Representative Brad Sherman (D-CA) has introduced an amendment to the National Defense Authorization Act (NDAA) aimed at strengthening compliance with sanctions on Russian digital assets. Submitted to the Rules Committee, the amendment seeks to enhance enforcement mechanisms for transactions involving sanctioned Russian entities in the digital asset space, ensuring strict adherence to U.S. sanctions policies.

Under this proposal, within 90 days of the NDAA's enactment, the President must report to Congress identifying any foreign individuals operating digital asset trading platforms or facilitating digital asset transactions who have materially assisted in evading U.S. sanctions related to Russia. The President is authorized to use powers under the International Emergency Economic Powers Act to block transactions involving these identified individuals if their assets fall within U.S. jurisdiction. The amendment grants the President the authority to enforce penalties for violations, with a provision for a national security waiver allowing sanctions to be waived if deemed in U.S. national interests, provided Congress is notified.

Additionally, the Secretary of the Treasury may prohibit transactions involving digital asset addresses linked to Russian entities if deemed necessary for national interests, with a report to Congress required within 90 days of such determinations. The Financial Crimes Enforcement Network (FinCEN) will mandate reporting by U.S. persons of digital asset transactions exceeding $10,000 through foreign accounts. The Secretary of the Treasury will also provide periodic reports to Congress detailing the implementation progress and identifying high-risk digital asset trading platforms.

Fox Business’ Eleanor Terrett noted, “It's worth noting that the NDAA is essential legislation and amendments like this one are likely to be included without issue. Similar amendments may appear as members seek to attach other bills to the NDAA.”