Russia and Belarus Sdr Exchange Prohibition Act of 2022

Floor Speech

BREAK IN TRANSCRIPT

Mr. HILL. Madam Speaker, I yield myself such time as I may consume.

Madam Speaker, I rise today in support of my legislation being considered here on the House floor, the Russia and Belarus SDR Exchange Prohibition Act, H.R. 6899.

This legislation would prohibit the United States from exchanging any Special Drawing Rights, or SDRs, with Russia or Belarus. These SDRs are reserve assets issued by the International Monetary Fund, the IMF.

This bill would also require the Secretary of the Treasury to work with other IMF member countries to prevent them from doing the same.

Now, let's be blunt. We should be especially concerned by Russia's ability to exchange its SDRs for Chinese renminbi or pledge their SDRs for a loan that isn't transparent to the world in support of Russia's illegal invasion by a country such as China, using those reserve assets.

This is a particular risk, as Moscow is increasingly forced to potentially turn to China in response to global sanctions imposed on the nation of Russia and its central bank. Mr. Speaker, the world is watching, and we must send a message that the United States is not standing idly by and allowing SDR assets to be used to finance the destruction of Ukraine.

Russia alone owns over $25 billion of these IMF reserve assets, and these IMF assets represent unconditional liquidity and a source of financing for the Kremlin. It is important to note that of that $25 billion of SDR assets on the books of the Russian central bank, more than $17 billion of it was just recently gifted to czar Putin last year, through the Biden administration's $650 billion green-lighting of a general SDR allocation by the IMF.

Nearly a billion dollars in SDRs were also awarded to Belarus last year, a move that our colleagues from the bipartisan Friends of Belarus Caucus warned would be rewarding state-sponsored violence against civilians.

Now, Mr. Speaker, on this House floor, in our committee, and in many other forums over many months, I urged Treasury Secretary Yellen and the administration not to pursue this flawed policy. There were superior policy choices with an eye to benefiting the poorest nations on our globe that have had the hardest macroeconomic impact as a result of COVID-19, superior policy choices, far superior to an across-the- board general allocation, because not only do wealthy countries get that allocation and the poor countries get it, but the foes of freedom get the allocation. We are back on this House floor today talking about the ramifications of when that happens. Two foes of freedom today, no doubt, are Belarus and Russia.

My warnings came long before the invasion of Ukraine began, but those warnings were not heeded. Today, we come to the House floor united as a bipartisan leadership team saying under no circumstances should the central banks of Belarus and Russia in any way, shape, or form have access to their special drawing rights, pledge their special drawing rights, or exchange their special drawing rights, and we once again urge our Treasury Secretary to put up the guardrails, lay those rules of the road out, prohibit anyone who is a member of the IMF from doing likewise. That work with our allies at the IMF is critical to ensure that China or some other nation doesn't throw Vladimir Putin an SDR lifeline.

Passing this bill, too, sends a clear signal to Beijing that the United States will not tolerate such a move, and I would argue our European Transatlantic partners would not tolerate such a move.

This bill also requires the administration to oppose conventional loans to Russia or Belarus if they approach the IMF as a lender of last resort. This is important, because as we seek to exert maximum pressure against these regimes, we cannot, as Mr. Sherman talked about a few minutes ago, allow loopholes to be exploited for potential assistance from the IMF.

H.R. 6899 presents a clear choice to Russia and Belarus: End the destabilizing activities in Ukraine or find yourself shut off from emergency liquidity just like on this floor we have talked about shutting off diplomatic efforts at global responsibility.

I conclude my comments by thanking Chair Waters and her Democratic colleagues for their support of this bill and her work on this bill and her recognition of what a tragedy a backdoor bailout of Russia by others using central bank assets would be.

We will continue to find a way to deprive Russia of cash and financing as it continues to wage war in Ukraine. H.R. 6899 is a strong step in that direction. I urge my colleagues to support the bill, and I reserve the balance of my time.

As Russia continues to wage war on Ukraine, this body, on a bipartisan basis, will continue to ensure that we are using all the levers to exert and utilize maximum pressure, maximum lethal assistance pressure to Ukraine, maximum diplomatic pressure through isolating Russia in international organizations, and maximum economic pressure that we are talking about on this floor, of which H.R. 6899 is one cog in that wheel.

Mr. Speaker, I also want to thank U.S. Senators Rick Scott and Joe Manchin, who have introduced the companion legislation to H.R. 6899 in the U.S. Senate.

I look forward to this becoming law soon. I urge all my colleagues to support the Russia and Belarus SDR Exchange Prohibition Act, and I yield back the balance of my time.

BREAK IN TRANSCRIPT

Source