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WASHINGTON – On November 19, 2024, the Treasury Department hosted the third annual conference on the Committee on Foreign Investment in the United States (CFIUS) in Washington, DC. The conference featured speakers from each of the CFIUS member departments and agencies as well as other departments and agencies involved in the CFIUS process. The conference is an opportunity for CFIUS to educate the business community and stakeholders more broadly on the goals and operations of CFIUS, recent developments, and sectors of importance to national security.

The topics discussed included compliance and enforcement, geographical proximity of real estate to sensitive sites and its bearing on national security considerations, and considerations around technology, infrastructure, and data. Speakers emphasized the goals of CFIUS in safeguarding national security while operating against the backdrop of the longstanding U.S. open investment policy.

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As Prepared for Delivery 

Good afternoon. It’s an honor to welcome President Clinton to Treasury today to mark the recent 30th anniversary of the establishment of the Community Development Financial Institutions Fund.

President Clinton and I have a long-standing shared belief that increasing access to economic opportunity for people and places that historically have been underserved is crucially important, both as a matter of fairness and because it bolsters our country’s economic strength.

CDFIs play a key role in achieving this objective. They’re better positioned than traditional banks to reach underserved communities and offer essential financial services, from home mortgages to small business loans. And over decades, we’ve seen them become an increasingly important part of the U.S. financial system. In 1997, there were fewer than 200 CDFIs nationwide. Now, there are more than 1,400, holding approximately $450 billion in assets.

The CDFI Fund has been a key part of this story. Since its establishment and across both Democratic and Republican administrations, it has provided more than $8 billion to CDFIs and mission-driven lenders and $81 billion in tax credits to community development entities. In 2023, it awarded more assistance than in any other year in its history. And one analysis finds that every dollar the CDFI Fund invests catalyzes at least eight more dollars in private sector investment.

Behind these numbers are significant impacts on the lives of Americans across the country. That’s been true for decades, but I’d like to focus today on what it has looked like under this Administration. Thanks to CDFI champions in Congress like Senator Warner, Senator Crapo, and Congresswoman Waters, we have seen the largest ever single investment in CDFIs, and also many other actions.

When we came into office almost four years ago, we were in the depths of the COVID-19 pandemic. Thousands of Americans were dying each day, and the unemployment rate was 50 percent higher than it is now. Households faced the threat of evictions or foreclosures. Small businesses struggled to pay their bills.

In response, our Administration acted decisively to get workers and businesses the support they needed and to help communities begin investing for the long-term. We worked through programs like the Rapid Response Program and the Emergency Capital Investment Program to deploy capital quickly and broadly and to reach low- and moderate-income communities. A CDFI in Arkansas reported having supported purchasing a building to house a new family health clinic in a county with particularly poor health outcomes. A minority depository institution in Florida reported providing loans to a manufacturer in Puerto Rico, which became its municipality’s largest employer. In Texas, a CDFI and MDI reported originating loans to consumers with no or limited credit history so they could avoid predatory lenders.

These efforts helped drive a recovery that was not only historically fast but was also historically inclusive. The record growth in new business applications included a surge in applications in Black and Hispanic communities. Black and Hispanic unemployment rates fell faster than in previous recessions and reached near historic lows. The gap between urban and rural unemployment rates narrowed significantly.

And CDFIs and the CDFI Fund did not just play a crucial role in the recovery. As we recovered, they also helped tackle longstanding challenges to help drive economic growth.

Last June, I announced that the CDFI Fund would provide an additional $100 million over the next three years to increase the supply of affordable housing. This $100 million will come from payments we’re receiving from Emergency Capital Investment Program investments, so it’s a creative way to make our dollars go further. And just last month, the CDFI Fund’s Capital Magnet Fund awarded nearly $250 million to 48 organizations for the development of affordable housing and community facilities. This will result in more than 26,000 affordable housing units. Also last month the CDFI Bond Guarantee Program made the largest issuance in its history. Funds will go toward owner-occupied homes in Mississippi and Alabama; rental housing in Minnesota; and commercial real estate in New Mexico, among many other uses.

And I’m very glad to share that today the CDFI Fund is awarding an additional $76 million in Technical Assistance awards to more than 250 organizations to help them build capacity to become certified CDFIs and carry out their crucial work. 

As we step back and reflect on today, it’s undeniable that the CDFI Fund has played a key role since its establishment in 1994 and continued to do so in our economic recovery and now in our medium- and long-term economic agenda. It’s also consistently benefitted from support from both parties, such as through the bipartisan Senate Community Development Finance Caucus, chaired by Senator Warner and Senator Crapo.

And CDFIs are recognized as a key tool to increase opportunity not only by many in both parties but also by the private sector. Over the last four years, many of America’s largest companies have together committed over $1 billion in cash deposits to CDFIs to increase their liquidity and ability to lend to underserved communities. Vice President Harris has been crucial in leading this work.

And there’s no question why there’s such widespread support: The CDFI Fund has helped revitalize and strengthen communities across this country, benefitting all of us.

