The senators stated that this legislation would prevent the Russian Federation from buying gold. It also closes the loophole that allows Russia to reduce the financial consequences of sanctions. We can further isolate Russia and make it more difficult for Putin to carry out his increasingly costly military campaign by sanctioning these reserves.
US Lawmakers Want to Sanction Russia's Golden
Senator King tweeted, "The sanctions of the free world are devastating Russia's economic -- and as long Putin continues his horrendous invasion, we must continue to press the pressure." He said that he had joined Senators Cornyn and Hassan to "introduce sanctions against Russia's gold reserve."
He explained in a follow-up tweet:
Russia's gold reserves are one of Putin's few remaining assets to support his country's economy. We can further isolate Russia and make it more difficult for Putin to wage his increasingly costly military campaign by sanctioning these gold reserves.
Senator Cornyn said: "Russia has taken the page from Venezuela's book by exploiting an exemption in current sanctions that allows it to launder money through purchase and sale gold."
According to the senators, "The Russian Federation is buying gold to offset its currency's devaluation, the ruble. Then, it is selling that gold on international market in exchange for high-value currency."
The bill would apply secondary sanctions to anyone who transacts with or transports gold from Russia's central banks holdings or sells gold physically or electronically in Russia," according to the announcement.
This legislation contains secondary sanctions that would discourage the purchase of Russian gold. It also closes the loophole that allows Russia to reduce the financial consequences of sanctions.
Senator Hagerty stated that "These bipartisan secondary sanctions against Russia's gold transactions will add to the Biden administration’s recent Russia sanctions, and further choke Russia's economy capital."
A number of senators are worried about Russia using cryptocurrency to evade sanctions.
Both the G7 and the European Union already stated that they have taken measures to stop cryptocurrency being used to evade sanction. The U.S. Treasury Department also stated that it monitors crypto activities in order to prevent sanctions evasion.
A number of experts, including Binance CEOs, have stated that cryptocurrency is not a good tool to bypass Russian sanctions.
Carol House, director of cybersecurity at the National Security Council, agreed. She stated that "the Russian state would have to succeed in circumventing all U.S. financial sanctions and those of its partners would almost certainly render crypto an ineffective primary tool for them."