Russia and Belarus Sdr Exchange Prohibition Act of 2022

Floor Speech

BREAK IN TRANSCRIPT

Mr. GARCIA of Illinois. Madam Speaker, I move to suspend the rules and pass the bill (H.R. 6899) to prohibit the Secretary of the Treasury from engaging in transactions involving the exchange of Special Drawing Rights issued by the International Monetary Fund that are held by the Russian Federation or Belarus, as amended.

The Clerk read the title of the bill.

The text of the bill is as follows: H.R. 6899

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, SECTION 1. SHORT TITLE.

This Act may be cited as the ``Russia and Belarus SDR Exchange Prohibition Act of 2022''. SEC. 2. SPECIAL DRAWING RIGHTS EXCHANGE PROHIBITION.

(a) In General.--The Secretary of the Treasury may not engage in any transaction involving the exchange of Special Drawing Rights issued by the International Monetary Fund that are held by the Russian Federation or Belarus.

(b) Advocacy.--The Secretary of the Treasury shall--

(1) vigorously advocate that the governments of the member countries of the International Monetary Fund, to the extent that the member countries issue freely usable currencies, prohibit transactions involving the exchange of Special Drawing Rights held by the Russian Federation or Belarus and

(2) direct the United States Executive Director at each international financial institution (as defined in section 1701(c)(2) of the International Financial Institutions Act) to use the voice and vote of the United States to oppose the provision of financial assistance to the Russian Federation and Belarus, except to address basic human needs of the civilian population.

(c) Termination.--The preceding provisions of this section shall have no force or effect on the earlier of--

(1) the date that is 5 years after the date of the enactment of this Act; or

(2) 30 days after the date that the President reports to the Congress that the governments of the Russian Federation and Belarus have ceased destabilizing activities with respect to the sovereignty and territorial integrity of Ukraine.

(d) Waiver.--The President may waive the application of this section if the President reports to the Congress that the waiver is in the national interest of the United States and includes an explanation of the reasons therefor.
BREAK IN TRANSCRIPT

Mr. GARCIA of Illinois. Madam Speaker, I yield myself such time as I may consume.

Madam Speaker, I commend the gentleman from Arkansas (Mr. Hill) for his leadership on H.R. 6899, the Russia and Belarus SDR Exchange Prohibition Act of 2022.

Mr. Hill's legislation would codify the Biden administration's current position against exchanging any Special Drawing Rights, or SDRs, held by Russia or Belarus for U.S. dollars.

SDRs are a special reserve asset created by the International Monetary Fund to supplement the official reserves of its members. SDR allocations are distributed to all IMF member countries in proportion to their shareholding in the fund, and countries can hold their SDRs as part of their precautionary reserve balances or convert them for hard currency to finance balance of payments needs, pay for imports, adjust the composition of their reserves, or pay back IMF loans.

In August of 2021, the IMF issued a $650 billion general allocation of SDRs, of which $275 billion went to emerging market and developing countries to help transform the global pandemic crisis into a fair and resilient economic recovery.

Given the recent sanctions placed by the G7 group of nations against Russia's central bank and other Russian financial institutions, as well as the international sanctions against the banking sector in Belarus, it would be difficult for Russia or Belarus to find any country willing to convert their SDRs, especially since such a transaction would be viewed by the rest of the world as a hostile action.

Even if the central bank of Russia were able to acquire a key freely usable currency, such as U.S. dollars, euros, yen, or pounds, as a result of an SDR transaction, current sanctions would effectively immobilize those assets.

I think it is useful for Congress to reinforce the administration's position against the conversion of SDRs held by Russia or Belarus, and I urge my colleagues to support this bill.

In closing, I thank the bill's author, Representative Hill, for giving the Members of the House the opportunity to act together against Russia and Belarus and their war against the free world. I urge Members on both sides of the aisle to join me in supporting H.R. 6899.

BREAK IN TRANSCRIPT

Source