President Clinton had the foresight to see this potential thirty years ago, with a powerful vision of driving economic revitalization and community development, including in rural communities across the country. And he had the determination to help set this all in motion. He began calling for the creation of the CDFI Fund as Governor of Arkansas and championed the legislation creating it shortly after becoming President. It passed with overwhelming bipartisan support. He said on that occasion: “We have got to find ways to reach into the isolated areas of America to bring the promise of America. Ultimately, that is what this whole idea of community development financial institutions are all about.”

Just over two years later, I was fortunate to join President Clinton’s White House as Chair of the Council of Economic Advisors and was honored to have the opportunity to help him advance this vision.

Now, thirty years later, I am proud that the Treasury Department is carrying forward that legacy and strengthening and expanding the CDFI Fund’s work. And I strongly believe the CDFI Fund must be equipped to continue this crucial work.

President Clinton, thank you for your foresight and determination. We are glad to have you join us at Treasury today to mark this anniversary and affirm the CDFI Fund’s tremendous importance for communities across America, now and in the years to come.

Let me now turn the floor over to President Clinton.

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WASHINGTON – Today, as part of the 30^th anniversary celebration of the Community Development Financial Institutions (CDFI) Fund, U.S. Secretary of the Treasury Janet L. Yellen is announcing $76 million in Technical Assistance (TA) awards for 256 CDFIs to build their capacity to provide financial products and services to low-income and underserved people and communities across America. The awards were made through the fiscal year (FY) 2024 funding round of the CDFI Program and Native American CDFI Assistance Program.

In making this announcement, Secretary Yellen will note, “For 30 years now, the CDFI Fund has helped revitalize and strengthen communities across this country, benefitting all of us.”

The CDFI Program and the NACA Program provide grants to build the operational capacity of CDFIs), including to provide training and education and to hire new staff to increase lending, empowering them to grow, achieve organizational sustainability, and contribute to the revitalization of low-income and distressed communities nationwide. CDFIs also commonly use TA Awards to analyze which products and services are appropriate for their target markets, develop lending policies and procedures, and build staff lending capacity. While both programs provide TA Awards through a competitive application review process, the NACA Program specifically awards funding to CDFIs that primarily serve Native American, Native Alaskan, and Native Hawaiian individuals and communities.

For FY 2024, 246 organizations headquartered in 42 states, the District of Colombia and Puerto Rico, received $72.60 million in CDFI Program TA Awards. As part of the NACA Program TA awards, 10 organizations received $3.72 million, headquartered in seven states and the District of Columbia. 

In September 2024, the CDFI Fund also provided Financial Assistance awards through the CDFI Program and NACA Program to further expand and support the financing activities of CDFIs. 

See the CDFI Program Award Book here.

See the NACA Program Award Book here.

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Treasury imposes sanctions on dozens of Russian banks, securities registrars, and finance officials; OFAC issues alert warning of risks of joining Russia’s System for Transfer of Financial Messages

WASHINGTON — Today, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) took another major step in implementing commitments made by G7 leaders to curtail Russia’s use of the international financial system to further its war against Ukraine. OFAC’s action includes the designation of Gazprombank, more than 50 internationally connected Russian banks, more than 40 Russian securities registrars, and 15 Russian finance officials. OFAC is also issuing an alert describing sanctions risks related to Russia’s System for Transfer of Financial Messages (SPFS), which the Kremlin created and uses to evade sanctions.

“Today’s sanctions targeting Russia’s largest remaining non-designated bank, as well as dozens of other financial institutions and officials in Russia, will further diminish and degrade Russia’s war machine. This sweeping action will make it harder for the Kremlin to evade U.S. sanctions and fund and equip its military,” said Secretary of the Treasury Janet L. Yellen. “We will continue to take decisive steps against any financial channels Russia uses to support its illegal and unprovoked war in Ukraine.”

GAZPROMBANK

OFAC is designating Gazprombank Joint Stock Company (Gazprombank) alongside its six foreign subsidiaries. Gazprombank is a conduit for Russia to purchase military materiel for its war effort against Ukraine. The Russian government also uses Gazprombank to pay its soldiers, including for combat bonuses, and to compensate the families of Russian soldiers killed fighting Putin’s brutal war against Ukraine. Australia, Canada, New Zealand, and the United Kingdom have previously sanctioned Gazprombank.

Luxembourg-based bank GPB International SA, Hong Kong-based GPB Financial Services Hong Kong Limited, Cyprus-based GPB Financial Services Limited and GPB-DI Holdings Limited, Switzerland-based Gazprombank (Switzerland) Ltd, and South Africa-based GPB Africa and Middle East Pty Ltd are wholly owned subsidiaries of Gazprombank. 

Gazprombank is being designated pursuant to Executive Order (E.O.) 14024 for operating or having operated in the financial services sector of the Russian Federation economy. GPB International SA, GPB Financial Services Hong Kong Limited, GPB Financial Services Limited, GPB-DI Holdings Limited, Gazprombank (Switzerland) Ltd, and GPB Africa and Middle East Pty Ltd are being designated pursuant to E.O. 14024 for being owned or controlled by, or for having acted or purported to act for or on behalf of, directly or indirectly, Gazprombank. All entities owned 50 percent or more, directly or indirectly, by Gazprombank or the six designated Gazprombank subsidiaries, are subject to blocking, even if not identified by OFAC.

