[House Report 117-319]
[From the U.S. Government Publishing Office]


117th Congress    }                                   {Rept. 117-319
                        HOUSE OF REPRESENTATIVES
 2d Session       }                                   {   Part 1

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



 
               RUSSIA AND BELARUS FINANCIAL SANCTIONS ACT

                                _______
                                

  May 10, 2022.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

  Ms. Waters, from the Committee on Financial Services, submitted the 
                               following

                              R E P O R T

                        [To accompany H.R. 7066]

    The Committee on Financial Services, to whom was referred 
the bill (H.R. 7066) to require United States financial 
institutions to ensure entities and persons owned or controlled 
by the institution comply with financial sanctions on the 
Russian Federation and the Republic of Belarus to the same 
extent as the institution itself, and for other purposes, 
having considered the same, reports favorably thereon with an 
amendment and recommends that the bill as amended do pass.

                                CONTENTS

                                                                   Page
Purpose and Summary..............................................     2
Background and Need for Legislation..............................     2
Section-by-Section Analysis of the Legislation...................     3
Hearings.........................................................     3
Committee Consideration..........................................     3
Committee Votes..................................................     3
Committee Oversight Findings.....................................     5
Statement of Performance Goals and Objectives....................     5
New Budget Authority and C.B.O. Cost Estimate....................     5
Committee Cost Estimate..........................................     5
Federal Mandates Statement.......................................     5
Advisory Committee Statement.....................................     5
Applicability to Legislative Branch..............................     5
Congressional Earmarks, Limited Tax Benefits, and Limited Tariff 
  Benefits.......................................................     5
Duplicative Federal Programs.....................................     6

    The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Russia and Belarus Financial Sanctions 
Act of 2022''.

SEC. 2. REQUIREMENTS.

  (a) In General.--A United States financial institution shall take all 
actions necessary and available to cause any entity or person owned or 
controlled by the institution to comply with any provision of law 
described in subsection (b) to the same extent as required of a United 
States financial institution.
  (b) Provision of Law Described.--A provision of law described in this 
subsection is any prohibition or limitation described in a sanctions-
related statute, regulation or order applicable to a United States 
financial institution concerning the Russian Federation or the Republic 
of Belarus, involving--
          (1) the conduct of transactions;
          (2) the acceptance of deposits;
          (3) the making, granting, transferring, holding, or brokering 
        of loans or credits;
          (4) the purchasing or selling of foreign exchange, 
        securities, commodity futures, or options;
          (5) the procuring of purchasers and sellers described under 
        paragraph (4) as principal or agent; or
          (6) any other good or service provided by a United States 
        financial institution.
  (c) Penalty.--A United States financial institution that violates 
subsection (a) shall be subject to the penalties described in the 
applicable statute, regulation or order applicable to a United States 
financial Institution.
  (d) United States Financial Institution Defined.--In this section, 
the term ``United States financial institution'' means any U.S. entity 
(including its foreign branches) that is engaged in the business of 
accepting deposits, making, granting, transferring, holding, or 
brokering loans or credits, or purchasing or selling foreign exchange, 
securities, futures or options, or procuring purchasers and sellers 
thereof, as principal or agent. It includes depository institutions, 
banks, savings banks, money services businesses, operators of credit 
card systems, trust companies, insurance companies, securities brokers 
and dealers, futures and options brokers and dealers, forward contract 
and foreign exchange merchants, securities and commodities exchanges, 
clearing corporations, investment companies, employee benefit plans, 
dealers in precious metals, stones, or jewels, and U.S. holding 
companies, U.S. affiliates, or U.S. subsidiaries of any of the 
foregoing. This term includes those branches, offices, and agencies of 
foreign financial institutions that are located in the United States, 
but not such institutions' foreign branches, offices, or agencies.

                          PURPOSE AND SUMMARY

    On March 11, 2022, Representative Sherman introduced H.R. 
7066, the ``Russia and Belarus Financial Sanctions Act of 
2022,'' which would clarify that U.S. financial institutions 
that are obligated to comply with various sanctions against 
Russia and Belarus, must take all necessary and available 
actions to ensure that any entity it owns or controls, 
including any foreign subsidiaries, comply with the sanctions.

                  BACKGROUND AND NEED FOR LEGISLATION

    On February 24, 2022, Russian President Vladimir Putin 
launched an unprovoked, illegal invasion of Ukraine. Beginning 
on February 21, 2022, the U.S. has worked with its allies to 
impose a wide range of sanctions, prohibitions, restrictions, 
and bans on Russia and Belarus. Many U.S. economic sanctions 
that apply to Russia and Belarus typically require a ``U.S. 
person,'' including U.S. financial institutions, to comply with 
the mandate. However, there is ambiguity regarding the extent 
to which foreign subsidiaries of U.S. financial institutions 
are required to comply with the sanctions. This bill is 
intended to clarify and ensure all aspects of U.S. financial 
institutions implement the relevant sanctions against Russia 
and Belarus.

