Yellen faces bipartisan pressure to ramp up Russian sanctions after Bucha

The Biden administration is facing bipartisan pressure to tighten sanctions on Russia after images of mass graves, dead bodies lining the streets and reports of sexual violence emerged from a Ukrainan town recently surrendered by Russian troops.

Members of the House Financial Services Committee urged Treasury Secretary Janet Yellen during a Wednesday hearing to ramp up pressure on the Russian economy in response to atrocities committed in Bucha. 

“We must show the Russian people the nation of Tolstoy and Tchaikovsky will be completely isolated with a stone age economy as long as they are governed by a butcher,” said Rep. Jim Himes (D-Conn.), his voice rising in anger.

“Whether it takes one year or 10, Vladimir Putin must answer to the laws and the standards of decency that he mocks. So I have just one question today, which is what more can we do to help the people of Ukraine and the survival of our democracy?” 

While lawmakers in both parties praised the administration for sanctions imposed so far — including a new round announced Wednesday, targeting Russian banks and Vladimir Putin’s daughters — they made clear the US must go further.

Many Republicans on the panel urged the administration to cut off the Russian energy sector’s access to foreign markets. Sales of oil and gas are one of few ways remaining that Russian can obtain American dollars and other currencies essential to propping up its severely damaged economy. 

“This is the loophole that we need to close,” said Rep. Andy Barr (R-Ky.) “This is what is financing Putin’s war.”

Though President Biden has banned imports of Russian oil and gas to the U.S., he has refused to impose sanctions that could limit European access to Russian energy. The U.S. is a net exporter of energy, but the European Union could face serious economic trouble without access to Russian natural gas and oil.

“Unfortunately, many of our European partners remain heavily dependent on Russian natural gas, as well as oil, and they are committed to making transition away from that entrance as rapidly as possible,” Yellen said, adding it was “essential” to work in coordination with allies to effectively hinder Russia.

“We’re doing all we can to help. But in the meantime, we issued this license and have taken steps to make sure that there can be a continued flow of Russian natural gas and oil.”

For months, Biden has been forced to balance pressure from Congress to tighten sanctions and concerns from Europe about the potential economic blowback. The president had initially rebuffed calls from lawmakers to cut Russian banks off from the SWIFT global banking messaging system until the EU was on board and held off on banning Russian energy imports out of concerns for its impact on energy prices globally.

Several Democratic lawmakers praised the Biden administration for keeping European and other key allies united behind sanctions imposed so far, which have taken a serious toll on the Russian economy. Russian officials have helped the ruble recover with severe limits on domestic financial transactions, but sanctions experts say the Russian economy is still reeling from the departure of dozens of Western businesses, limits on access to its foreign reserves and technology exports.

“I still have faith in the president and I compliment him for his ability to not only pull people together, but to try to maintain this coalition, so that if this becomes a long-term endeavor, we will still have allies with us. I think that’s important,” said Rep. Al Green (D-Texas.)

Even so, sanctions have done little to temper Putin’s invasion and destruction in Ukraine, where officials are pleading with the U.S. to boost its limits on the Russian economy. Disturbing images of what U.S. and international officials have called war crimes in Bucha and other cities have galvanized lawmakers behind even tougher limits.

The Biden administration on Wednesday imposed sanctions on Russian President Vladimir Putin’s daughters and ramped up penalties on Sberbank and Alfa Bank, the largest Russian state-owned and private banks respectively, citing “the sickening brutality” recently discovered in Bucha.

Some Democrats also urged Yellen to take tougher action against Russian oligarchs, including through implementing an anti-money laundering law passed last year meant to expose the currently anonymous owners of certain businesses and assets.

“As we speak, Russian oligarchs are busy moving their money out of our reach. And in some cases, they’re likely moving their money into the US because they know they can hide it anywhere they want anonymously, until Treasury finally finishes implementing my bill,” said Rep. Carolyn Maloney (D-N.Y.), the lead sponsor of the beneficial ownership law passed last year.

“We don’t know who’s behind buildings in New York and elsewhere, which are just bank accounts and no lights in the buildings. People don’t live there. They’re anonymous shell companies. And law enforcement wants to know, the public wants to know, Ukrainian people want to know who owns this property. And we can’t get to it until the rules have been made.”