Title: Closing Loopholes in Russia Sanctions Act of 2022
Policy area: International Affairs

Summary:
Closing Loopholes in Russia Sanctions Act of 2022
This bill requires and authorizes various actions relating to digital assets, such as cryptocurrencies, and sanctions relating to Russia.
Specifically, the bill (1) authorizes the President to impose sanctions on a foreign person (i.e., individual or entity) in the digital asset industry that facilitates transactions involving persons subject to U.S. sanctions relating to Russia; (2) prohibits digital asset exchanges from transacting with digital asset wallets or cryptocurrency addresses that are known to be, or could reasonably be known to be, affiliated with persons headquartered in Russia; and (3) requires U.S. taxpayers holding a certain amount of cryptocurrency in non-U.S. accounts to report such holdings to the Internal Revenue Service.

[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[H.R. 7067 Introduced in House (IH)]

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117th CONGRESS
  2d Session
                                H. R. 7067

   To impose sanctions with respect to the use of cryptocurrency to 
 facilitate transactions by Russian persons subject to sanctions, and 
                          for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             March 11, 2022

 Mr. Sherman introduced the following bill; which was referred to the 
   Committee on Foreign Affairs, and in addition to the Committee on 
 Financial Services, for a period to be subsequently determined by the 
  Speaker, in each case for consideration of such provisions as fall 
           within the jurisdiction of the committee concerned

_______________________________________________________________________

                                 A BILL


 
   To impose sanctions with respect to the use of cryptocurrency to 
 facilitate transactions by Russian persons subject to sanctions, and 
                          for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Closing Loopholes in Russia 
Sanctions Act of 2022''.

SEC. 2. APPLICABILITY.

    This Act applies to any person engaged in the business of effecting 
transactions in digital assets for the account of others, including any 
communication protocol systems or other similar systems using 
decentralized finance technology or other similar technology to provide 
transactional services, including digital wallets, digital asset 
trading platforms, digital asset exchanges, and digital asset mining 
services.

SEC. 3. DEFINITIONS.

    In this Act:
            (1) Digital assets.--The term ``digital assets'' includes--
                    (A) any digital representation of value which is 
                recorded on a cryptographically secured distributed 
                ledger or any similar technology, as specified by the 
                Secretary of the Treasury; and
                    (B) nonfungible tokens and other digital assets 
                using blockchain or other similar technology.
            (2) Digital asset exchange.--The term ``digital asset 
        exchange'' or ``virtual currency exchange'' includes--
                    (A) an entity such as a State-licensed money 
                services business or money transmitting business, as 
                defined in section 5330 of title 31, United States 
                Code; and
                    (B) a financial institution that exchanges virtual 
                currency or digital assets.
            (3) Digital asset wallets.--The term ``digital asset 
        wallets'' mean interfaces for storing and transferring digital 
        assets.
            (4) Foreign person.--The term ``foreign person'' means an 
        individual or entity that is not a United States person.
            (5) Hosted wallets.--The term ``hosted wallet'' means a 
        digital account hosted by a third-party financial institution 
        that allows the account holder to store, send, and receive 
        cryptocurrency and digital assets.
            (6) Unhosted wallets.--The term ``unhosted wallets'' means 
        a digital wallet that is not hosted by a third-party financial 
        system, including software hosted on a computer, phone, or 
        other device of a person.
            (7) United states person.--The term ``United States 
        person'' means--
                    (A) an individual who is a United States citizen or 
                an alien lawfully admitted for permanent residence to 
                the United States; or
                    (B) an entity organized under the laws of the 
                United States or any jurisdiction within the United 
                States, including a foreign branch of such an entity.

SEC. 4. IMPOSITION OF SANCTIONS WITH RESPECT TO THE USE OF 
              CRYPTOCURRENCY TO FACILITATE TRANSACTIONS BY RUSSIAN 
              PERSONS SUBJECT TO SANCTIONS.

    (a) In General.--As soon as practicable after the date of the 
enactment of this Act, the President may exercise all of the powers 
granted to the President under the International Emergency Economic 
Powers Act (50 U.S.C. 1701 et seq.) to the extent necessary to block 
and prohibit all transactions in property and interests in property of 
a foreign person described in subsection (b) if such property and 
interests in property are in the United States, come within the United 
States, or are or come within the possession or control of a United 
States person.
    (b) Foreign Persons Described.--A foreign person described in this 
subsection is a foreign person--
            (1) that operates a digital asset exchange or is otherwise 
        a part of the digital asset industry; and
            (2) that facilitates, directly or indirectly, transactions 
        for any person with respect to which sanctions have been 
        imposed by the United States for actions relating to the 
        Russian Federation, including transactions that facilitate the 
        evasion of such sanctions.
    (c) Implementation; Penalties.--
            (1) Implementation.--The President may exercise all 
        authorities provided under sections 203 and 205 of the 
        International Emergency Economic Powers Act (50 U.S.C. 1702 and 
        1704) to carry out this section.
            (2) Penalties.--A person that violates, attempts to 
        violate, conspires to violate, or causes a violation of this 
        section or any regulation, license, or order issued to carry 
        out this section shall be subject to the penalties set forth in 
        subsections (b) and (c) of section 206 of the International 
        Emergency Economic Powers Act (50 U.S.C. 1705) to the same 
        extent as a person that commits an unlawful act described in 
        subsection (a) of that section.
    (d) Exception Relating to Importation of Goods.--
            (1) In general.--The requirement to block and prohibit all 
        transactions in all property and interests in property under 
        subsection (a) shall not include the authority or a requirement 
        to impose sanctions on the importation of goods.
            (2) Good.--In this subsection, the term ``good'' means any 
        article, natural or manmade substance, material, supply or 
        manufactured product, including inspection and test equipment, 
        and excluding technical data.

SEC. 5. VIRTUAL CURRENCY EXCHANGES.

    No digital asset exchange that does business in the United States 
shall transact with, or fulfill transactions of, hosted wallets and 
unhosted wallets or cryptocurrency addresses that are known to be, or 
could reasonably be known to be, affiliated with persons headquartered 
in the Russian Federation.

SEC. 6. TRANSACTIONS REPORTS.

    (a) In General.--Not later than 60 days after the date of enactment 
of this Act, the Financial Crimes Enforcement Network shall require 
United States taxpayers holding greater than $10,000 in cryptocurrency 
in accounts outside of the United States to file a report described in 
section 1010.350 of title 31, Code of Federal Regulations, using the 
form described in that section, in accordance with section 5314 of 
title 31, United States Code.
    (b) Rulemaking.--Not later than 60 days after the date of enactment 
of this Act, the Secretary of the Treasury shall finalize rulemaking 
requiring banks and money service businesses to submit reports, keep 
records, and verify the identity of customers in relation to 
transactions involving convertible virtual currency or digital assets 
held in unhosted wallets.

SEC. 7. REPORT.

    Not later than 60 days after the date of enactment of this Act, the 
Secretary of the Treasury shall submit to Congress a report on the 
progress of the Department of the Treasury in carrying out this Act, 
including any resources needed by the Department to improve 
implementation and progress in coordinating with governments of 
countries that are allies or partners of the United States.

SEC. 8. SUNSET.

    Sections 4 and 5 shall cease to have effect on the date on which 
the President certifies to Congress that all sanctions imposed by the 
United States with respect to the Russian Federation have terminated.
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