                      SECTION-BY-SECTION ANALYSIS

Section 1. Short title

           This section establishes the short title of 
        the bill as the ``Russia and Belarus Financial 
        Sanctions Act of 2022''.

Section 2. Requirements

           This section stipulates a U.S. financial 
        institution, as that term is defined in the Code of 
        Federal Regulations under section 561.309 of title 31, 
        must take all necessary and available actions to ensure 
        any entity owned or controlled by the financial 
        institution complies with relevant sanctions against 
        Russia and Belarus pursuant to another statute, 
        regulation or order. Such sanctions may include, for 
        example, limitations or prohibitions on transactions, 
        deposits, loans, securities, or providing any other 
        good or service.

                                HEARINGS

    For the purposes of section 3(c)(6) of House rule XIII, the 
Committee on Financial Services' Full Committee held a hearing 
on April 6, 2022 to consider H.R. 7066 entitled, ``The Annual 
Testimony of the Secretary of the Treasury on the State of the 
International Financial System.''

                        COMMITTEE CONSIDERATION

    The Committee on Financial Services met in open session on 
March 17, 2022 and ordered H.R. 7066 to be reported favorably 
to the House with an amendment in the nature of a substitute by 
a voice vote, a quorum being present.

                  COMMITTEE VOTES AND ROLL CALL VOTES

    In compliance with clause 3(b) of rule XIII of the Rules of 
the House of Representatives, the Committee advises that the 
following roll call votes occurred during the Committee's 
consideration of H.R. 7066: An amendment in the nature of a 
substitute, no. 2, offered by Mr. Sherman was AGREED TO by 
voice vote.

	
	
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  STATEMENT OF OVERSIGHT FINDINGS AND RECOMMENDATIONS OF THE COMMITTEE

    In compliance with clause 3(c)(1) of rule XIII and clause 
2(b)(1) of rule X of the Rules of the House of Representatives, 
the Committee's oversight findings and recommendations are 
reflected in the descriptive portions of this report.

             STATEMENT OF PERFORMANCE GOALS AND OBJECTIVES

    Pursuant to clause (3)(c) of rule XIII of the Rules of the 
House of Representatives, the goals of H.R. 7066 are to clarify 
that U.S. financial institutions that are obligated to comply 
with various sanctions against Russia and Belarus, must take 
all necessary and available actions to ensure that any entity 
it owns or controls, including any foreign subsidiaries, comply 
with the sanctions.

               NEW BUDGET AUTHORITY AND CBO COST ESTIMATE

    Pursuant to clause 3(c)(2) of rule XIII of the Rules of the 
House of Representatives and section 308(a) of the 
Congressional Budget Act of 1974, and pursuant to clause 
3(c)(3) of rule XIII of the Rules of the House of 
Representatives and section 402 of the Congressional Budget Act 
of 1974, the Committee has requested an estimate from the 
Director of the Congressional Budget Office. CBO was unable to 
provide an estimate in a timely manner.

                        COMMITTEE COST ESTIMATE

    Clause 3(d)(1) of rule XIII of the Rules of the House of 
Representatives requires an estimate and a comparison of the 
costs that would be incurred in carrying out H.R. 7066. After 
careful review, including discussions with the Congressional 
Budget Office, the Committee estimates that H.R. 7066 would 
have an insignificant impact on spending.

                       UNFUNDED MANDATE STATEMENT

    Pursuant to Section 423 of the Congressional Budget and 
Impoundment Control Act (as amended by Section 101(a)(2) of the 
Unfunded Mandates Reform Act, Pub. L. 104-4), the Committee 
adopts as its own the estimate of federal mandates regarding 
H.R. 7066, as amended prepared by the Director of the 
Congressional Budget Office.

                           ADVISORY COMMITTEE

    No advisory committees within the meaning of section 5(b) 
of the Federal Advisory Committee Act were created by this 
legislation.

              APPLICATION OF LAW TO THE LEGISLATIVE BRANCH

    Pursuant to section 102(b)(3) of the Congressional 
Accountability Act, Pub. L. No. 104-1, H.R. 7066, as amended, 
does not apply to terms and conditions of employment or to 
access to public services or accommodations within the 
legislative branch.

                           EARMARK STATEMENT

    In accordance with clause 9 of rule XXI of the Rules of the 
House of Representatives, H.R. 7066 does not contain any 
congressional earmarks, limited tax benefits, or limited tariff 
benefits as described in clauses 9(e), 9(f), and 9(g) of rule 
XXI.

                    DUPLICATION OF FEDERAL PROGRAMS

    Pursuant to clause 3(c)(5) of rule XIII of the Rules of the 
House of Representatives, the Committee states that no 
provision of H.R. 7066 establishes or reauthorizes a program of 
the Federal Government known to be duplicative of another 
federal program, a program that was included in any report from 
the Government Accountability Office to Congress pursuant to 
section 21 of Public Law 111-139, or a program related to a 
program identified in the most recent Catalog of Federal 
Domestic Assistance.

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