>> this hearing will come to order. the war in ukraine is at an inflection point. counter offensive to reclaim its rightful territories putin is desperate. forcing unwilling men across russia to join an illegal and increasingly unpopular war. buying rockets from north korea, drones from iran, staging sham referendums. so funny that even governments friendly to moscow have said they won't recognize him. make a mistake, ukraine continues to face a daily

nightmare of pulling neighbors and countrymen out of mass graves and children going to school in basements or fighting for their very existence. seven months into this war, putin is not where he wanted to be. thanks to the ukrainian people, more than $15 billion in weapons from the united states and a strong international coalition but it is also do to trying to isolate russia from the financial system. to strip russia of revenues reserves and access to global markets. ambassador o'brien, rosenberg, i want to take a moment to come been -- commended that the biden administration has led to impose unprecedented sanctions on russia. since february 24, 2022 the u.s. and posed a sanctions regime that would have been

unimaginable a year ago. of course that includes not just you but the hundreds of dedicated personnel that stayed in treasury who worked around-the-clock to prepare sanctions even before the invasion began. nearly 40 countries have imposed economic costs for this war. the democratic well has decoupled from russia and massive achievements in the age of global commerce. thanks to our relentless diplomacy, the u.k., eu, australia, japan and korea joined the united states and sanctioning russia. including russia's largest banks from the swift payment system. today, more than 1000 russia's had their assets frozen abroad. this is not just about seizing glitzy yachts or forcing them to unload soccer teams.

it is about ending the destruction of homes and hospitals, and schools. the mass killing of ukrainians fighting for their homelands. it is about ensuring the dream of an independent, free, thriving ukraine remains alive. just as we must keep up our support so to must we peak up the pressure of economic sanctions. i would like to highlight five areas that i think we need to focus on in order to keep the pressure up. first off, sanctions having the desire effect. we imposed sanctions not to punish but to constrain and change behavior. after sanctions changed, if not now perhaps in the coming months i would like to hear a clear assessment of how current and planned measures or further strain the russian system in the coming months and how that might change kremlin behavior.

energy, the recently announced price cap on russian oil is a welcome and creative proposal to deprive russia of revenue. how will china and india respond? will they purchase below the cap war continue to keep russia's experts afloat? we need to look at the gaps in our sanctions which would make existing sanctions more effective. or what can we do to improve enforcement? this is not only for putin but those enabling him, invading -- evading sanctions. finally i want to hear about our diplomatic efforts which will be critical in the coming months. diplomacy has made a difference in ensuring we have a united coalition and when that is willing to act. as we head into winter putin is helping -- hoping to test our coalition. how do we keep europe to gather -- together? we have to maintain our unity and our willingness to keep

meeting the needs meeting ukraine. this cannot be one with diplomacy of on each of the tolls must be used to maximum effort and in quarter rations -- coordination. i want to hear how we make this is costly for russia and how we continue to keep the pressure on putin so we can get the ukrainians the best chance to fight for their lives, their livelihood, and their country. we turn to the ranking member for his comments. >> thank you very much chairman. we shared common goals. as we look at a significant aspect and that being using financial matters to change the conduct as you, as chairman, have pointed out. i think we should focus on where

we have been paired with all the respect, i am less enamored with what has been done and i am talking about that politically but i agree we need to focus together on where we go from here. on february 24 russia initiated its premeditated and illegal invasion of ukraine. ukrainians pushed back as any country would and the result is the war that has been going on now for months. in the months since the united states imposed thousands of sections on russia leadership, properties with goals of punishing russia to force its military out of ukraine. despite the announcement of sanctions russia's invasion continues and prudent as doubling down by mobilizing hundreds of thousands of men and calling the sham referendums in the occupied regions. i think putin obviously gets

very little advice from anywhere . he treats the world like fools as if somehow holding these sham referendums, shoulders with guns and force people to vote in favor of the referendum. this sort of thing makes no difference. it will not change reality. i traveled to ukraine and suffers and the devastation russia's war has caused. genocide against ukrainian people. actions have not been stopped by our sanctions. all of these actions are worthy of sanctions. sanctions have had some success including expert control. it requires the same commitment and a greater willingness to close loopholes and target sanctions evasion and periodically update guidance in order for these actions to have long-term impact on russia. we should never return to business as usual that sadly that seems to be what is happening. for example in june the

administration announced sanctions which the treasury department referred to as the foundation of russia's defense industrial inks. one of the companies under the resting umbrella sent dozens of employees to the united states in two weeks for a major international conference. this doesn't sell my company that is being pressured by sanctions. there were actual people from the russian military industrial complex that traveled here to participate in an international conference which supposedly will better industry. the administration talks about the russian defense sector but the presence of russian defense firms in sectors of our economy speaks for itself. this is just one example of gaps across the sanctions regime. gaps have enabled russia to

weaponize against europe. as assistant secretary rosenberg stated last week russia has enjoyed windfall energy profits. russia has made over $160 billion in profits alone since the war began. the administration extended the energy related transactions with major rigid -- russian banks. it is no wonder why russian energy revenues are up in the ruble has stabilized. the administration pressured canada to provide repair to nord stream one gas pipeline. meanwhile sanctions against nord stream 2 are not limited. so russia can help europe solve the energy crisis this wednesday or -- winter.

laughable. the united states was the largest producer of oil and gas three years ago at the last of the last administration and the start of the new administration. most americans don't realize we were the largest producer of crude oil in the world surpassing all others in doing so. american companies with american workers using american resources had the capability to solve our domestic energy needs and at the same time paypal -- help our european allies. instead the administration talks about getting gas from other middle eastern countries and is still trying to open access to iranian oil which would allow russia to shut the oil around international markets. at the same time, everyone will recall on the day, the date he was sworn in as president of the united states, president biden signed an order stopping the pipeline that would have brought

$800,000 -- 800,000 arrows a day into the united states. the countries participating have already agreed not to import anymore russian oil so the price cap isn't going to do any good there. china and india aren't participating. also lack of aid enforcement mechanism. exempts many of the maritime service providers from the sanctions. so many waivers and general licenses of real impact by u.s. sanction policy simply disconnecting a small number of russian banks from the financial market is not what we were promised. public reporting indicates more than $300 billion in frozen russian assets worldwide, we should be working to confiscate and use russia's money to

provide critical humanitarian assistance to the ukrainian people. as russia looks to avoid sanctions the opportunity to seize additional russian assets i look forward to hearing from our witnesses today, really look forward to hearing how the u.s. intends to expand sanctions, enforcement to deny russia these when he spared china is watching and learning from our every move. we will also risk providing russia with the means to inflate itself from future sanctions, actions, and continue the war in ukraine. again, i want to emphasize that i say these things they are critical but are much more important in looking forward we

can do better. i really believe we can do better and it to the witnesses i would say these matters are in your hands and i look forward to hearing how we are going to do better. >> thank you, senator. we will start the testimony your full statements will be included in the record without objection. we ask you to summarize to about five minutes or so so the members of the committee can ask you questions. >> thank you, mr. chairman and ranking member and all the members of the committee. russia should and will emerge from this war defeated and weakened. the sanctions policy we are implementing tries to do, achieve three goals at the same time. one, deprive russia of resources. two, reduce partners reliance on russia and increasing our leverage and, three, keep global markets open.

