Commentary March 01, 2022 at 07:44 AM Share & Print
Senate Finance Committee Chairman Ron Wyden, D-Ore., on Tuesday called for lawmakers to enact six economic actions beyond the current sanctions to ensure that Russian President Vladimir Putin pays “for his actions” after attacking Ukraine.
“The key to holding Vladimir Putin accountable for his unprovoked invasion of Ukraine is following the money, and rooting out billions in illicit assets stashed around the world by Putin and his cronies,” Wyden said in a statement.
While the Treasury Department “has done a remarkable job to implement tough sanctions, there are several key areas Congress needs to address and should support,” Wyden said.
Wyden says these six areas deserve Congress’ — as well as regulators’ — attention.
1. Support the IRS Criminal Investigations Unit.
Congress “needs to give these experts the resources they need for these highly complex investigations,” he said. The Senate Finance Committee is also “taking a hard look at loopholes and preferences in our tax system that allow Putin’s oligarchs to hide assets and avoid taxes on the assets they’ve stashed in the United States.”
2. Ensure that tariff treatment of Russia reflects its ‘pariah status.’
Permanent normal trade relations are extended to countries as they join the World Trade Organization and agree to abide by rules that ensure a level playing field in international trade, he said. “Removing normal trade relations will raise tariffs on Russian goods and send a message that unprovoked invasions of a foreign nation will not be tolerated in any arena.”
Russia’s actions to throttle internet access and censor online content not only raise human and civil rights concerns, but also act as a barrier to trade, Wyden said.
3. Tighten AML rules on private equity and hedge funds.
A loophole in the Investment Company Act exempts private equity and hedge funds from basic anti-money-laundering requirements, Wyden said, calling on the Securities and Exchange Commission to update requirements to disclose foreign beneficial owners of private investment funds.
“I have also asked the Treasury Department’s Office of Intelligence and Analysis to conduct a thorough review of the risks posed by these loopholes. Private investment funds are now a $10 trillion industry, and there needs to be far more scrutiny of offshore cash moving through these funds,” he said.
4. Ensure the Treasury Department has sufficient funding.
Treasury’s Financial Crimes Enforcement Network, or FinCen, needs to implement the anti-money-laundering law passed in 2020. “The key feature of this law is a new beneficial ownership registry so we know the true owners of shell companies invested in assets like luxury real estate,” Wyden said. “Russian oligarchs have relied on anonymous shell companies to hide their wealth and while we’ve given the Treasury Department the tools to go after them; they need the resources.”
5. Increase scrutiny of Russian oligarchs.
Financial institutions should be required to rigorously monitor and eliminate correspondent banking services for Russian oligarchs and sanctioned entities associated with the Russian state, Wyden says.
6. Support an agency task force.
The task force, led by the Treasury and Justice departments, would identify and seize the property and other physical assets of Russian oligarchs and Kremlin-linked companies. “If Congress needs to provide additional resources for this effort, it should do so,” Wyden said.