WASHINGTON—United States Senator Bill Hagerty (R-TN), a member of the Senate Foreign Relations and Banking Committees, has joined United States Senators John Cornyn (R-TX), Maggie Hassan (D-NH), and Angus King (I-ME) in introducing the Stop Russian Government and Oligarchs from Limiting Democracy (Stop Russian GOLD) Act, which would apply secondary sanctions to anyone transacting with or transporting gold from Russia’s central bank holdings or selling gold physically or electronically in Russia.
“Because Russia is intent on using any loophole it can find to get around the economic sanctions of the United States and our allies, Congress must make it harder for Putin to liquidate Russia’s gold and use those proceeds to fund its invasion of Ukraine,” said Senator Hagerty. “These bipartisan secondary sanctions on Russia’s gold transactions will build on the Biden Administration’s recent Russia sanctions and further choke off Russia’s economy from capital.”
“Russia has taken a page out of Venezuela’s book by exploiting a loophole in current sanctions that allows them to launder money through the purchase and sale of gold,” said Senator Cornyn. “This legislation would apply secondary sanctions to parties who help Russia finance their war by buying or selling this blood gold.”
“With Russia’s economy in freefall, we need to make sure that Putin can’t circumvent our sanctions,” said Senator Hassan. “This bipartisan bill closes a critical loophole that allows Russia to sell off its gold reserves to prop up its economy. The U.S. and our allies must be steadfast in standing up to Russian aggression and ensure that we block any escape hatch Putin has in getting around the full weight of our sanctions.”
“The free world’s sanctions are devastating Russia’s economy – and as long as Putin continues his unprovoked and horrific invasion of Ukraine, we must keep up the pressure,” said Senator King. “Russia’s massive gold supply is one of the few remaining assets that Putin can use to keep his country’s economy from falling even further. By sanctioning these reserves, we will further isolate Russia from the world’s economy and increase the difficulty of Putin’s increasingly-costly military campaign. We urge the speedy passage of these bipartisan sanctions to hold Putin accountable for his crimes.”
Currently, Russia is exploiting a loophole in the sanctions placed on its central bank that are allowing the government and oligarchs to launder money through gold. The Russian Federation is purchasing gold to offset the devaluation of its currency, the ruble, and is then selling that gold on international markets in exchange for high-value currency.
The secondary sanctions in this legislation would deter the purchase of Russian gold and close this loophole that allows the Russian Federation to soften the financial impact of sanctions.