Mar 8, 2022 - Politics & Policy

Scoop: Senators look to lock down Russia's gold reserves

Illustration of a magnet attracting gold bars.

Illustration: Aïda Amer/Axios

A bipartisan group of senators is introducing a bill to prevent Russia from liquidating gold to withstand biting sanctions.

Why it matters: The sanctions against Russia have frozen the country's foreign exchange assets, but its stockpile of gold could be a lifeline. A measure to close the loophole is yet another indication Congress is looking to get ahead of the Biden administration on punitive measures against Russia.

The details: The bill introduced by Sens. Angus King (I-Maine), John Cornyn (R-Texas), Bill Hagerty (R-Tenn.), and Maggie Hassan (D-N.H) would target Russia's ability to sell gold reserves.

  • It would apply secondary sanctions to any American entities knowingly transacting with or transporting gold from Russia’s central bank holdings, or selling gold physically or electronically in Russia.
  • The goal is to include the legislation in the omnibus spending bill that lawmakers hope to pass by Friday, an aide familiar with the matter told Axios.

By the numbers: Russia holds around $132 billion in gold reserves.

What they're saying: “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," King said in a statement. "By sanctioning these reserves, we can further isolate Russia from the world’s economy and increase the difficulty of Putin’s increasingly-costly military campaign."

  • "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," Cornyn said.
  • "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," said Hassan.

The big picture: Lawmakers looking to approve an aid package for Ukraine as a part of the larger omnibus spending bill are running up against two pressing deadlines: March 11 to avoid a government shutdown, and the ongoing Russian invasion.

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