that is critical for sustaining the war effort. now, i make four points. one the sanctions deny russia's resources. i disagree that with the statement that there is no impact. the impact we are having is a great roadmap to the greater success we are going to have in the future. i just want to call attention to two elements. first, due to export controls and targeted financial sanctions russia cannot buy the critical elements it needs for its war no matter how much cash the central bank of russia has. we see shortages in crucial categories, artificial intelligence, advanced materials, semi conductors. you see old technology. that is a direct result of the policies that we have put in place. there will be more of that as

the russians seek aid we go after the networks. provide help to countries that need it. we also made it very clear those who provide material support for russian sanction of asian are themselves subject to sanctions. we see this having an enormous impact in russia's ability to replace the technology. we know russia will keep trying so we watch as the tanks and cruise missiles can't be replaced and we know they will try to buy other equipment when they look to use commercial equipment it is often older equipment so this is a ways back in time. we cut them off from today's technology and they are using older and older technology. we will keep going after them as long as is necessary. the second piece is about the broader acro economic picture.

i am sure secretary rosenberg will have more to say about this. russia's economy set -- sink 2-4% this year. over the next few years it will have fewer and fewer resources to have the things it needs. it won't be able to spend money on people, weapons, procurement. we estimate half of the sovereign assets as you mentioned, about 25% of the sovereign wealth fund has been depleted this year. as i mentioned it is already at 10% federal budget cuts in the nonmilitary budget for 2023. that is the sign of a country suffering under economic distress. that is a direct result of the sanctions in place. the latest estimates are we think russia's economy by 2030 will be 20% smaller than it would be if we didn't have sanctions. we can build from that and do

more. but the critical piece that we can't measure is the friction and uncertainty that we infused into the russian system. russia has to buy equipment from unfamiliar vendors through new channels at prices it can't set and through constantly shifting ways to try to bring equipment into the country. that makes every transaction incredibly hard. friction and uncertainty are the special sauce that fatigued workers face. they are just as hard to predict as the morale of soldiers on the battlefield but it is just as real a factor in the way sanctions worked. we have designated hundreds of people who are involved in annexation, the shame of the election results. that means the world can't look

away from the violent criminality inherent in this war and if they can't look away they are not going to walk away from ukraine. her point, we are changing russia's role in the economy. russia provides commodity. they are critical for allowing people around the world to survive. so we had that happen russia is not involved in high-tech, high-value sectors of the economy such as research, i.t., and finance. that is a real change from the way russia thought of itself a few years ago. fourth, we are mitigating the effect of the war. if i may just say this here because i know it's important to some members of the committee when russia invaded ukraine, ukraine's grain exports stopped aired before the war 25% of the poorest countries in the world depended on ukraine and russia for their food. for two months, tens of millions

of people had no access to the food they normally would buy. over the last few months, with help from the eu and the u.n. we managed to get more than 10 million tons of ukrainian grain to market. we have also made clear that russian green can flow and it is moving at about prewar levels. that feeds hundreds of millions of people. in conclusion i will say sanctions are just one tool in all of government. every tool, they can't win the war by themselves. the courage and ingenuity of the ukrainian people is going to do that what sanctions can do is make it impossible for russia to take care of its people and pay for the war at the same time. they can let russian soldiers know that today is worse than yesterday and tomorrow is going to be even worse. making it possible for putin to carry out the imperial project

that he has announced which was not intended to stop with ukraine but to go on. those are the conditions that sanctions can create. i look forward to the questions. >> assistant secretary rosenberg? >> thank you, chairman, ranking member and distinguished members of the committee. the u.s. department of the treasury is working with the administration partners and investor o'brien who i am joined with today. to u.s. the government to elicit response to putin were since the invasion begin six month ago we had been advancing president biden's from is to squeeze russia's access to finances and technology. and they industrial capacity for years to come. earlier this month, we imposed

sanctions to further degrade the military, hold perpetrators of the war accountable and financially isolate putin. today hundreds of russian individuals are sanctioned including majority of the financial institutions and supply chains. and oligarchs who helped perpetuate this war. united states has been joined by over 30 countries representing our than half of the global economy and imposing the largest sanctions regime in modern history. on the other site, russian propaganda has been enough to bury unfavorable news sink sanctions are not working and to cause food insecurity. in fact, russia has crippled farming and expert economy and driven up global energy and grain prices. u.s. and partner economies have had and will continue to have a significant effect on russia's

ability to fund its war. russia has been forced to impose capital controls, it will contract for the next two years which was also mentioned. the russian stock market is about 35% below prewar level. russia is burning through its rainy day fund moving towards a deficit by years end. something for, russia's economic picture is bleak and is deteriorating. significantly, the economic constraints are translating into battlefield difficulties for precious struggling to import industrial goods and technology. russia has been forced to turn to outdated equipment. because russia is a pfizer for economy -- viable economy imposing sanctions requires external replanning

coordination, economic analysis, diplomacy, and policymaking. we have been focused on the x oil export and the windfall earnings which is noted. this represents the energy earnings. the primary source of currency. it is the nature of oil market it affects us all including american households which have seen rising prices at the pump and inflationary pressures. high energy prices hit the poorest the hardest. our effort alongside our international coalition starting with the g7 to impose a price cap to support security and affordability of the global oil supply. the policy involves price cap coalitions. prices below the cap and refrain

from doing so for oil above the cap. there is an overwhelming economic incentive for buyers to purchase so they can engage these services. it will be cheaper and less risky to move russian oil cargoes with the surfaces. we are already seeing the price cap policy work with russia forest to seek discounts. to close i would like to express my gratitude for the additional resources that congress provided in the appropriations packages with helps us in the administration in the policy response. and to the people of ukraine. i would be happy to answer your questions and i look forward to working with you all in the future. enqueue. >> we will start with a five

minute question. i will start with myself. we have had an impact, but it is not quite what we thought. in march, economists estimated contraction of the russian economy by 15% in 2022. the monetary fund showed moderate contraction of 6% this year. and the ruble has appreciated and rallied above its prewar value. there is clearly more work to do. it looks likely that russia may be behind in effort. i would like to ask you both what other effective measures are on the table particularly as we try to balance the oil revenues by maintaining security for europe and on the price cap outlook, it's a creative approach but it also requires a

delicate balancing act that requires broad buy in receive voices in europe who seem to be dissenting what is your current assessment of eu support and what is the outlook for implementing the price cap as we sit here today? >> thank you, senator. i would be happy to begin. i certainly agree we must be rigorous. and continue to enforce our sanctions and what we can as well as export controls, we can be sure russia has used tools available to try and shore up the economic pain we imposed with the sanctions we brought forward. nevertheless, further priorities for us when it comes to

enforcement and ever rigorous approach vp harris: -- include going after networks and facilitators to create and supply the battlefield equipment that it uses on the front lines. furthermore, it is critical that we work with our allies in europe and beyond to plug some of those gaps to match our sanctions one to another. where we have taken a full blocking action and to partner jurisdiction has taken something unmeasured that is not yet full blocking. that is an opportunity for us to continue to work with them to ensure they have the appropriate information and mechanism to match us. those were fairly effective ways to continue to apply pressure. when it comes to the eu's support to the price cap in a statement or g7 numbers plus the eu plunged their commitment by policy as of several months from

