H.R. 7338 — what changed
Russia Cryptocurrency Transparency Act
From Introduced in House to Engrossed in House. 4 sections amended and 1 removed between Introduced in House and Engrossed in House.
Sec. 2 Findings
Congress finds the following:
On February 24, 2022, the Government of the Russian Federation, led by Vladimir Putin, launched an unprovoked, full-scale invasion of Ukraine.
This unprovoked act of aggression violates Ukraine’s right to independence, sovereignty, and territorial integrity, and constitutes an emergency in international relations.
The invasion by the Government of the Russian Federation of Ukraine caused significant displacement in Ukraine and triggered a broader humanitarian crisis in Europe.
On March 23, 2022, the Department of State released a statement assessing that the Russian Armed Forces committed war crimes by launching indiscriminate attacks on civilians and non-military infrastructure, including apartment buildings, schools, and hospitals, leaving thousands of innocent civilians killed or wounded.
The United Nations Office for Coordination of Humanitarian Affairs has projected that, over the next three months, 12,000,000 people living in Ukraine will need humanitarian assistance, 6,700,000 people will be internally displaced, and 4,000,000 people will flee Ukraine.
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Rapid humanitarian assistance is necessary 6 across sectors to address the needs of refugees and internally displaced persons from Ukraine.
Cryptocurrency has been used as an effective cross-border payment tool to send millions to the Ukrainian Government, Ukrainian army, and Ukrainian refugees with limited access to financial services.
In response to the war of aggression by the Government of the Russian Federation, the United States has imposed an array of sanctions, cutting off major Russian financial institutions from Western markets and freezing the assets of numerous Russian oligarchs.
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Given that regimes sanctioned by the growing development and adoption of blockchain technologies and digital currencies, United States have used cryptocurrencies to evade sanctions, there are increasing concerns that these digital assets, such as cryptocurrencies, assets may be used to circumvent the sanctions now imposed on Russia and Belarus by the United States sanctions regime, as well as those of and other foreign countries.
Sec. 3 Congressional notifications for State Department cryptocurrency rewards
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In general—Congressional notification— Section 36(e)(6) Subsection (e) of section 36 of the State Department Basic Authorities Act of 1956 (22 U.S.C. 2708(e)(6)) 2708) is amended by adding at the end the following new sentence: “Not later than 15 days before making a reward in a form that includes cryptocurrency, the Secretary of State shall notify the Committee on Foreign Affairs of the House of Representatives and the Committee on Foreign Relations of the Senate of such form for the reward.”paragraph:
added “(7) The Secretary of State shall notify the appropriate congressional committees not later than 15 days before paying out a reward in cryptocurrency.”
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Report— Not later than 180 days after the date of the enactment of this Act, the Secretary of State shall submit to the Committee on Foreign Affairs of the House of Representatives and the Committee on Foreign Relations of the Senate appropriate congressional committees a report on the use of cryptocurrency as a part of the Department of State Rewards program established under section 36(a) of the State Department Basic Authorities Act of 1956 (22 U.S.C. 2708(a)) that—
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justifies any determination explains why the Department of State made the Secretary determination to make pay out rewards under such program in a form that includes cryptocurrency;
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lists each cryptocurrency payment made under such program as of the date of the submission of already provided by the report;State Department;
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provides evidence of the manner and extent as to which why cryptocurrency payments would be more likely to induce whistleblowers to come forward with information than rewards paid out in United States dollars or other forms of money or nonmonetary items; andprizes;
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examines whether analyzes how the State Department’s use of cryptocurrency could provide bad actors with additional hard-to-trace funds that could be used for criminal or illicit purposes.undermine the dollar’s status as the global reserve currency; and
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examines if the State Department’s use of cryptocurrency could provide bad actors with additional hard-to-trace funds that could be used for criminal or illicit purposes.
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Appropriate Committees of Congress Defined— In this section, the term “appropriate committees of Congress” means—
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the Committee on Foreign Affairs of the House of Representatives;
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the Committee on Foreign Relations of the Senate.