Concurrently with this action, OFAC is issuing two new general licenses (GL) authorizing U.S. persons to wind down transactions involving Gazprombank, among other financial institutions, and to take the necessary steps to divest from debt or equity issued by Gazprombank. OFAC is also amending Russia-related GL 53 to ensure that diplomatic banking activities involving Gazprombank are not disrupted. OFAC continues to maintain a variety of authorizations, including GLs authorizing transactions related to agricultural commodities, medicine, medical devices, certain transactions in support of non-governmental organizations, the official business of third-country diplomatic missions located in the Russian Federation, and certain transactions and official business of certain international organizations and entities. 

SYSTEM FOR TRANSFER OF FINANCIAL MESSAGES 

OFAC is also issuing an alert underscoring the sanctions risk for foreign financial institutions that join Russia’s System for Transfer of Financial Messages (commonly known by its Russian acronym, SPFS, short for Sistema Peredachi Finansovykh Soobshcheniy). SPFS is part of the financial services sector of the Russian Federation economy because of its role facilitating communication between financial institutions engaged in Russia’s financial system. This means that any foreign financial institution that joins or has already joined SPFS may be designated for operating or having operated in the financial services sector of the Russian Federation economy pursuant to E.O. 14024. Russia has used and promoted SPFS, designed as an alternative to Society for Worldwide Interbank Financial Telecommunication (SWIFT) network, to maintain international financial connectivity, evade sanctions, and fund its war effort. OFAC views joining SPFS after publication of this alert as a red flag and is prepared to more aggressively target foreign financial institutions that take such action. OFAC also urges stakeholders to review their exposure to institutions that have joined SPFS, as such banks may be conduits for Russian sanctions evasion.

DOZENS OF RUSSIAN BANKS

Further curtailing Russia’s connections to the international financial system, OFAC is designating more than 50 small-to-medium Russian banks to prevent Russia from abusing the international financial system to pay for the technology and equipment it needs to sustain its illegal and unjust war against Ukraine. Foreign financial institutions that maintain correspondent relationships with these banks should be aware that continuing to do so entails significant sanctions risk.

For more information about these targets, please see Annex 1 below. 

RUSSIAN SECURITIES REGISTRARS

OFAC is aware that Russia has attempted to evade or avoid OFAC sanctions on the National Settlement Depository by requiring, via Presidential Decree 840, the transfer of certain securities to local Russian securities registrars. Today, OFAC is designating more than 40 such registrars.  OFAC has also updated FAQ 1197 to provide further guidance on securities held at or otherwise involving these registrars.

For more information about these targets, please see Annex 2 below.

CBR OFFICIALS 

In September 2022, OFAC designated Central Bank of the Russian Federation (CBR) Governor Elvira Naibullina and First Deputy Governor Olga Skorobogatova. At the time, Treasury noted that Russia’s financial technocrats have, directly and indirectly, supported the Kremlin’s unprovoked war against Ukraine. Today, OFAC is designating 11 additional CBR officials, including those involved in maintaining Russia’s international financial connectivity or promoting alternate financial pathways that Russia can exploit to pay for much-needed equipment and technology.

For more information about these targets, please see Annex 3 below. 

VTB SHANGHAI AND SBERBANK NEW DELHI STAFF

Today’s action also includes designations of key Russian staff members at U.S.-designated VTB Bank Public Joint Stock Company’s branch in Shanghai, China (VTB Shanghai) and U.S.-designated Public Joint Stock Company Sberbank of Russia’s branch in New Delhi, India (Sberbank New Delhi). 

The following Russian nationals are being designated pursuant to E.O. 14024 for operating or having operated in the financial services sector of the Russian Federation economy:

Andrei Anisimov is Sberbank New Delhi’s Deputy Managing Director. 

Elena Fedkina is a VTB Shanghai Relationship Manager. 

Ilya Lishenko is VTB Shanghai’s Senior Relationship Manager. 

Roman Logov is VTB Shanghai’s Deputy General Manager. 

Since February 2022, OFAC has designated dozens of Russia-based staff at Russian banks and continues to investigate Russian and third-country nationals working at foreign branches, representative offices, and subsidiaries of Russian banks for designation pursuant to E.O. 14024.