now the eu came forward and made the commitment to do so and we are working with them constantly, daily to bring forward the regulations in their case it will be regulation and hours it will be through administrative action. the u.k. will use legislation we are in a position to implement in the coming months. >> we have every indication that notwithstanding the difficulty, indeed it is true, a range of positions some want a tougher policy some want set different sanctions. we are moving towards implementation of the policy. >> many of the sanctions i called for in legislation have been implemented but some have not. one of the larger state owned banks is subjected to a more limited sect that predates the

invasion. what in your mind would be the trigger before blocking sanctions? >> thank you, senator for the question. we have taken sanctions for blocking sanctions on a variety of russian banks and imposing financial restriction on the largest banks. one key to the price cap policy which is you know seeks to continue to have russian oil flow but at lower prices, depressed prices, it requires the ability to pay for that oil at depressed prices which means there must be some controlled channel in order to continue to pay for that. nevertheless, i will say that we have in the last several months moved from scenarios where we imposed less than blocking sanctions on a financial institution and moved to a blocking sanction so i cannot,

in this context, forecast what sanctions will make moving forward but i take note of your point and take every opportunity to impose these. >> let me drive in the last question here because it follows on. large banks and funds sanctioned by the united states have not been targeted by the eu. our allies have targeted a host of members that we have not sanctioned. the u.s. sanctioned entities while our counterparts in europe and the g7 have not necessarily. so what explains for these existing gaps and how do we align our regimes more closely? because we all know that the more comprehensive and multilateral sanctions are, the better off we are in its effect. >> senator, to speak to this

matter, it is a priority that we have complementary and consistent sanctions across jurisdictions and that is something we discussed with colleagues. you notice some of the financial institutions the eu has not imposed full blocking measures on that as an opportunity for us to encourage our european counterparts to work with them to match ours. we will note, based on the disposition of assets it may be more impactful for europe to take full blocking actions than the united states if they don't have assets in our jurisdictions. so while we are moving towards complementarity and consistency, nevertheless, some of the priority measures for our colleagues might be ranked ahead of ours since they have a greater opportunity to impede and block assets. >> i would like for you to give us a list, heads of state or

foreign ministers from these countries. i would like to get a list of who has not made it so when we meet them we can raise the question. >> that is an excellent idea. we are pulling the wagon together it's best to have this information where we can encourage. let it be known we really appreciate what you are doing, arguably what you are doing is more important than what is happening on the battlefield. the kinds of things that you are doing are the ones that are going to bring russia to heal. it seems like putin doesn't mind at all throwing his young men into the meat grinder and the numbers of by the thousands. but the financial aspects of this are something that i suspect mean a whole lot more to him. so what you are doing is important. part of the frustration here,

and as the chairman mentioned it, at the outset we were led to believe one way or another that we would be more successful in the sanctions. we know when the sanctions it started there was a big wave if you wait, a big thing that happened that were obvious to us. companies left the country, that is a significant for russian life. the ruble as we all know came close to collapse at the beginning. now it is back up above where it was from when the war started. these are the kinds of things that make you wonder wait a second, and we all know, you have alluded to this that they have people working full time every day to avoid sanctions. as long as the sections are in place the more ways around it they are going to find. one example i can give you is

the price cap that we are talking about obviously when it comes to maritime services such as insurance, these are helpful. the problem with that is i am told that every day they are turning to maritime services that are beyond your reach in countries like china that aren't subject to this. or that we can't get. these are things that i think you need to continue to focus on. lastly, i think i would stay away from the argument that they are going to older and older technologies. that is a tough argument to make to the families of the soldiers killed by these iranian drones brought in. they are doing ok with the stinkers --stingers encountering these drones that were brought in. but we need more on the

battlefield. that is not your concern obviously that is a different lane but that is something we will continue to work on. they are doing things somewhat differently, i agree with the observation that was made that what has happened there is totally dissipated putin's vision for his imperialism. this war was already won by the ukrainians but that doesn't mean the carnage isn't going to go on. putin occupied this country and put in an averaging which was his objective and move from there to other countries. he will never occupy this country. he will go to his grave never having occupied this country. they will fight with broomsticks if necessary, all of this -- as

have had the opportunity to discuss this. they will not let putin succeed no matter what. unfortunately, that doesn't end the carnage that goes on. we appreciate what you do, we want to urge you to double your efforts in this regard because you are the ones that can really help bring this thing to an end. i have a few minutes left, your comments and ambassador o'brien? >> thank you, senator. i appreciate the comments mostly on behalf of all the people who have been working on this since before i arrived. i met with some of the visiting ukrainian soldiers i think as you did. they are the real heroes and they are the ones making the difference. we are providing them with the weapons and technology i know there will be a briefing tomorrow.

we do feel that the export controls are keeping russian weapons off. we see the conserve of the weapons that they can't get more. in that regard, i appreciate you mentioned some delegations visiting. we can provide that information. we will work together and i appreciate the offer to help us as we speak to our allies. a couple of points on how we coordinate. to some extent the diversions as a threat of coverage and we do have to make sure that even if we each had different targets at different times we then converge. i think you will see some convergence relatively soon. but in terms of what comes next, there will be more packages. we are working on more sanctions, our european colleagues said they will continue.

the president said the sanctions are here to stay and they are working with us on additional packages. so we will keep coordinating and one of the areas we will look at, we hope everything is on the table. we will work on the financial sector because very skilled professionals are working to remove functions from the banks we have designated to follow them down the chain and try to anticipate where they are moving. we will look a lot at hitec for energy exploitation and anything that might be of use. as well as continuing to work on the human rights violators and the soft power that russia tries to deploy through disinformation and other areas so we can go into more detail but i am very happy to have any advice or suggestions that you or other members of the committee have. a final note, you mentioned the iranian drones and we designated some of those involved with the

transaction paired let's go to the strength of the coalition. countries formally or informally working with us on export controls, some of my colleagues at the state department, we have about the same number of countries that are implementing strong financial sanctions. most of the global economy, still big outliers as you pointed out we need to work on those. russia is getting help from the iran, maybe belarus. that shows the strength the international community feels to what russia is doing. i know you are really helping in pushing this effort but let's never forget the constraint. >> inc. you, mr. chairman.

and thank you to both of you for being here. i think the frustration you are hearing from us is very accurately described by both chairman menendez and the ranking member. when we were told these were going to be the toughest sanctions ever on a country, and they were going to have certain impacts and we have not seen the full impact that was described to us. so i think we are anxious to know what more we can do, what more the administration can do to make these sanctions even tougher, to make it even harder for russia to operate and one of the things you said, secretary rosenberg, was the fact that our european colleagues may be better positioned because of where they are located. i would just point out as i know you are aware often, if the united states takes the lead that helps prompt our allies,

our european colleagues to follow that. so i hope we are continuing to think about that. i wonder if you could, you talked about the additional ways that we need to apply pressure i wonder if you can talk about what the plan is to do that to the extent that you can publicly and then i have to follow up on the energy issue because as senator mendez mentioned on the news this morning, the sabotage of the pipe -- pipeline. ambassador o'brien? the suggestion is that if russia sabotages the two pipeline do you have, do we have any idea what the impact of that is going to be and how that's being mitigated? >> i'm, thank you, senator.

