U.S. Sen. Marco Rubio (R-FL) introduced legislation last week that seeks to stop foreign nations from evading sanctions.
The Sanctions Evasion Prevention and Mitigation Act (S. 4858) is designed to ensure that adversaries like China, Russia, and Iran face economic consequences for their anti-democratic actions and don’t use alternate financial systems to evade U.S. sanctions.
“Sanction enforcement is vital to enforcing our laws. When our adversaries evade U.S. sanctions, we must do everything in our power to ensure they are held accountable and safeguard our financial system. This bill prioritizes countering regimes that are attempting to circumvent U.S. sanctions, including those in Tehran, Beijing, and Moscow,” Rubio said.
Specifically, the legislation would direct the President to impose sanctions on any financial institution from a country of concern — China, Russia, Iran, North Korea, Cuba, and Venezuela, as well as Russian-occupied territory — that uses China’s Cross-Border Interbank Payment System (CIPS), Russia’s System for Transfer of Financial Messages (SPFS), or Iran’s System for Electronic Payment Messaging (SEPAM) to verify or conduct a transaction.
The bill would also terminate or prohibit any correspondent accounts or payable-through accounts of offending financial institutions in the U.S. or block all transactions of such institutions in the United States. In addition, it would require a report from U.S. Department of Treasury outlining the scope and usage of CIPS, SPFS, and SEPAM around the world, the risks of widespread adoption of these systems to U.S. national security, and recommendations to preserve and strengthen U.S. influence in the global financial system.