House Bills Should Include More Severe Russia Sanctions, CPA Says
The House should add stronger sanctions measures to the Russia-related bills recently passed out of the Financial Services Committee (see 2203180021), including more serious capital market and investment penalties, the Coalition for a Prosperous America said in a March 29 letter to Speaker Nancy Pelosi, D-Calif.
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CPA said the bills should impose more severe sanctions against Russian companies “trading and raising funds in our markets,” adding that eight of Moscow's largest companies “remain in the investment portfolios of tens of millions of unwitting American retail investors.” Russian companies should be “deregistered and removed from our capital markets at once,” the coalition said.
The legislation should also mandate U.S. investment restrictions on Russian defense companies, similar to those already imposed against companies with ties to China’s military (see 2106030067), CPA said. “[W]e believe that if the U.S. is, for example, sanctioning bond purchases of Sberbank and banning the purchase of Russian oil and gas, then it makes no sense to allow American pension funds and other institutional investors and Wall Street ‘emerging market’ investors to buy shares of these companies,” CPA said.
The bills should include “more forceful measures” and wording surrounding Russia sanctions instead of “merely prohibitions on new debt and equity issuances, stricter definitions on which of our U.S. financial institutions are subject to sanctions compliance, or reliance on merely voluntary action,” CPA said. An investment restriction should apply to “all companies domiciled in Russia, and/or owned or controlled by Russian officials or oligarchs.”
Also needed is a mechanism by which secondary sanctions can be “immediately imposed” against countries, people or entities that help Russia or Belarus evade U.S. sanctions, CPA said. “Secondary sanctions legislation has been introduced in the Senate and we encourage the House to consider similar such measures to be included in a package for a floor vote, including the prompt removal from the U.S. capital markets of any offending, 'sanctions-busting' foreign companies -- particularly Chinese enterprises -- that are publicly traded.”
While the bills passed out of the House committee hit on “some key issues,” CPA said they “noticeably [lack] high priority components that we sincerely believe belong in the final bills that come to the House floor.” A Pelosi spokesperson didn’t comment.