apparently sabotage things and others are going to investigate. we have to see the result of the investigation. neither pipeline is delivering all that much energy at the moment so it won't affect but we will have to evaluate the steps going forward. we promised support for the european efforts to look into what is happening. >> one of the other of ways that we are hoping to apply pressure, increase the impact of the sanctions for both of you really as we think about going forward. >> think you, senator for the question. to go back to where you begin your comments, this is the largest sanctions the united states has undertaken along with other counterparts in the scope and scale, the private ends to to shins. the economy the international coalition that has brought this forward and i appreciate the

point you are making that russia while we are seeing the trip back up to some of the economic indicators that is what it looks like when russia has had to burn through its fiscal buffers in order to create a veil of management to seek to try. the capital controls they have put in place they have spent over 100 billion this year. >> i appreciate that and i'm sorry to interrupt my question is really more what are we doing to respond to that? recognizing that russia is taking these measures to try and keep their economy as stable as possible and reassure the public what are we doing to make sure they are not successful in that? >> i think it is critical to take the long view and play the long game. they are doing is unsustainable so we must match the intensity

of our prior efforts and continue on with it. that means applying pressure with our own additional sanctions and working with colleagues in other jurisdictions to match ours. you made a very good point about leading by example when it comes to implementation of sanctions. the same is true when it comes to enforcement. when the united states takes enforcement action that is the critical leadership function, not just on substance but also in form and methodology on enforcement actions that our partners can and will follow the united states. >> thank you i appreciate the view of the long game. while we are playing the long game the ukrainians are dying. anything we can do to speed up the efforts i think are important. final question because i am almost out of time what are we doing ticket countries like india who ought to be all in, in

terms of being willing to join the effort against russia what do we do to try to get them to work with us more closely? >> thank you, senator. we work intensively with all the governments including india. india has a long term relationship with russia. this is a time or india to reconsider where it's positioning itself geopolitically. so it is part of an all governments approach. indian companies understand their access to global financial system depends upon them complying with our sanctions. we have made that point very clear. we are working at a high level consistently with india and other countries. that is just one example of how this evolves. turkey has begun accepting an

alternative russian payment system, this is very troubling. i think through a number of communications both privately and physically by the treasury we made it clear we were concerned about this. we designated some of the russian officials involved in the payment system and now the government has instructed all turkish banks to back out of it. that is the way in which russia, we are stopping russia from insulating itself and exposing them to further sanctions to more enforcement. this happens on an ongoing basis. >> thank you thank you. >> thank you, mr. chairman. i appreciate the work being done at the department of state in putting in place bridging motion can -- the machine of sanctions.

we have in our own minds overstated the impact of sanctions. it obviously depends on the country you are dealing with. there are some countries that if we put sanctions on them, we put sanctions on us. it might be an unfair fight in a setting of that nature. i say that in part because i am looking at the statistics he provided. the stock market is down 34% our stock market is down 24% this year. so, you know, it is not the end of the world for russia if the stock market is down. the ruble is trading higher than it was before the war. you note that by 2030 there will be 20% smaller by 2030. that is a long way out. i wonder how much smaller iran's economy is as a result of the sanctions. crippling sanctions we call them. we can do with the string edges

of the economy it is at least before the percent and iran is still there and selling oil and selling military equipment. in global markets, if we cut off access to certain technologies russia would want to purchase they can find ways around it. they are fans with china and india, those are big countries with lots of technology. some places will represent gaps that i think that we have to have a more clear assessment and congress's mind as to just what the impact of sanctions can do. i know many of my friends think the chinese better be watching because they can see this can happen to them. really? just what would be the impact?

who would hurting who the most? i guess i look for a more precise estimate of the impact sanctions will have. not that we've don't do them, of course we do. but we want to make sure we don't overestimate and plan on reactions that otherwise would not occur. i guess, am i missing this? am i underestimating this? we don't have a very clear view of what is happening in russia. we think some things will be happening but the indications so far are it wasn't as crippling as we thought on russia. i wonder if that teaches us a lesson that should be important to us as we consider sanction regimes in the future. mr. secretary, you might read and then me turn to the ambassador. >> thank you, senator i'm happy

to address the point. there are a couple of things to bear in mind first we must be humble and we cannot rest on the world. we must the rigorous in how we move forward. what we are seeing in russia's intensive use of fiscal stimulus to try and disguise the true pain of its economy, we must continue to force them to burn through the entirety of the buffers they have in place. it's that motivation which has let us to the price cap policy. the largest source of our currency is from energy sales. while we can sever brushes access to the international financial system with sanctions and we can impede the ability to earn money and revenue-generating sectors, it's an energy where we must focus our attention and deny russia the revenue. without that currency, it will not be able to continue to

support its economy and disguise the cratering economic conditions. >> i can but the reality is if the country has oil, they will be able to get money for it. if we were putting sanctions on a nation that didn't have raw materials and oil, though sanctions with the really tough but with russia, we can try and do all sorts of things but if you have oil and you got gas and coal, and you got gold you will be able to get money. ambassador? >> it's an issue we struggle with every day. i agree with you. particularly being humbled about projections of what will happen. i will get back to you with the point on iran i don't have that with me now. but it is a good comparison. obviously, russia's ambitions are very different so the scale, i do agree with the ranking member that it is taking a very serious head.

sanctions are one tool then i just want, to pieces in addition to what system rosenberg -- secretary rosenberg mentioned. that's why i emphasize the expert control and at the restrictions on the ability to finance major purchases. we see that they can't buy the things they want to use on the battlefield. this is expanding and we will keep growing. this is impossible to quantify. as i mentioned, it is like the effect of soldiers morale during the battle. at some point, the system becomes so rickety and improvised that it can't succeed. when you had a great career making businesses more efficient and russia is not a system that is built upon improvisation, lies, and guesses that just can't go on for long. but it is impossible to put one number against that but it is how a sanctions program has

really had an effect. >> thank you. >> thank you, mr. chairman. thank you both for being here. i want to applaud the administration's effort with respect to supporting ukraine and punishing russia. and congress has been an important key partner in that effort. i think we have about $15 billion as part of the continuing resolution in support of ukraine. as you mentioned, in response to senator romney the hole in our sanctions as the revenue, record revenue and record profits. oil and gas. of energy. oil and gas. >> i share the concerns that sherman menendez raised at the beginning of the hearing, regarding holes and proposed sanction regimes coming up with respect to the price cap.