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ANNEX 1: DOZENS OF RUSSIAN BANKS

The following Russia-based financial institutions and individual are being designated pursuant to E.O. 14024 for operating or having operated in the financial services sector of the Russian Federation economy:

• Aktsionernoe Obshchestvo Bank Agroros is a bank headquartered in Saratov, Russia.
• Bank Iturup LLC is a bank headquartered in Yuzhno-Sakhalinsk, Russia. 
• BBR Bank Joint Stock Company is a bank headquartered in Moscow, Russia.
• BCS Bank AO is a bank headquartered in Moscow, Russia.
• Bratsky Narodny Bank JSC is a bank headquartered in Bratsk, Russia.
• Centrocredit Bank is a bank headquartered in Moscow, Russia. 
• Commercial Bank Energotransbank Joint Stock Company is a bank headquartered in Kaliningrad, Russia. 
• Commercial Bank Khlynov Joint Stock Company is a bank headquartered in Kirov, Russia. 
• Commercial Bank Kremlyovskiy is a bank headquartered in Moscow, Russia. 
• Commercial Joint Stock Bank Viking is a bank headquartered in Saint Petersburg, Russia.
• Corporate Finance Bank LLC is a bank headquartered in Moscow, Russia.
• Evrofinance Mosnarbank is a bank headquartered in Moscow, Russia. Evrofinance Mosnarbank was previously designated pursuant to E.O. 13850.
• Fora Bank Joint Stock Commercial Bank is a bank headquartered in Moscow, Russia.
• Garant Invest Bank Joint Stock is a bank headquartered in Moscow, Russia. 
• Interstate Bank is a bank headquartered in Moscow, Russia. 
• Joint Stock Commercial Bank National Reserve Bank Joint Stock Company (NRB)is a bank headquartered in Moscow, Russia. Daniel Haindl (Haindl) is the Senior Vice President of NRB. In his role at NRB, Haindl has been involved in a sanctions evasion scheme.
• Joint Stock Commercial Bank Slavia Joint Stock Company is a bank headquartered in Moscow, Russia.                                                                                              
• Joint Stock Commercial Mortgage Bank Akibank Public Joint Stock Company is a bank headquartered in Naberezhnye Chelny, Russia.
• Joint Stock Company Auto Finance Bank is a bank headquartered in Moscow, Russia.
• Joint Stock Company Bank Accept is a bank headquartered in Novosibirsk, Russia. 
• Joint Stock Company Bank Dom RF is a bank headquartered in Moscow, Russia. 
• Joint Stock Company Bank Finservice is a bank headquartered in Moscow, Russia.
• Joint Stock Company Bank United Capital is a bank headquartered in Saint Petersburg, Russia.
• Joint Stock Company Coalmetbank is a bank headquartered in Chelyabinsk, Russia.
• Joint Stock Company Commercial Bank Ural FD is a bank headquartered in Perm, Russia. 
• Joint Stock Company Guta Bank is a bank headquartered in Moscow, Russia.
• Joint Stock Company NS Bank is a bank headquartered in Moscow, Russia.
• Joint Stock Company Public Trust Bank is a bank headquartered in Moscow, Russia. 
• Joint Stock Company Royal Credit Bank is a bank headquartered in Vladivostok, Russia.
• Joint Stock Company Severgazbank is a bank headquartered in Vologda, Russia. 
• Joint Stock Investment Commercial Bank Eniseisk United Bank is a bank headquartered in Krasnoyarsk, Russia. 
• JSC Exi Bank is a bank headquartered in Saint Petersburg, Russia.
• JSCB Energobank is a bank headquartered in Kazan, Russia.
• Kamsky Commercial Bank is a bank headquartered in Naberezhnye Chelny, Russia.
• Limited Liability Company Bank Orange is a bank headquartered in Saint Petersburg, Russia.
• Limited Liability Company Bank Round is a bank headquartered in Moscow, Russia.
• Limited Liability Company Krona Bank is a bank headquartered in Irkutsk, Russia.
• MB Bank is a bank headquartered in Moscow, Russia.MB Bank, also known as Mir Business Bank, is the Russia-based wholly-owned subsidiary of Iran’s Bank Melli Iran. MB Bank was previously designated previously designated pursuant to E.O. 13224 and E.O. 13582.
• National Standard Bank Joint Stock Company is a bank headquartered in Moscow, Russia.
• New Moscow Bank is a bank headquartered in Moscow, Russia. 
• NK Bank Joint Stock Company is a bank headquartered in Moscow, Russia.
• Primorsky Territorial Commercial Bank Society with Limited Liability is a bank headquartered in Vladivostok, Russia. 
• Public Joint Stock Commercial Bank Derzhava is a bank headquartered in Moscow, Russia. 
• Public Joint Stock Company Bank Alexandrovsky is a bank headquartered in Saint Petersburg, Russia. 
• Public Joint Stock Company Bank Sinara is a bank headquartered in Yekaterinburg, Russia.
• Public Joint Stock Company Finstar Bank is a bank headquartered in Saint Petersburg, Russia. 
• Public Joint Stock Company Metkombank is a bank headquartered in Kamensk-Uralskiy, Russia.
• Public Joint Stock Company National Bank Trust is a bank headquartered in Moscow, Russia. 
• Public Joint Stock Social Commercial Bank of Primorye Primsotsbank is a bank headquartered in Vladivostok, Russia. 
• Rossita Bank is a bank headquartered in Moscow, Russia.
• Russian Public Joint Stock Commercial Roads Bank is a bank headquartered in Moscow, Russia. 
• Russian Universal Bank is a bank located in Moscow, Russia.
• Vitabank PJSC is a bank headquartered in Podolsk, Russia. 
• Waybank JSC is a bank headquartered in Moscow, Russia.