Sec. 4 Report on blockchain usage for Ukranian humanitarian needs
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Appointment—In General— Not later than 90 30 days after the date of the enactment of this Act, the Secretary of State shall appoint a Director of Digital Currency Security State, in coordination with the Office Secretary of Economic Sanctions Policy the Treasury and Implementation.the Administrator of the United States Agency for International Development, shall submit to the appropriate congressional committees a report on the most effective avenues to promote economic development and provide humanitarian aid to Ukraine, including possible uses of cryptocurrencies or other technologies incorporating blockchains. Such report shall—
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review and analyze the advantages offered by cross-border transactions involving digital assets relative to other traditional avenues for cross-border humanitarian relief payments and the reasons for those advantages, including structural barriers which may impact the cost, efficiency, and reliability of traditional payment channels; and
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also review and analyze ways in which technologies incorporating blockchains can—
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assist in the care, support, or resettlement of refugees and internally displaced persons from Ukraine;
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address humanitarian access challenges and ensure the effective delivery of such assistance to persons from Ukraine;
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increase efficiency, accountability, and transparency in the administration of humanitarian aid provided by the United States to persons from Ukraine;
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prevent corruption through the use of “web3” technologies;
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improve access to capital; and
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bolster the efficiency and reliability of cross-border remittances.
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Duties—Form— The Director appointed pursuant to report required under subsection (a) shall be responsible for the following:submitted in unclassified form and may include a classified annex.
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Appropriate congressional committees defined— In this section, the term “appropriate congressional committees” means—
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the Committee on Foreign Affairs and the Committee on Financial Services of the House of Representatives; and
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the Committee on Foreign Relations and the Committee on Banking, Housing, and Urban Affairs of the Senate.
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Reviewing and analyzing the manner and extent to which digital currencies are impacting the United States sanctions regime.
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Assisting in the development of sanctions policy and implementation that is resilient to the use of digital currencies by malevolent actors.
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Coordinating with the Office of Foreign Assets Control and the Financial Crime Enforcement Network of the Department of the Treasury, as appropriate, to share information and develop best practices.
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Engaging with private sector actors to broaden understanding of the digital currency ecosystem, further comprehend economic costs and benefits, and encourage coordination and partnership in isolating bad actors.
Sec. 5 Effectiveness and enforcement of sanctions
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Sense of Congress— It is the sense of Congress that—
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on March 9, 2022, President Biden issued an Executive Order outlining a national policy to mitigate the risks, and harness the potential benefits of, digital assets and distributed ledger technology;
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the growing development and adoption of digital assets have created an urgent need for the United States to play a leading role in the global financial system and facilitate technological innovation;
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these developments have had significant implications that pose risks to the financial stability and national security interest of the United States, including issues relating to privacy and surveillance;
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the United States Government must—
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ensure the efficacy and enforcement of the United States’ sanctions regime by preventing the misuse of digital assets, which can facilitate transactions by Russian persons subject to sanctions;
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mitigate national security liabilities and systemic financial risks posed by the misuse of digital assets by developing policy recommendations and addressing existing regulatory gaps; and
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maintain technological leadership to promote United States global competitiveness and play a leading role in the global governance of digital assets.
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Report—
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In general— Not later than 180 days after the date of the enactment of this Act, the Secretary of the Treasury, in consultation with the Secretary of State, shall submit a report to the appropriate congressional committees that provides an assessment on how digital currencies affect the effectiveness and enforcement of United States sanctions against the Russian Federation and actors subject to sanctions related to the Russian Federation’s invasion of Ukraine.
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Matters to be included— The report under paragraph (1) shall—
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describe any efforts by the Russian Federation or persons subject to sanctions related to the Russian Federation’s invasion of Ukraine to utilize digital assets to evade the sanctions regimes of the United States and its international allies and partners;
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describe any efforts by persons subject to sanctions related to the Russian Federation’s invasion of Ukraine to use decentralized finance technology or other similar technology to effect transactions, including digital wallets, digital asset trading platforms, and digital asset exchanges;
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assess how the use or adoption of digital currencies could undermine the national security interests of the United States and impact the efficacy and enforcement of sanctions, , and the enforcement of anti-money laundering provisions;
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detail actions taken by the United States government to work with private sector actors to combat the evasion of sanctions imposed by the United States; and
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include recommendations for new legislative and regulatory measures needed to strengthen the United States Government’s ability to prevent any states, state-sponsored actors, and non-state-sponsored actors from using digital currencies to evade sanctions imposed by the United States Government.
