent 
sanctioned persons and other illicit actors from exploiting 
virtual currencies to undermine U.S foreign policy and national 
security interests. Additionally, under the U.S. Presidency, 
the Financial Action Task Force (FATF) in June 2019 amended its 
standards to recommend that all countries regulate and 
supervise virtual asset service providers (VASPs) and mitigate 
against such risks when engaging in virtual asset transactions.
    The United States is committed to continued work at the 
FATF and with other countries to implement the FATF standards, 
and we welcome the FATF's ongoing work on this issue.

Q.2. One of the important international initiatives advanced by 
Treasury in the previous Administration was promoting data 
connectivity in financial services. As you know, data flows are 
critical to secure and efficient operations in this sector, and 
support innovation and choice in financial services for small 
businesses and workers. Will you commit to maintaining 
Treasury's global push for data connectivity in financial 
services, including through bilateral dialogues and in any new 
agreements negotiated by USTR?

A.2. Treasury continues to support policies that further the 
growth of the global digital economy, including promoting 
cross-border data connectivity in financial services. My team 
and I engage regularly with a wide range of jurisdictions in 
regulatory and trade dialogues on the importance of cross-
border data flows in financial services to economic growth, 
financial innovation, fraud prevention, financial stability, 
AML/CFT compliance, and operational resilience.
                                ------                                


       RESPONSES TO WRITTEN QUESTIONS OF SENATOR HAGERTY
                       FROM WALLY ADEYEMO

Q.1. The recent reports about the Chinese Communist Party's 
(CCP's) hypersonic military capabilities, if true, are very 
concerning. Will the Biden administration consider restricting 
financial access to entities that are funding to the CCP's 
development of weapons that pose existential threats to the 
United States?

A.1. We cannot comment on possible or pending sanctions 
actions.

Q.2. North Korea continues to produce nuclear weapons and 
conduct provocative missile tests. It is critical for the 
United States to build on the maximum pressure campaign that 
began under the Trump administration. Should the Treasury 
Department continue to apply pressure by designating entities 
and individuals that violate U.S. law?

A.2. The Department of the Treasury shares your concern 
regarding North Korea's recent missile tests. With interagency 
partners, the Treasury Department continues to pursue a range 
of options to address the threat DPRK poses to U.S. national 
security, including diplomacy and targeted pressure measures. 
We will continue to administer and enforce all our sanctions 
authorities with respect to North Korea.

Q.3. Will the Biden administration continue to put financial 
pressure on China, including pursuing enforcement against it if 
it is found to be violating sanctions imposed on Iran?

A.3. Treasury has used our sanctions authorities to respond to 
Iranian sanctions evasion, including those doing business with 
China, and will continue to do so wherever appropriate. U.S. 
sanctions on Iranian oil and petrochemicals remain fully in 
place. We will continue to enforce them together with our 
allies and partners around the world until and unless Iran 
chooses a path of diplomacy and a path to a mutual return to 
compliance with the JCPOA.

Q.4. I continue to be very concerned about the Biden 
administration's actions toward Russia and in particular not 
sanctioning entities involved in Nord Stream 2. What risks do 
you assess the pipeline poses to the energy security of Ukraine 
and Eastern Europe?

A.4. Treasury remains committed to implementing sanctions 
imposed under PEESA, including most recently in November 2021. 
However, sanctions are just one element to counter Russia's 
attempts in this space. It is essential to work with our allies 
and partners to reduce vulnerabilities that Russia has long 
exploited for energy coercion, as well as reforms that would 
improve the viability and efficiency of Ukraine's energy sector 
and reduce Russia's ability to manipulate energy infrastructure 
for political gain. Such efforts are underway by the Treasury 
and State Departments.

Q.5. The Biden administration's Treasury has been advocating 
for a global minimum corporate tax rate and tax increases here 
at home. Realistically, when do you think the OECD will fully 
implement their Pillar II minimum corporate tax rate? Why 
should the United States unilaterally disarm by raising taxes 
on American job creators--thereby reducing job creation, 
opportunity, and wages for American workers--before other 
countries we compete with firmly do? Aren't we standing way out 
on a wobbly limb hoping the branch doesn't break, while 
everyone else sits in the middle of the tree?

A.5. We expect other Nations to move quickly to implement the 
model rules of Pillar Two, which are in their final draft. The 
agreement commits countries to do this in 2022, with the rules 
coming into force in 2023, just like the House draft 
legislation brings the GILTI changes into effect in 2023.

Q.6. During her testimony on September 28, 2021, Secretary 
Yellen and I discussed how my constituents are very concerned 
about the ability of the IRS to keep their tax information 
confidential. As you know, the Biden administration is 
proposing to expand reporting of private citizens' bank 
transactions to the IRS--which places an increased burden on 
our community lenders and will cause a lot of Americans to 
remove their money from them. Can you update the Committee on 
the additional steps you have taken to safeguard Americans' 
private tax information from politicized and criminal leaks? 
Can you assure the Committee that Treasury is doing everything 
it can to find the criminal perpetrators of the leaked 
information to ProPublica? Can you update the Committee on the 
additional steps you have taken to safeguard Americans' private 
tax information from politicized leaks by the IRS?

A.6. Both Secretary Yellen and I are deeply troubled by any 
unauthorized disclosure of taxpayer information, which is a 
crime. The Secretary has referred the matter to the appropriate 
authorities. We still do not know what occurred, but work is 
being done to get to the bottom of this criminal activity. As 
we learn more, we will update Congress as appropriate.

Q.7. The Office of the Comptroller of the Currency (OCC) is an 
independent bureau within the Treasury Department. It regulates 
and supervises over 1,100 banks and savings associations that 
hold more than two-thirds of all U.S. commercial banking 
assets. President Biden recently nominated Dr. Saule Omarova to 
lead the OCC. Forget about a $600 or a $10,000 threshold for 
reporting bank accounts and transactions to the IRS. Dr. 
Omarova has argued that an effect option to expand the Federal 
Reserve's role in the economy would be to transition each and 
every single private bank deposit to the Federal Reserve. Do 
you agree with her position to effectively end private banking?

A.7. Dr. Omarova testified before the Senate Committee on 
Banking, Housing, and Urban Affairs on November 18, 2021, and 
stated that she does not want to end ``banking as we know it,'' 
in response to a question posed by Chairman Brown. Furthermore, 
on December 7, 2021, President Biden accepted Dr. Omarova's 
request to withdraw her name from nomination to be Comptroller 
of the Currency.
              Additional Material Supplied for the Record

        U.S. DEPARTMENT OF THE TREASURY SANCTIONS REVIEW RELEASE

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                   THE TREASURY 2021 SANCTIONS REVIEW

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