ANNEX 2: RUSSIAN SECURITIES REGISTRARS

The following Russia-based financial institutions function as registrars and are being designated pursuant to E.O. 14024 for operating or having operated in the financial services sector of the Russian Federation economy:

• Aktsionernoe Obshchestvo Agentstvo Regionalnyi Nezavisimyi Registrator is a registrar based in Tula, Russia, and Lipetsk, Russia.
• Aktsionernoe Obshchestvo Mezhregionalnyi Registratorskii Tsentr is a registrar based in Moscow, Russia.
• Aktsionernoe Obshchestvo Natsionalnaya Spetsializirovannaya Finansovaya Kompaniya is a registrar based in Novosibirsk, Russia.
• Aktsionernoe Obshchestvo Nezavisimaya Registratorskaya Kompaniya R.O.S.T. is a registrar based in Moscow, Russia.
• Aktsionernoe Obshchestvo Professionalnyi Registratsionnyi Tsentr is a registrar based in Moscow, Russia.
• Aktsionernoe Obshchestvo Registrator Kapital is a registrar based in Yekaterinburg, Russia.
• Aktsionernoe Obshchestvo Spetsializirovannyi Registrator Kompas is a registrar based in Novokuznetsk, Russia.
• Aktsionernoe Obshchestvo Surgutinvestneft is a registrar based in Surgut, Russia.
• Aktsionernoe Obshchestvo Vedenie Reestrov Kompanii is a registrar based in Yekaterinburg, Russia.
• Aktsionernoe Obshchestvo Independent Specialized Depository is a registrar based in Moscow, Russia.
• AO Reestr is a registrar based in Moscow, Russia.
• Aktsionernoe Obshchestvo Registratsionnaya Kompaniya Tsentr Invest is a registrar based in Irkutsk, Russia, and Moscow, Russia.
• Aktsionernoe Obshchestvo Depozitarnaya Kompaniya Region is a registrar based in Moscow, Russia.
• Evroaziatskii Registrator is a registrar based in Kazan, Russia.
• AO Spetsializirovannyi Depozitarii Infinitum is a registrar based in Moscow, Russia.
• Joint Stock Company Aktiv is a registrar based in Saint Petersburg, Russia.
• Joint Stock Company Industria Reestr is a registrar based in Moscow, Russia.
• Joint Stock Company RDC Paritet is a registrar based in Moscow, Russia.
• Joint Stock Company Registrator Intraco is a registrar based in Perm, Russia.
• Joint Stock Company Registry Society Status is a registrar based in Moscow, Russia.
• JSC DRAGA is a registrar based in Moscow, Russia, and Saint Petersburg, Russia.
• JSC Republican Specialregistrar Yakut Fund Center is a registrar based in Yakutsk, Russia.
• JSC RT Registrar is a registrar based in Moscow, Russia.
• JSC Service Reestr is a registrar based in Moscow, Russia.
• JSC Noviy Registrator is a registrar based in Moscow, Russia.
• Korporativnaya Registratorskaya Kompaniya is a registrar based in Moscow, Russia.
• Limited Liability Company Depositary and Corporate Technologies is a registrar based in Moscow, Russia.
• Limited Liability Company Special Depository Partner is a registrar based in Moscow, Russia.
• Limited Liability Company Specialized Depository Company Garant is a registrar based in Moscow, Russia.
• Moskovskii Fondovyi Tsentr is a registrar based in Moscow, Russia.
• National Custodial Company Stock Closed Corporation is a registrar based in Moscow, Russia.
• Obshchestvo S Ogranichennoy Otvetsvennostyu Oboronregistr is a registrar based in Moscow, Russia.
• OOO Partner is a registrar based in Cherepovets, Russia.
• OOO Reestr RN is a registrar based in Moscow, Russia.
• OOO Registrator Garant is a registrar based in Moscow, Russia.
• Registrator KRTS is a registrar based in Krasnodar, Russia.
• Spetsializirovannyi Depozitarii Depo Plaza is a registrar based in Moscow, Russia.
• Spetsializirovannyi Registrator Rekom is a registrar based in Staryy Oskol, Russia.
• Tsentr Ucheta i Registratsii is a registrar based in Saint Petersburg, Russia.
• Yuzhno Regionalnyi Registrator is a registrar based in Rostov-na-Donu, Russia.
• Zakrytoe Aktsionernoe Obshchestvo Pervyi Spetsializirovannyi Depozitarii is a registrar based in Moscow, Russia.