i would like to drill down more on it because it is a creative idea, and i want to applaud the administration for the price cap idea with the g7. a couple questions as to how you envision that being enacted. i assume there will be penalties on entities from participating countries if they don't comply, right? isn't that right? i mean, if you are an entity in one of the participating countries and you don't -- but knowingly don't comply with the price cap, there will be penalties, right? >> that is correct. >> so there will be sanctions on those countries, do you envision them being applied by each participating country? >> yes, they can, they can also be -- if you are talking about enforcement actions. >> yes. >> yes, they could also be applied by other jurisdictions, which there is, for example, a

service provider, but there are two different jurisdictions, so there is an opportunity for multiple. >> so in that example, you talk about the participating g7 country and the united states when we talk about dollar transactions. >> yes. >> but we have no plan to enforce the price cap on any countries that do not participate in the price cap, isn't that right? >> to play out an example here in order to answer this question, if, for example, we have a country that is purchasing oil not under the price cap and using entirely non-g7 services, there is not a jurisdictional length. i would note that we believe the powerful economic incentive for them to use services in the jurisdictions and the risk involved in not using the services will direct, in

addition to which russia does not have sufficient services in order to completely backfill all of the barrels that currently -- that would flow through g7. >> i understand. that is applying the penalty on the servicers that are participating under the g7 framework. it is not a sanction against entities that are not part of that servicing network, and i agree. if i could because my time is short, this is why senator toomey and i introduced the secondary sanctions regime because it is argued that if you are talking about a country like china, and you are talking about a time where we have to be in this for the long haul, and you agree with that, there is a real opportunity if there are no penalties applied to china, for example, for buying into the

price gap, that the whole thing could unravel, so, i guess, if all of this works as you expect, what is the downside of creating penalties, not just for servicers and entities in the g7 sort of framework but beyond that? >> senator, we currently have authority to name entities with sanctions that compel g7 service providers to violate sanctions. that is to say there is an opportunity to go after entities outside of the g7 countries if they are violating these measures, and in some way have a jurisdictional cook to ours. >> i understand that what you're saying is they use cursive measures to say, if you do not participate with us in evading the price cap, you can go after, but, again, it does leave a network. admittedly, not a huge network

outside the g7 countries, that would be free to purchase russian oil above the price cap. i think over time, because markets that just, can adjust quickly and oil traders can adjust quickly, over time, that leaves, i think, eight big hole in what i think is a really good idea and concept. we are working with you and your team and are happy to continue conversations as we introduce the final bill. thank you, mr. chairman. >> senator young? >> thank you, chairman. i think -- i thank our witnesses for being here. part of the hearing is keeping the pressures on russia and its enablers. with that in mind, i'm thinking perhaps it is time that the president considers more of an asymmetric approach to isolate

putin from his allies. for example, the burmese military has positioned itself, as putin, arguably, most critical post invasion partner in asia. moscow has readily backed them in return, diplomatically and by arms sales, totaling over $1.7 billion over the last 20 years. has the administration -- mr. o'brien, has that demonstration considered reinforcements of arms embargoes against the burmese military or imposing sanctions? >> yeah. >> oh, ok. very good. what has been the result of that reflection and consideration? >> we are looking at the pillars -- i mean, we have 27 institutions and working with our regional partners to target

them and push toward free and fair elections. >> to leverage those relationships in particular. >> as with the russia sanctions, directly, we need to make sure our partners have options that increases their leverage, and we are looking at the pillars of support of the regime. we have sanctioned, as the ranking member noted, and we will see what we need to do more there, as well. >> among the menu of options you have visited, you looked at some traditional sanctions or trade measures like revoking access to eu trade preference and that might be among the menu of options, what do you think about that one? >> that is not ours, but i think -- >> you are no doubt developing

these policies in concert with allies, right? >> yes, and i think maybe it would make sense to have a conversation in another forum. i do not want to foreshadow actions we may take, but we are very focused on the continued threat that imposes to its own citizens and relationship to russia, and we are developed in -- developing ways to wear our partners can be sanctioned in policy. i am happy to talk over it the next week if you would like. >> i look forward to doing that. i represent a sizable burmese american population, so that is in part my interest in this topic. part of the engagement is beijing's engagements. particularly in 2006, when beijing became an active intermediary with russia. you will recall, they secured

moscow's backing, allowing for a historic double beat on the security council, scrutinizing their activities. this all comes, despite the regime's historic reluctance and suspicion in dealing with china, in your opinion, what is beijing's endgame in supporting this diplomatic relationship? >> i think the economic relationships run deep. there is a longtime security relationship on the border, so they have got natural inclination to working together. we are looking at the ways in which our policies might be able to adjust that, but that might be a topic for discussion. >> guesser, and one of the other things on record that i look forward to exploring with you and your team is how some other bigger regional players like china or india might respond to

targeted sanctions against the burmese. with that, i will yield back, mr. chairman. >> ok. so, in the absence of any member presently being here, i have additional questions, and we will see if anybody else joins us. ambassador brian, first of all, only a handful of countries have been willing to impose sanctions. how are we working to broaden the coalition of sanction partners and working to hold russia accountable? and beyond the price cap, what are we doing to prevent countries like china and india from taking advantage of the chance to trade and help russia a cup for its losses? -- makeup for its losses?

>> thank you, mr. chairman. the first step is to make sure sanctions are complied with i anyone who touches our system. this was the heart of the exchange. we see the private sectors around the globe being very interested in continuing their access, so the private sectors in china, india and elsewhere are well attuned and well aware of what they can and cannot do. even companies with substantial state ownership are aware and attuned to what we expect, so the coalition, in fact, is the coalition and those running alongside it, in fact, is pretty robust. where there are specific problems, we raised them with governments and take appropriate actions, sometimes in law enforcement channels or other

channels, and sometimes through sanctions and activity. more generally broadening the coalition -- >> excuse me, china and india are both actively engaged in making a variety of purchases from russia. i have not seen any actions against either one. >> well, the actions we have seen our winds allowed under the sanctions, which i realize may be your point, but it is not that we are negligent in enforcing the sanctions, it is that much of the trade is in commodities that are important. this also goes to keeping the coalition strong because there are many lower and middle income countries around the world that need the global markets to function, and that includes allowing russian and ukrainian products to reach them. turkey re-exports 70% of any wheat and grain gets from russia and ukraine to africa, so although that number looks like a lot of trade, it actually is

imparted keeping the global coalition in a place where we are able to sustain the support from ukraine. >> china is not a lower middle income country, right? >> technically -- well, i think china's role in this is interesting because i think the chinese have made clear, including publicly, that the war strikes them as not going well. we have all seen the exchange last week or two weeks ago. i think we will continue to work with the chinese to ensure they understand where our sanctions operate and that that has an effect on the way they engage with russia. >> i just have a big supporter of the u.s.-india relationship, but now india as part of the quad. it has to act as part of it, not only vis-a-vis china but beyond that. kazakhstan is considered to be russia's closest ally, second to belarus, yet, recent reports

regarding the decision to crackdown on loopholes allowing russia and belarusian trackers to transport cargo across russia to kazakhstan suggested the relationship may be fizzling. what steps are we taking for opportunities to put further pressure on russia as a result of the divisions deepening between them and their central asian partners? >> great point. the central asian countries have been economies largely entwined with russia, kazakhstan's access to european markets was by way of russia, and its agricultural exports, many countries have substantial remittances coming from, grades who work in russia and send the money home. so we are working to provide them options, whether that is physical alternative routes and other ways to develop investment in cash.