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Not later than 30 days after the date of the enactment of this Act, the Secretary of State, in coordination with the Secretary of the Treasury and the Administrator of the United States Agency for International Development, shall submit to the Committee on Foreign Affairs of the House of Representatives and the Committee on Foreign Relations of the Senate an unclassified report on the possible uses of cryptocurrencies or other technologies incorporating blockchains to promote economic development and provide humanitarian aid to Ukraine. Such report shall also review and analyze ways in which technologies incorporating blockchains can—
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assist in the care, support, or resettlement of refugees and internally displaced persons from Ukraine;
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Appropriate committees of congress defined— address humanitarian access challenges and ensure In this section, the effective delivery term “appropriate committees of such assistance to persons from Ukraine;Congress” means—
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the Committee on Foreign Affairs of the House of Representatives;
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the Committee on Financial Services of the House of Representatives;
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the Committee on Foreign Relations of the Senate; and
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the Committee on Banking, Housing, and Urban Affairs of the Senate.
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Report Form— increase efficiency, accountability, and transparency The report required under subsection (b) shall be submitted in the administration of humanitarian aid provided by the United States to persons from Ukraine;unclassified form with a classified annex, if necessary.
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prevent corruption through the use of “web3” technologies;
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improve access to capital; and
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bolster the efficiency and reliability of cross-border remittances.
Sec. 6 Report on the effectiveness and enforcement of sanctions
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Sense of congress— It is the sense of Congress as follows:
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On March 9, 2022, President Biden issued an Executive order outlining a national policy to mitigate the risks, and harness the potential benefits of, digital assets and distributed ledger technology.
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The growing development and adoption of digital assets have created an urgent need for the United States to play a leading role in the global financial system and facilitate technological innovation.
removed
These developments have had significant implications that pose risks to the financial stability and national security interest of the United States, including issues relating to privacy and surveillance.
removed
The United States Government must—
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ensure the efficacy and enforcement of the United States sanctions regime by preventing the misuse of digital assets, which can facilitate transactions by Russian persons subject to sanctions;
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mitigate national security liabilities and systemic financial risks posed by the misuse of digital assets by developing policy recommendations and addressing existing regulatory gaps; and
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maintain technological leadership to promote U.S. global competitiveness and play a leading role in the global governance of digital assets.
removed
Report—
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In general— Not later than 30 days after the date of the enactment of this Act, the Secretary of State, in consultation with the Secretary of the Treasury, shall submit to the appropriate congressional committees a report assessing the manner and extent to which digital currencies can affect the effectiveness and enforcement of United States sanctions against the Russian Federation and against actors subject to sanctions relating to the Russian Federation’s invasion of Ukraine.
removed
Matters to be included— The report required by paragraph (1) shall—
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describe any efforts by the Russian Federation or persons subject to sanctions related to the Russian Federation’s invasion of Ukraine to use digital assets to evade the sanctions regime of the United States or its international allies and partners;
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describe any efforts by persons subject to sanctions related to the Russian Federation’s invasion of Ukraine to use decentralized finance technology or other similar technology to effect transactions, including digital wallets, digital asset trading platforms, and digital asset exchanges;
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assess how the use or adoption of digital currencies could undermine the national security interests of the United States and impact the efficacy and enforcement of sanctions and anti-money laundering provisions;
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detail actions taken by the United States to work with private sector actors to combat the evasion of sanctions imposed by the United States; and
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include recommendations for new legislative and regulatory measures needed to strengthen the ability of the United States to prevent states, state-sponsored actors, and non-state-sponsored actors from using digital currencies to evade sanctions imposed by the United States.
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Appropriate congressional committees— In this subsection, the term “appropriate congressional committees” means—
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the Committee on Foreign Affairs of the House of Representatives;
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the Committee on Financial Services of the House of Representatives;
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the Committee on Foreign Relations of the Senate; and
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the Committee on Banking, Housing, and Urban Affairs of the Senate.
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Form— The report required by paragraph (1) shall be submitted in unclassified form but may include a classified annex.