ANNEX 3: CBR OFFICIALS

The following Russian nationals are officials at the Central Bank of the Russian Federation (CBR), which is subject to Directives 1 and 4 of E.O. 14024, and are being designated pursuant to E.O. 14024 for operating or having operated in the financial services sector of the Russian Federation economy:

• Alla Bakina (Bakina) is the Director of the National Payment System Department of the CBR and is responsible for modernizing CBR payment systems. Bakina is involved in expanding the reach of Russia’s System for Transfer of Financial Messages (SPFS) and Faster Payments System (SBP). 
• Vladimir Chistyukhin has been a First Deputy Governor of the CBR since 2022 and a Member of the Board of Directors of the CBR since 2023.
• Elizaveta Danilova is Director of the Financial Stability Department at the CBR and has been a Member of the Board of Directors of the CBR since 2023.
• Gulnara Khaidarshina is the Director of the Department for Cooperation with International Organizations at the CBR.
• Mikhail Anatolyevich Kovrigin is the Director of the International Settlements Department at the CBR.
• Ekaterina Lozgacheva has been the Director of the Financial Market Strategy Department of the CBR since 2023 and previously served in other positions at the CBR dating back to 2011.
• Alexandr Morozov has been the Director of the Research and Forecasting Department at the CBR since 2015.
• Olga Vasilyevna Polyakova has been a Deputy Governor of the CBR since 2016 and a Member of the Board of Directors of the CBR since 2021.
• Kirill Pronin (Pronin) is the Director of the Financial Market Infrastructure at the CBR. Pronin was previously Director of the CBR’s Department of Financial Technologies.
• Bogdan Shablya is head of the CBR’s Financial Monitoring and Currency Control Department and has worked at the CBR for more than 25 years.
• Dmitry Tulin is a First Deputy Governor of the CBR and has been a Member of the Board of Directors of the CBR since 2020.

SANCTIONS IMPLICATIONS

As a result of today’s action, all property and interests in property of the persons above that are in the United States or in the possession or control of U.S. persons are blocked and must be reported to OFAC. In addition, any entities that are owned, directly or indirectly, 50 percent or more by one or more blocked persons are also blocked. All transactions by U.S. persons or within (or transiting) the United States that involve any property or interests in property of designated or blocked persons are prohibited unless authorized by a general or specific license issued by OFAC, or exempt. These prohibitions include the making of any contribution or provision of funds, goods, or services by, to, or for the benefit of any blocked person and the receipt of any contribution or provision of funds, goods, or services from any such person. Non-U.S. persons are also prohibited from causing or conspiring to cause U.S. persons to wittingly or unwittingly violate U.S. sanctions, as well as from engaging in conduct that evades U.S. sanctions. OFAC’s Economic Sanctions Enforcement Guidelines provide more information regarding OFAC’s enforcement of U.S. sanctions, including the factors that OFAC generally considers when determining an appropriate response to an apparent violation. 

In addition, foreign financial institutions that conduct or facilitate significant transactions or provide any service involving Russia’s military-industrial base run the risk of being sanctioned by OFAC. For additional guidance, please see the updated OFAC advisory, “Updated Guidance for Foreign Financial Institutions on OFAC Sanctions Authorities Targeting Support to Russia’s Military-Industrial Base,” as well as OFAC Frequently Asked Questions (FAQs) 1146-1157.

The power and integrity of OFAC sanctions derive not only from OFAC’s ability to designate and add persons to the SDN List, but also from its willingness to remove persons from the SDN List consistent with the law. The ultimate goal of sanctions is not to punish, but to bring about a positive change in behavior. For information concerning the process for seeking removal from an OFAC list, including the SDN List, please refer to OFAC’s Frequently Asked Question 897 here. For detailed information on the process to submit a request for removal from an OFAC sanctions list, please click here.

Any persons included on the SDN List pursuant to E.O. 14024 may be subject to additional export restrictions administered by the Department of Commerce, Bureau of Industry and Security (BIS).

For identifying information on the individuals and entities sanctioned today, click here. 

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As Prepared for Delivery 

Thank you very much for the opportunity to be here today, and a particular thank you to our hosts, John Williams, Fabiola Ravazzolo, and their team at the Federal Reserve Bank of New York. This conference is a timely and welcome addition to the range of engagements the New York Fed hosts. Foreign exchange markets are critical to so much economic activity, from hedging to trade financing, and they are evolving rapidly. We have come a long way from the days when spot markets were dominant, and the New York Fed has been a positive force at every step along the way. 

Let me state at the outset that these are unusual circumstances in which to be giving a policy speech. I serve as Treasury’s Assistant Secretary for International Finance and was nominated for this role by President Biden. Given the results of the U.S. presidential election, I’ll be ending my service in just a couple of months’ time. But the U.S. cross-border payments agenda is an area where there is significant and broad-based agreement across the public and private sectors, and across both political parties. We need a modern system of payments, guided by strong U.S. international financial leadership. As such, the U.S. cross-border payments agenda has many elements where actions across administrations can build towards shared goals. 

One of these shared goals is to improve the efficiency and safety of the infrastructure that underlies international commerce. Another is to maintain and strengthen the conditions that lead to the important global roles of the U.S. financial sector and the U.S. dollar, with the resulting benefits these bring for governance, our national security, financial stability, and the global economy. We all also aim to have high standards with respect to privacy and the enforcement of anti-money laundering and countering the financing of terrorism (AML/CFT) requirements. 

