HR4346-119

What This Bill Does

The PEACE Act responds to Russia's attacks on Ukraine by tightening financial pressure on Russia-linked banks, sanctioned persons, and energy companies. Within 180 days, Treasury must prescribe regulations prohibiting or imposing strict conditions on U.S. correspondent or payable-through accounts for foreign financial institutions that knowingly provide significant financial services to Russian-sanctioned persons, Directive 2 institutions, Directive 3 entities, or foreign persons operating in Russia's energy sector. Violations are subject to civil penalties.

Treasury must report within 90 days on whether Gazprom, Rosneft, and Lukoil are covered Russian energy-sector persons. The President may waive foreign-financial-institution restrictions for up to 180 days at a time if the waiver advances resolution of the national emergency or is important to U.S. national interests. The bill also requires Treasury to seize, confiscate, transfer, or vest covered Russian resources held by U.S. financial institutions and deposit the resulting funds in the Ukraine Support Fund, where they can be used for REPO for Ukrainians Act purposes or to buy defense articles for Ukraine. The Act terminates 30 days after the President reports that Russia has ceased destabilizing Ukraine's sovereignty and territorial integrity, or five years after enactment.

Who Benefits and How

The Ukraine Support Fund benefits because covered Russian resources held by U.S. financial institutions must be deposited into the fund. The Government of Ukraine benefits because the fund may support Ukraine-related recovery purposes or defense articles. Treasury sanctions staff benefit from explicit authority to target foreign banks serving Russian-sanctioned persons and energy-sector actors. U.S. policy makers seeking leverage over Russia benefit from sanctions tied to correspondent-account access and Russian asset transfer. Ukrainian civilians and energy infrastructure users benefit indirectly if the pressure helps deter Russian attacks or fund recovery.

Who Bears the Burden and How

Foreign financial institutions dealing with Russian-sanctioned persons face loss or strict conditions on U.S. correspondent and payable-through accounts. Russian energy companies, including Gazprom, Rosneft, and Lukoil if Treasury determines they qualify, face heightened sanctions risk. Russian government asset holders and oligarch-linked asset holders lose covered resources held by U.S. financial institutions. U.S. financial institutions holding covered Russian resources must comply with Treasury seizure, transfer, vesting, and reporting processes. Treasury sanctions staff must issue regulations, make energy-company determinations, administer waivers, and handle asset transfers.

Key Provisions

• Requires Treasury to restrict U.S. correspondent or payable-through accounts for foreign banks serving Russian-sanctioned persons or Russian energy-sector actors.
• Requires civil penalties for violations of Treasury regulations.
• Requires Treasury to report within 90 days on whether Gazprom, Rosneft, and Lukoil are sanctionable Russian energy-sector persons.
• Authorizes presidential waivers for up to 180 days at a time with congressional reporting.
• Requires transfer of covered Russian resources held by U.S. financial institutions to the Ukraine Support Fund.
• Terminates the Act when Russia stops destabilizing Ukraine or five years after enactment.