Russia and Belarus SDR Exchange Prohibition Act of 2022
Oct 4, 2022
Statute: 136 Stat. 2197
Became law: Oct 4, 2022
Oct 4, 2022
Statute: 136 Stat. 2197
Became law: Oct 4, 2022
Summary
Stops the U.S. from trading special money from the International Monetary Fund with Russia and Belarus and pushes other countries to do the same.
What problem does this solve?
Russia and Belarus could use international financial assets to fund their destabilizing actions against Ukraine. This law blocks them from exchanging these assets with the U.S. and encourages other countries to do the same, cutting off a potential source of funds.
What does this law do?
Prohibits SDR exchanges
Forbids the Secretary of the Treasury from participating in any transaction to exchange Special Drawing Rights (SDRs) held by Russia or Belarus.
Advocates for international cooperation
Requires the Treasury Secretary to strongly encourage other countries in the International Monetary Fund to also ban SDR exchanges with Russia and Belarus.
Opposes financial assistance
Directs the U.S. representative at international financial institutions to vote against giving financial aid to Russia and Belarus, unless it is for the basic human needs of civilians.
Allows for a presidential waiver
Permits the President to bypass the law's restrictions if doing so is in the national interest of the United States, provided Congress is notified with an explanation.
Who does this affect?
- Government of the Russian Federation
- Government of Belarus
- U.S. Department of the Treasury
What is the real world impact?
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Applies economic pressure on Russia and Belarus
Restricts the ability of Russia and Belarus to use their holdings of Special Drawing Rights (SDRs), a type of international reserve asset, to access hard currency. This is a financial sanction intended to limit their resources in response to actions against Ukraine.
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Encourages a united international response
Directs the U.S. to push other member countries of the International Monetary Fund to adopt similar prohibitions. This aims to create a coordinated global effort to financially isolate Russia and Belarus.
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Limits financial aid
Instructs U.S. representatives at international financial institutions to vote against providing financial help to Russia and Belarus. This further restricts their access to global funds, except for aid that meets basic human needs.
When does this start?
This law became effective on October 4, 2022, and includes specific conditions for when it will end.
Automatic Termination
The law will automatically end five years after it was enacted, on October 4, 2027.
Termination by Presidential Report
The law will end 30 days after the President reports to Congress that Russia and Belarus have stopped their destabilizing activities against Ukraine.