We are pursuing these goals across three lines of effort. First, we are directly encouraging and participating in responsible payments innovation and experimentation. Second, we are coordinating with the private sector and foreign partners to better align legal, regulatory, and supervisory frameworks, which are the foundations of a more efficient and effective payments system. And third, we are supporting strong international standards and high-quality compliance regimes, which ensure the stability of payments and of the broader financial system.  I believe the United States must lead when it comes to cross-border payments to maximize the chances that any new systems with significant international usage reach the quality and standards we prefer when it comes to governance and support for financial stability. My comments today will review these efforts in turn, relate them to the role of the dollar, highlight some areas where we need to be cautious, and suggest some next steps for moving forward.

THE PROBLEM OF CROSS-BORDER PAYMENTS

Cross-border payments are essential to global business and finance. But in my experience as a policymaker, there is a widely held complaint that cross-border payments are slow, costly, unreliable, or unsafe. I have heard this from large multinational corporations and representatives of small business, in advanced economies, emerging markets, and low-income countries alike.

Wholesale payments are typically the fastest and least expensive mode of payment, and over 90% of wholesale payments utilizing the SWIFT system typically reach the beneficiary bank within an hour.  However, customers experience a high degree of variation across regions.  In Africa, more than 20 percent of even wholesale payments take more than a day to reach the account of the end customer. In Asia-Pacific and the Middle East, this figure is greater than 10 percent.[1] At the retail level, too, cross-border transfers remain slow and costly. The average cost of a $200 remittance in 2024 was 6.4 percent, including roughly 2 percent for foreign exchange conversion and roughly 4 percent for service fees. In many parts of the world, 40% of remittances take more than one day to reach the beneficiary.^[2]

Some of this cost and delay is deliberately built into the system as a feature, not a bug. For example, some is due to batching and delayed settlement in legacy payment arrangements, which may help mitigate credit, legal, and liquidity risk. And, separately, some delay may result from faithful compliance with AML/CFT requirements, which is of course critically important. 
But there’s clearly room to make cross-border payments faster, cheaper, more accessible, and more transparent, without exacerbating risk or neglecting compliance. And doing so would bring great benefits. It would improve the functioning and competitiveness of a broader set of trade corridors and, with key partner countries, reinforce diversification efforts like the “friendshoring” Secretary Yellen has prescribed. It would reduce barriers for retail transfers like remittances and cross-border payments to small businesses, enabling new business models and fostering entrepreneurship. And making the dollar-oriented system faster and more efficient would strengthen our hand in upholding U.S. values like privacy and in bolstering both our national security and that of our allies. 

PARTICIPATION IN RESPONSIBLE PAYMENTS INNOVATION AND EXPERIMENTATION

Let me start with our efforts to foster responsible innovation and experimentation in payments technology.  The landscape is evolving, in part, from the integration of well-known tools, like application programming interfaces (APIs) and quick response (QR) codes, into existing payments infrastructure. Some innovations build on more recent technologies, like distributed ledgers, that could bring fundamental change to payment, clearing, and settlement. 

Around the world, public authorities and private firms have started applying this range of innovations to their domestic payment systems. As of March 2024, 89 percent of Brazil’s population had initiated a payment through its Pix real-time payment system. Pix is free to individuals for most payments, and according to IMF data, the cost to merchants accepting a Pix payment is 85 percent less than accepting a credit card.^[3] Similarly, India’s Unified Payment Interface (UPI) is credited by the World Economic Forum with reducing payment fees to Indian consumers by more than $67 billion since its inception in 2016.^[4]In the United States, the private and public sectors have developed new solutions for domestic instant payments, some of which gave rise to new products that are able to reach households less likely to otherwise participate in the financial sector.^[5] 

U.S. policy seeks to maximize the chances that these kinds of technological innovations can also increase the safety and efficiency of cross-border payments. 

As one example, the United States is directly leading, participating in, or observing various experiments or new offerings of domestic and cross-border payment solutions. In 2023, following several years of exploration, the Federal Reserve launched FedNow, an instant payment infrastructure that allows businesses and individuals to send and receive domestic payments in real time through participating depository institutions. The Fed has also proposed extending operating hours for its other payment services, the Fedwire Funds Service and National Settlement Service. Together, and in combination with private-sector efforts like The Clearing House’s RTP Network among others, these developments bring the benefits of near round-the-clock payments and improved liquidity management for domestic payments.

Further, the Fed is contributing to international projects to improve cross-border payments. Together with six other central banks and over forty private sector firms, including several U.S. firms, the Fed is participating in Project Agorá, an initiative of the Bank for International Settlements to explore the integration of tokenized central bank and commercial bank money on the same platform. Last year, with the Monetary Authority of Singapore, the Fed concluded Project Cedar x Ubin+, an exploration of improvements to multi-currency wholesale cross-border payments on a bilateral and technology-neutral basis.

