Last week, U.S. Senators Todd Young (R-Ind.), Marco Rubio (R-Fla.), and Rick Scott (R-Fla.) introduced the Crippling Unhinged Russian Belligerence and Chinese Involvement in Putin’s Schemes (CURB CIPS) Act to sanction Chinese financial institutions that conduct transactions with any Russian financial institutions using alternative financial messaging systems to the Society for Worldwide Interbank Financial Telecommunication (SWIFT).
Young
Specifically, sanctions would apply to any Chinese financial institutions making such transactions using the Cross-border Interbank Payment System (CIPS), Beijing’s alternative to the SWIFT global payments system, or the Russian System for Transfer of Financial Messaging (SPFS), the Russian alternative to SWIFT. Young’s bill would freeze or terminate any U.S.-based accounts connected to Chinese financial institutions – or block the U.S.-based property of such institutions – that engage in transactions with a Russian financial institution using either CIPS or SPFS.
“The U.S. and its allies have acted decisively by imposing massive financial costs on Russia for its outrageous invasion of Ukraine,” Sen. Young said. “But that is only the first step. This bill makes it clear that there can be no safe haven, no financial off-ramps for Putin and his cronies to evade sanctions through Chinese financial channels. China needs to think long and hard about the costs of siding with Putin in his barbaric attack on Ukraine.”
The Crippling Unhinged Russian Belligerence and Chinese Involvement in Putin’s Schemes (CURB CIPS) Act would:
- Direct the Secretary of the Treasury to impose sanctions on any Chinese financial institution that uses CIPS or SPFS to verify or conduct a transaction with any Russian financial institution or a financial institution in Russia-controlled territories;
- Include sanctions that would terminate or prohibit any correspondent accounts or payable-through accounts of offending Chinese financial institutions in the U.S., or block all transactions in property of such institutions in the United States or in the possession of a U.S. person; and
- Require a report from Treasury outlining the scope and usage of CIPS and SPFS 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.