over the last week, secretary lincoln met with five foreign ministers of the central asian countries. we have provided them with guidance on how to implement our stations. we followed up with specific concerns and we will have conversations on what precisely they can do, and i think we will see all of those countries and they will be happy to have alternatives to the relationship they have had with moscow before, so we will continue to work with that. >> senator cornyn? >> thank you. thank you to both of you for your work. i agree with the chairman and ranking member, we have made a lot of progress we have gaps and inconsistencies between our european allies, ourselves, and our global partners. we should be looking at ways we can strengthen the sanctions, so the part you point out areas you pointed out a lot of ways in which it helps taking resources away from russia that can be

used for its military to deal with the inability to deal with it supply chain through the material and equipment that cannot get into russia. i want to raise an additional point here and that is, winning this war is holding russia accountable, in addition to protecting ukraine sovereignty for the destruction it has cause, and to hold those responsible for the atrocities criminally responsible for their activities. one of the points about individual sanctions, one of the points about putting the spotlight on the people that are committing the atrocities is that there will come a point that those around mr. putin and those in the military recognize that their future may be at the head, and they may wish to cleanse themselves from the

atrocities being committed. one of the ways that we make that point very clear as to individual sanctions. i do appreciate that the united states has been strong on the individual section front, but, as you pointed out, we can do more. the atrocities are continuing, so our spotlight on those committing these atrocities need to be keep up with, unfortunately, the activities that are occurring through mr. putin's direction. i would like to get your assessment as to how we are working with those that recognize accountability must be part of the ultimate victory here and the way that we use our individual sanctions gives a roadmap to those that will be ultimately responsible for this part of accountability. >> mr. ambassador, you want to

start? >> thank you, senator. you have been a champion on these issues for all of my time working in public service, and i appreciate the support. i completely agree with you. i think it is necessary to highlight the criminality and the violence that is intrinsic to this imperial campaign, so one of the buckets and which our sanctions work is to highlight the atrocities that are being committed. anything that goes to indicating the illegitimacy of the project, so we have sanctioned those scores on hundreds of individuals as we learn and we will sanction more as we learn about the institutions part of this. we will continue to designate those, so any russian backed institution established in the occupied area is a target for

designation and likely to be so, and that is part of a policy for the other work that others are doing, and i know you know it well, and they are working to support investigations and documentation of the atrocities and making clear that, as you say, for many people, their future may well be hanging. >> a lot of times there are pressures on the economic section front, and the individual section front may not have the same degree of his ability or attention, so surely that is not the case in your work -- so surely that is not the case in your work. >> there are two points i went to make that complement my colleague and what he just said. individual sanctions on ultrahigh net worth individuals, in particular, are particularly critical in the sanctions regime. they do a number of things. first, they identify and send a powerful message, as indicated, and it will also lock up the

assets of the individuals and their holdings from their position from president putin or those who otherwise facilitate his decision-making. the so-called repo task force and oligarch task force, which is the treasury department and justice department here in the u.s. and their counterparts in the g-7 countries, have worked together to enforce these ultra high net worth or individual sanctions across our jurisdiction and have locked up or frozen over $30 billion related to the individuals. that is material for our purposes here. criminality associated with some of these individuals is established and we have the opportunity not just to freeze these assets but use them for purposes of restitution for the ukrainian people, which is a unique opportunity of great significance for this program given the ukrainian people that we all seek to support and

address in this broader sanctions program. >> i am sure we are going to put more attention to that area as we get later to the restitution issues in ukraine itself, thank you mr. chairman. >> thank you. i have one final question for you, ambassador. since we have you here, we are obviously devoting extensive resources to russia sanctions, as we should, but i wonder whether this comes at the expense of our ability to respond effectively in other regions, for example, despite horrific conflicts in ethiopia, where fighting has killed an estimated half a million people alone, the administration has not sanctioned any ethiopians for gross violations of human rights. clearly, there are ethiopians who have been caught of gross violations of human rights. likewise, the administration has

not sanctioned senior force officials in sudan for the killing of more than 100 democracy protesters since the tray 21 coup, who have been working to export sudanese coulter russia, so it needs to happen to ensure a proactive approach in these areas? >> thank you, mr. chairman. your attention to these areas is very much appreciated. i do not want to foreshadow what we are doing. we could have a discussion with some of my colleagues from the policy side. part of the mandate that this committee shape for my office is to ensure that sanctions are properly used as part of an effective policy, and i have spoken with the ambassador, and we are focused on the issues who are focused from sudan across to

west africa. i think in that regard, it would be great to have a conversation about where we see things moving . the influence of russia is something that -- well, how to put this -- well, we are well aware of the operations, and the advertising himself across the region makes it very -- a very high priority target, and in addition, i think it is very important to us, so maybe we can have a conversation in another venue for that. >> i would be happy to have a conversation in another venue, but let me just say, i think one of our challenges in our station policy more broadly declined is if you are committing human rights violations, as clearly it is happening in ethiopia, if you

are committing human rights violations in sudan, and other places of the world, yet, we do not sanctioned them, and we have full knowledge of it, then, what is the global message, what is the global message to other authoritarian actors in the world about, well, they pick and choose when they went to do it? i understand broader policy constructs and sanctions within that context, but i also think there is a gnawing question for those of us who are big advocates for human rights and democracy, the lack of our sanctioned policy, when it is so clear and obvious that there are parties here that are clearly have blood on their hands, yet, and it is not that we do not know who they are. we do. >> i think that is problematic set of circumstances, as we deal

in broader policy constructs and as it relates to these countries because i have a feeling that as it relates particularly to ethiopia, some of your colleagues have an aspiration, but it is not an aspiration that is being realized and in the interim, half a million people have been killed. how long do you wait before the aspiration is realized and until you use one of your tools? we only have a handful of them. so, at the end of the day, i welcome, and i will have my staff reach out to you, and you bring in whoever you want, and in any setting you want, but i want to have a serious conversation about why we don't see action in some of these things, and someone will have to make a case to me that it is better for our ultimate goals and to save the lives of people that we not pursue any sanctions

, so i am looking forward to that. >> i appreciate the attention, and i agree with you. i am told senator kaine is on his way, but i don't know how long we can keep this open and waiting for a colleague, so if he is here, he is here. if he is not, he is not. we have anything? >> [indiscernible] >> is it a spanish minute or a regular minute? i can say that as someone who is hispanic because a spanish minute is probably a little longer. >> he is in the building. >> all right. well, i was not going to belabor the point, but do we have -- you work with your colleagues, ambassador, obviously, in the promotion of the sanctions and

bilateral relationships that are challenging. what about hungary? it seems to be one of the roadblocks as we deal to cohesion over sanctions. >> we have made clear our support for the position of 26 of the 27. obviously, hungary has its own difficulties right now with the european institutions. we strongly support the emphasis on the rule of law and hungary -- in hungary, and we are very concerned about the prospect of russian influence operating through hungary and are calling attention to that and all the channels we can find. senator, as a minor point, one piece at the eu did, a decision

made in july, was to align all of the sanctions programs so they all roll over at once, and this makes it very difficult for one country to stand up and block everything, as opposed to before, when they could pick one small item and try to stand up. i think that is part of the strategy of focusing attention where it needs to be and making it easier for us than to bring whatever tools we have. >> so you do not think he will be an impediment to the necessary or for the eu to enforce it sanctions? >> i'm not going to predict. i think that the gravity in this situation runs toward maintaining the coalition and keeping everything moving well. >> senator kaine, i have been filibustering here for you, and i have gotten precious information in doing so. >> thank you, mr. chairman thank

you to the witnesses. i will not ask you to repeat questions i'm sure colleagues have asked, but one of the things i am interested in, and i know questions have been asked about european solidarity and how that is going to hang together as we get into winter with energy challenges, if you could talk about the potential role or the current or potential role of the osce. we often talk about nato and that is a flashpoint with nato, but the osce is the broader organization that includes many european nations that are not members of nato, including russia, and it struck me that during the last administration, i started to notice maybe a little more activities in the osce, associate with me, -- so share with me, is there value that that institution is bringing or can bring to this very, very difficult problem? >> thank you, senator.

