Proposals to Expand DOJ Sanctions Evasion Authorities Face Some Senate Pushback

The Senate should move forward with bipartisan legislation that would give the administration stronger authorities to penalize and investigate sanctioned Russian oligarchs and tackle broader sanctions evasion issues (see 2207200020), senators said during a hearing this week. But Sen. Pat Toomey, R-Pa., said Congress shouldn’t be too quick to expand some of the Biden administration’s proposals, which could expand DOJ authorities unrelated to Russia.

Andrew Adams, director of DOJ’s Task Force KleptoCapture, used the Sept. 20 Senate Banking Committee hearing to advocate for a range of congressional action that could expand the DOJ’s ability to prosecute sanctioned Russians. One measure, which has bipartisan support, would create a new authority that would allow the U.S. to transfer forfeited Russian assets to a Ukrainian relief fund.

But Adams also said the Biden administration is hoping to push through other proposals (see 2204280016), including one that would amend the International Emergency Economic Powers Act’s penalty provision “to extend the existing forfeiture authorities to ‘facilitating property’ and not simply to the proceeds of such offenses.” Another measure would add sanctions and export control evasion as a crime under the definition of “racketeering activity” in the Racketeer Influenced and Corrupt Organizations Act.

“This proposal would extend a powerful forfeiture tool against racketeering enterprises engaged in sanctions violations and pave the way for prosecutions that appropriately capture the scope and the complexity of these evasion networks,” Adams said. He added that amending the RICO Act would help the U.S. better limit sanctions evasion not just in Russia, but also in Iran and North Korea.

“The ability to look at financial service providers, to look at facilitators who are engaged generally in the efforts to make a buck on the back of sanctions evasion, irrespective of where in the world the sanctions evasion is taking place, would be particularly powerful and allow us to go after a broader set of actors,” Adam said.

Sen. Cortez Masto, R-Nev., said she supports expanding the RICO Act’s racketeering definition. “I do we think we need to make sure that we’re giving you all the tools that you need,” she said. “Adding just sanctions evasion as a RICO predicate would be one of the easiest things that we can do to take the action that we’re all asking you to take.”

While “enhancements might very well be appropriate” to expand the U.S.’s ability to penalize Russia, Toomey said he is concerned about proposals that don’t have a direct Russia connection. “The administration's proposals seem generally not to be limited to Russia nor to be time limited, and I think we should proceed very, very cautiously before we decide to expand these prosecutorial and administrative powers in areas unrelated to this invasion,” he said.