Finance

President Waters sends letter to financial and business sector regarding Russian divestment

President Waters sends letter to financial and business sector regarding Russian divestment

Today, MP Maxine Waters (D-CA)chair of the House Financial Services Committee, sent a letter to trade associations representing thousands of U.S. businesses in the financial and commercial sector, requesting detailed information on the steps U.S. financial institutions and businesses have taken to end to their relationships and commitments in Russia and with companies that support the Russian government.

“I have been encouraged by the number of companies in the financial services sector and corporate America that have taken action beyond those explicitly called for by US sanctions. With varying degrees of withdrawals, iconic US giants of the car and plane, accounting and consulting firms, Wall Street firms, and food and entertainment companies that have become household names in Russia have made the decision to voluntarily leave Russia… Although several companies have voluntarily divested from Russia, the Committee does not currently have a clear view of the extent of these divestments.

To see here for the letter, which is also provided below.

Dear Advocacy Leader[1]:

The American people, their representatives in Congress, the Biden administration, NATO member countries, and many of our allies and partners around the world are impressed by the heroic resistance and courageous perseverance of the Ukrainian people. Together, we are committed to our collective determination to support the people of Ukraine against Russian aggression.

To stop Russia’s ability to wage wanton wars, we must use all elements of American force, including imposing substantial, multi-tiered economic and trade sanctions on Russian President Putin, the Kremlin and those who help the Russia and allow it to continue to attack Ukraine and commit countless war crimes.

I have been encouraged by the number of companies in the financial services industry and corporate America that have taken action beyond those explicitly called for by US sanctions. With more or less withdrawals, the iconic American giants of the car and the plane,[2] accounting and consulting firms,[3] wall street companies,[4] and catering and entertainment businesses that have become household names in Russia[5] made the decision to voluntarily leave Russia. Having spent years before coming to Congress calling for an economic boycott to end apartheid South Africa, I know that when the full might of the American economy is applied against countries that commit atrocities, we can bring about real and lasting change for the benefit of all.

Earlier last week Ukrainian President Zelenskyy gave a joint speech to the US Congress. President Zelensky specifically called on US companies to “immediately” withdraw from Russian markets, “because Russian markets are flooded with [Ukrainian] blood.” In response to Zelenskyy’s call, my committee passed five bills, four of which were bipartisan, to further insulate Russia from the global economy. I will continue to work bipartisanly on legislation to punish Russia and bring relief to the Ukrainian people.

Although several companies have voluntarily divested from Russia, the Committee does not currently have a clear picture of the extent of these divestments. To that end, I request detailed information on the significant steps that American financial institutions and businesses have taken to end their relationships and commitments in Russia, with the Kremlin, and with companies that support the Russian government. Specifically, the Committee wishes to understand:

  • The actions taken by your sector and the identity of your members who have decided to leave or cease their business activities (including financial relations) in Russia and with companies based in Russia since February 24, 2022;
  • The identity of companies that continue to conduct business activities in Russia and with companies based in Russia, and what their plans are to reduce or end these activities, or the reasons why they plan to continue these activities;
  • Activities undertaken by your industry and members to comply with U.S. and allied sanctions (including internal risk analysis and sanctions compliance activities).

Please see the attached document for guidance on collecting this information.

We thank you for your attention.

Truly,

The Honorable Maxine Waters
President

cc: The Honorable Patrick McHenry, Ranking Member

Case (1)

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[1] American Bankers Association; American Council of Life Insurers; American FinTech Council; American Institute of Chartered Accountants; American Investment Council; Association for Digital Asset Markets; Banking Policy Institute; Blockchain Association; Commercial Real Estate Finance Council; Consumer Data Industry Association; Council of institutional investors; Chamber of Digital Commerce; Association of electronic transactions; Financial innovation now; Financial Services Forum; Financial Services Institute; Fintech Association; Futures Industry Association; Index Industry Association; Institute of International Bankers; International Swaps and Derivatives Association; Association of Investment Advisors; Institute of Investment Companies; Loan Syndication Trade Association; Association of managed funds; National Venture Capital Association; Round table on real estate; Securities and Capital Markets Industry Association; Structured Finance Association; United States Chamber of Commerce; United States and Russia Business Council.

[2] See “From Apple to McDonald’s, which companies pulled out of Russia?” Wall Street Journal, March 16, 2022, available at https://www.wsj.com/articles/what-companies-have-pulled-back-from-russia-11646425481.

[3] See “Big Auditors to Leave Russia Amid Invasion of Ukraine”, Wall Street Journal, March 7, 2022, available at https://www.wsj.com/articles/big-auditors-to-leave-russia-amid-invasion-of -ukraine-11646666419.

[4] See “Goldman Sachs to Exit Russia in Wall Street’s First Pullout”, Bloomberg, March 10, 2022, available at https://www.bloomberg.com/news/articles/2022-03-10/goldman-sachs-to-exit – russia-of-wall-street-s-first-pullout.

[5] See “Exodus of ‘iconic’ American companies is taking psychic tot on Russians”, NBC News, March 10, 2022, available at https://www.nbcnews.com/business/consumer/brands-leaving-russia-reaction-from – russian-people-rcna19418.

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Organizations that received the letter include:

American Bankers Association
American Council of Life Insurers
American Fintech Council
American Institute of Chartered Accountants
American Investment Council
Association for Digital Asset Markets
Banking Policy Institute
Blockchain Association
Commercial real estate finance advice
Consumer Data Industry Association
Institutional Investors Council
Chamber of Digital Commerce
Electronic Transactions Association
Financial innovation now
Financial Services Forum
Financial Services Institute
Fintech Association
Futures Industry Association
Index Industry Association
Institute of International Bankers
International Swaps and Derivatives Association
Association of Investment Advisors
Institute of Investment Companies
Loan Syndication Trade Association
Association of managed funds
National Venture Capital Association
Real Estate Roundtable
Securities and Capital Markets Industry Association
Structured Finance Association
United States Chamber of Commerce
United States and Russia Business Council

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In March 2022, President Waters gave a opening statement and held a markup on five Russian and Ukrainian bills that will extirpate Russian assets and money. Five bills were passed by the Committee, four of them by voice vote. They understand:

  • HR 7080, the Nowhere to Oligars’ Assets Act is an invoice offered by President Maxine Waters (D-CA) which helps the Financial Crimes Enforcement Network (FinCEN) and its law enforcement partners detect Russian oligarchs who participate in money laundering techniques to hide their money, avoid scrutiny and evade our sanctions .
  • HR 7066, the law on financial sanctions in Russia and Belarus is an invoice offered by Representative Brad Sherman (D-CA) which specifies that foreign subsidiaries of American financial institutions must comply with American sanctions against Russia and Belarus.
  • HR 7081, the Ukrainian Law on Comprehensive Debt Repayment Relief is an invoice offered by Representative Jesus “Chuy” Garcia (D-IL) which orders the Treasury to use its influence with the International Monetary Fund, the World Bank, other multilateral development banks and with private creditors to request the suspension of all debts of Ukraine and financial assistance to Ukraine and the countries along its borders hosting refugees.
  • HR 6891, the Isolation Law for Russian Government Officials is an invoice offered by Representative Ann Wagner (R-MO) which seeks to exclude Russian government officials from the G-20, the Financial Stability Board and other international standards and economic cooperation bodies.
  • HR 6899, the law banning SDR trading between Russia and Belarus is an invoice offered by Representative French Hill (R-AK) which aims to prevent Russia and Belarus from converting their holdings of special drawing rights into hard currency.

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