the oh sce formed -- the osce formed around the values of the west, and in this conflict, it has allowed us to clarify what it takes to be a member of the rule abiding group, so the osce has a set of standards that are important as we move forward. i know the secretary has been looking at the democratic elections in the next week. that will be a key place to highlight some of the important steps government can't reinforce the rule of law, having free and fair elections and taking steps against corruption. that is very important, particularly through central asia and i was just meeting yesterday with a visiting minister. this was one of the focal areas of the meeting, and you see the

osce is a place in which we refine the standards and help one another, so that is one particular role. it is peace and security role is something we could come back and review you on war with russia there and it becomes more difficult, but the role and the rule of law to democratic standards is a vitally important one. >> i imagine you have been asked this, but if i could, what grade would you give to our allies in terms of regular sleep complying with sanctions -- rigorously comply with sanctions and i know it varies country to country, but if you could give me a more general answer first, and if there are things we can do to improve the bite of the sanctions and reduce running around the sanctions, which we do. >> thank you for the question. we work extremely closely with our colleagues in europe and

elsewhere to bring forward sanctions, sharing information to construct packages and the technical work of implementing them and enforcing them, sharing information for enforcement actions that they can take in their jurisdiction or we can take in our jurisdiction. sanctions we have brought forward with respect to mercer are unprecedented and there are scopes and scales, and a number of partners involved, in addition to european partners with whom we work and work closely. also, partners in east asia, this is the first time that they have brought forward the kind of sanctions program on an individual country outside of a u.n. framework, and the same as for eastern asian partners. the exchanges we have had, including with asian allies, has been unprecedented. furthermore, there is a development of technical implementation here that is fresh and this experience here

that information showing downgrading of information in order to construct these packages and enforce them, and also the mechanisms for things like licensing, guidance, this is brand-new territory for many allies, and they work at lightning speed to implement it. it is eight feet and sets us up for other shared encounters we may have in the future. >> i will conclude and say that my colleagues know i don't mind criticizing ministrations that are democratic or republican if things are going wrong, not that everything with respect to response with ukraine has gone writer perfectly, but you confronted a difficult challenge, which is european nations, including ukraine did not believe there would be an invasion and we believe there would be. with the same facts, we had different predictions about what would happen. i think with the administration did given that challenge was really a dry in pre-meditating

consequences that would be if we turned out to be right and they were wrong, and when the administration put consequences in place in advance, i just get that very, very high marks and i appreciate your role. with that, i yield back. >> thank you. my filibustering for you allow two other colleagues to make it here on time before the end of the hearing, so senator portman is next. >> thank you. i had to step out for a markup, but i appreciate you holding this hearing and your vigilance and ensuring that we can put the squeeze on russia because that is all it is going to get them at the table. i will say earlier, there was discussion by mr. o'brien about the fact that we need to demonstrate the violence and criminality going on in ukraine and atrocities are clear.

a month ago, i sour the masquerade's were and we learned about last week, which is northeast ukraine, which has been liberated, tortured, raped, executions of civilians forgetting the bombings of apartment buildings, churches and hospitals, forgetting that they are taking kids and keeping them in ukraine and these are actually definitions of genocide. this is going on as we talk, and what are we doing about it? we are helping ukrainians militarily, and that has been helpful to the successes on the battlefield. that is out of takes to get to putin. he has got to feel pressure at home, and i don't think they are feeling the squeeze. i appreciate what you're doing and i agree with what senator kaine said, but we have to realize that this is not work yet. you look at these numbers, you

said the russian economy is oblique and deteriorating. that is how i would describe the ukrainian economy, down 40% to 50%. 40% to 50% gdp this year. how about the russian economy, how far is it down this year? aced on imf numbers we have, it is down 8.5% in 2022. our economy is down this year a couple of points, so a .5% versus 45% or 40% to 50%, the economic comparison is, to me, concerning. so, i am not sure they are feeling the squeeze in terms of the sanctions. they are starting to feel the battlefield successions by the ukrainians and that will help get them to table. we have to tighten the squeeze on russia if we agree with what they are doing our atrocities, and i agree, and so does the free world. energy.

in russia, the revenue russia is getting from revenue is up -- energy is up 30% this year. is that accurate? up 30% this year. that is funding the war machine. so, my questions are many, but i would like to reiterate the importance of europe and their dependents which we have talked about before, and i have given speeches that europe needs to do more, and imports are up for lng, which are twice as high as they were last september and i am all for lng exports from us in the middle east and from other countries. and the share of russian natural gas has gone down, and that is good, but the treasury department has renewed the general license, which allowed certain energy transactions to continue. is the treasury department prepared to sanction

entities or do they plan to extend them? >> thank you. i cannot agree more that we need to be laser focused on russia's windfall earnings from energy, and in order to fund its brutal war, that has led to this price cap policy amongst the g-7, which would seek to keep russian oil for -- flowing at a lower price to deny their revenue. one thing to note, you have mentioned that this is, as you note, a method by which purchasers of russian oil can continue to pay for that oil and the price cap policy, in keeping that oil on the market, is at lower prices requires that they be able to purchase it. that is part of the conceived policy here which would keep the oil on the market, but as we have noted, diminish the revenue, so that is part and

parcel of water policy. it is different from prior sanctions which focused on denying volume rather than revenue, given that the interconnectivity of russians economy with so many others for commodities, energy, in particular, as part of it. >> let me be sure i understand what you are saying, you are saying that general might be extended in early december because, instead, you believe that the price cap is more important and that should be used instead of energy sanctions under the license, is that what you are saying? >> i am not in the position to forecast what will happen with this or other general, but i would emphasize that in order for the policy to successfully deprive russia of revenue by pushing down the price, there must be a means to pay for it. >> have you set a price yet for the price cap? >> senator, the process has

begun to set the price. >> yes or no. >> currently, it has begun to set the price. >> have you set a price yet, yes or no? >> we are in the process. >> have he said -- have you set a price, yes or no? >> i appreciate your question, but we have begun the process. >> so the answer is, no, you have acknowledged that, correct? >> i appreciate your question, we have begun the process. >> the answer is no because they have not established it yet, they are in the process. so if you ask what is the price cap, there is no price cap to give you, but they are in the process of establishing it. >> i think it is more effective. i understand what you are doing with the price cap, and it is difficult to do, and my hope is

that they will not license it and we can continue to do it we can to squeeze rush on the economic side. that has to be through energy. >> thank you. senator? > miss rosenberg, for decades, iran has used russia to evade sanctions. recently, we saw the situation reversed with russia using iran as the hub to evade sanctions and response to positivist aggression. the iranian regime has been supplying putin with drones that threatened to stall the process -- progress they have made. some of the iranian drone factors and transportation companies were a good start, but it has not worked. i ran continues to supply these and i believe one of the reasons it has not worked is because it

stopped short of targeting the iranian banks, including the central banks that enable the sales with the same powerful authorities you have used elsewhere. why hasn't the biden administration imposed additional sanctions on iranian banks involved in the supply of weapons to russia? >> thank you for your question. it is particularly were fine and egregious when it is able to use entities and individuals to supply its military equipment and materials in violation of sanctions, and in the instance you were talking about from earlier this month were redesignated iranian entities applying drones to russia, that is an example of russia's evasion that we are applying to an entity, and we are looking for opportunities to go after the nodes that individuals are using to feel this battlefield

and equipment. >> miss rosenberg, i, little dismayed with every word you said was a non-response to my question. my question was, why hasn't the biden administration imposed additional sanctions on iranian banks involved in the supply of weapons to russia? let me try it again, -- >> senator, we are looking for good opportunities for relevant intelligence and information to substantiate packages to go after evasion networks, including with respect to iran, so i take your point and appreciate this one. i would be happy to continue talking with you and your staff and to put together the packages to do so. this is a priority for us, looking at iranian and north korean supplying of russian material. >> ok, let's take that answer at face value, do you commit to this committee to maintaining

powerful secondary sanctions on iranian banks and especially the iranian central bank for their role in supplying weapons to russia, even if there is another nuclear deal? >> thank you for the question i can't commit to this committee to powerfully imposing and enforcing sanctions on any invasion or network, iranian or otherwise, that supplies russia with literary equipment to fund this brutal war. >> how about this one, iranian central bank? >> funding facilitation of financial or material means, those are all priorities across the administration. >> but you have not done it yet? >> we have gone after a variety of inflationary networks -- >> but not the banks? > we have named financial nodes in different instances, and, furthermore, companies acting as financial cutouts.

russians, unfortunately, our best in class activating. >> at the end of the day, it is not obligated. the banks are doing this. it is not class act evasion. they are doing it openly. does the biden administration have the political willingness to sanction them or is the iran deal that is such a holy grail for this white house that they are willing to look a blind eye while the iranian banks fund weapons that are being used by putin to kill ukrainians right now in the midst of the evasion? >> i think we share the pickle -- the political commitment and intensity of focus with as many of the members of the committee in congress to go after evasion area individuals and networks and entities wherever they may be located. >> let's change the topic for a second and go to another aspect that contributed to the war in ukraine, which is nordstrom two and nord stream 1.

i authored legislation sanctioning nordstrom two to stop the construction of nordstrom two until president biden weighed those, -- waive those, which allowed putin to complete them and because the invasion of ukraine. right now, it appears both pipelines have been bombed or destroyed or sabotaged in some way. that sabotage was carried out by the united states, russia, or by some third party. i assume you're not going to tell this administration if it was the biden administration to blow up those pipelines? >> i would be happy to refer to my colleagues in the state department that authorities for nordstrom two run deeper. >> senator, we have served it is apparent sabotage with investigations happening in europe. we will see what they turn up. >> does that mean you will not tell us what was the biden administration? >> senator, i think even the

question poses a premise that is impossible to answer in an effective way. >> you can answer yes or no, but let me ask this because my time is expired. i think the pipeline being out of commission is good for the united states and europe. would you agree it would have been much better. those pipelines using our sanction authority, which had been successful, rather than what we have now, which is an environmental disaster due to the sabotage? would you agree sanctions would have been a much more effective way to do this? >> senator, to the point of european energy security and denying russia economic advantage and opportunity and the opportunity to engage in a manipulation for europe on the end of the pipeline, i think there is a variety of different ways, and i appreciate the collaboration we have had with the committee and congress in

general with addressing the key priorities. i think were broadly on the sanctions versus diplomacy and energy supply relationships, eight is the combination of all of them that can best advance our purposes. >> you are not willing to answer that question. >> thank you, mr. chairman. i would like to thank our two witnesses for your engagement in implementing the biden administration's global leadership in pulling together our allies, not just in western europe but around the world and imposing sanctions on russia and their brutal invasion of ukraine. i may have missed the exchange of this particular point, but are there additional economic sanctions you are urging we support or authorize that the

administration is considering that would impose significant and effective additional cost on russia, and if so, what are they? >> thank you for the question. there are two main themes that they would like to dress in answering your question. the first is the continuation of targeting financial institution and military and industrial supply chains. that is critical in order to have revenue to fund its little war, not only the u.s. position and enforcement of the measures, but also implementation and enforcement by colleagues and counterparts in europe and other jurisdictions that have parallel measures with an opportunity to them to match us in measures and likewise. >> should we be considering revoking russia's membership in institutions like the imf or the world bank? that would be a significant and bold step. i would be interested in hearing your opinions on whether further

removing them from these multilateral financial institutions would have some positive impact, miss rosenberg and mr. o'brien? >> thank you. this question is relevant not just for financial institutions but multilateral bodies in which russia has membership. the principal that, if i may, the administration has thought to consider when evaluating each of these is russia should not be denied opportunity for decision-making and leadership in forms where it is unacceptable for it to continue to play a leadership role. the bylaws of different organizations, institutions create different pathways here, whether excluding russia entirely or depriving it of leadership and decision-making, so it is different from institution to institution or multilateral body, but we are committed to the principle that russia should not be in the position to hold a veto over

policy that other members would seek to advance. >> let me ask you one more question and then i will return to mr. o'brien. he is treasury looking seriously at using russian asset seizures as a way to re-fund reconstruction efforts in ukraine? >> thank you for your question. this is a major priority for the administration. i know many are focused on this, and i expect that some of our department of justice colleagues may have the chance to share with you preliminary thinking on this matter. the administration did suggest to spend -- did have a suggestion up on the hill, not included in a package, but this is an area we like to focus on, the concept of constitution is key for many of us, the mode and mechanisms require detailed work, including with allies. >> i would be interested in your

views on the consequences for relationships for us to impose additional secondary sanctions or impose secondary sanctions against nations that we otherwise have good relationships with further ongoing business dealings with russia, just hypothetically, turkey, the uae, india, what were the consequences be of are trying to carry out the things miss rosenberg is talking about, driving the russians out of position, leadership, will to lateral financial institutions enforcing secondary sanctions, seizing assets and using them for reconstruction? >> the point is we have many tools to get countries into compliance with sanctions. many of the countries actually want to be invited to be part of it or have access to designations and controls and

etc.. so, in each of those situations -- and a number of other countries with different relationships with russia, we find ourselves inactive conversations about how they can retool their economies to not be completely dependent on russia and how they can develop the mechanisms needed to enforce the sanctions to comply with them, and while we are working with governments, the private sectors are well aware of what will make them vulnerable to sanctions, so we do see, and then i will close with this point, as we mentioned in a particular conversation earlier, sometimes if we designate the russian counterparty, then that causes institutions and some of those countries to say they can no longer continue working in an area, so we do not necessarily have to use to employ these tools against friendly countries, but we are able to achieve the same result in other ways. >> i would like to thank you both for your testimony and for your work and to recognize the

administration success so far in pulling together a very wide range and desperate partners, but also urge you to sharpen and focus this work because of the urgency of imposing greater sanctions on russia for its invasion of ukraine. >> the record of this hearing will remain open until the close of business tomorrow. and with the committee, this hearing has adjourned.