Finally, the Treasury and other agencies are exploring the possibility of enhancing bilateral payment system connectivity with select other jurisdictions. This might be achieved in multiple ways, including interconnecting fast payment systems or supporting the participation of foreign banks in domestic payment platforms. Improving connectivity in these ways requires the United States and its partners to develop a better understanding of each other’s payments technology and protocols, to formulate and agree on a governance system, and to take care to ensure that payments integrity programs and AML/CFT compliance controls in the partner countries meet international standards. 

Improvements in bilateral connectivity may not only offer economic benefits for American consumers and businesses, they may also offer the promise of greater adherence to global standards and shared national security gains. Enhancing connectivity with the U.S. system may offer significant commercial benefit for our partners, and that presents an opportunity for the United States to invite a deeper and more transparent commitment to shared policy goals, like combatting illicit finance.

Of course, even though I have only highlighted public sector activity so far, the United States government recognizes that the private sector has an essential role to play in improving cross-border payments. Regulated U.S. financial institutions are at the forefront of exploring global, “always on” real-time payments, clearing, and settlement, using a variety of technologies, and we wish to create a climate that ensures these institutions can remain at the frontier. Relatedly, we believe that policymakers should preserve optionality as to what form innovation takes. Governments should avoid picking winners and losers in payments technology.

Now, I should note, not all payments system experimentation is as responsible, cautious, and transparent as the efforts I just described. This is no small matter. If a poorly designed payments system were widely adopted, it would not only fail to resolve cross-border payments challenges, it could do significant harm to international financial stability and economic security. Policymakers and industry participants should take that risk seriously and be very skeptical of any project that seeks to wipe the slate clean, or avoid safeguards in the current system, or omit, elide, or avoid strong and transparent governance and oversight. One reason the United States must continue to lead on innovation and governance for cross-border payments is precisely to avoid the proliferation of opaque systems that may introduce unacceptable macro-financial, illicit finance, and operational risks into the global financial system.

IMPROVING LEGAL, REGULATORY, AND SUPERVISORY FRAMEWORKS

Next, I would like to share how the United States is engaging to improve legal, regulatory, and supervisory frameworks in support of responsible innovation, reduced frictions in payments, and greater competition and transparency. 

Internationally, one line of U.S. effort since 2020 has been to provide intensive support for the G20’s Roadmap to Enhance Cross-border Payments. As part of this Roadmap, Treasury has been encouraging legal and regulatory changes in foreign jurisdictions, including so that more financial data, not less, can move freely across borders. Localization and other restrictions on cross-border data sharing, if implemented beyond narrow national security considerations, can restrict firms from working with the best data or compliance service providers, if those providers happen to be in a foreign country. That harms U.S. business. And, such restrictions can also become major obstacles to the highest quality risk management and most efficient cross-border payment technologies. 

Domestically, Treasury and the Financial Stability Oversight Council have repeatedly recommended that Congress develop a clear regulatory framework for stablecoins, a technology often described as showing promise in facilitating cross-border transactions.^[6],^[7] But stablecoins are structurally vulnerable to runs, which can pose risks to consumers and investors, and to financial stability. Analogous to how, in pegged currency regimes, foreign reserves back the value of the exchange rate, most stablecoin issuers require dollar-denominated liquid assets to peg their stablecoin to the dollar. Doubts about the quality of those backing reserves, or about the redeemability of the stablecoin at par, can lead to runs on the issuer. This is not theoretical. In the last three years, we’ve seen prominent stablecoins break their peg during periods of market stress. And in 2022, we saw the complete collapse of the Terra/Luna arrangement, which had a totally inadequate mechanism for trying to stabilize the value of its token. 

Last year, the Financial Stability Board published high-level recommendations for the oversight, supervision, and regulation of broadly adopted stablecoins, consistent with the key features we have advocated in a U.S. stablecoins framework.^[8] Treasury has also advocated for common-sense reforms of its tools and authorities to address the increasing use of stablecoins by a variety of illicit actors, including to evade sanctions.

Finally, Treasury has also called, as Under Secretary Liang did in a speech last month, for a federal payments framework.^[9]The current framework for the regulation of non-bank and e-money payment service providers has requirements that vary from state to state. This raises risks for the integrity of payment systems and public trust in money. It also raises barriers to entry, limiting competition and innovation. A federal payments framework would help maintain the global leadership of U.S. financial firms. 

SUPPORTING STRONG INTERNATIONAL STANDARDS AND COMPLIANCE

Finally, we must navigate these technological innovations, and changing laws and regulations, without abandoning our commitment to strong international standards and compliance regimes. Standards and compliance regimes limit economic risk and help protect citizens around the world from fraud and other illicit finance threats.

I’ve used the phrase “standards” several times now. But in plain English, what do I mean? Standards can specify requirements for how payments technology must work, including elements related to the underlying programming code and messaging used to send and process payment requests. Standards can set the rules to determine who is allowed to participate in a payments system and when, and what users must do to manage risk and to make sure payments can continue to flow in the face of certain threats or disruptions. Operational standards might describe who has responsibility for oversight of various parts of the system and what pieces of information must be transparent and disclosed. Standards can define precisely what it means for a payment to be settled. 

Domestically, high quality, clear standards promote a safe and level playing field for firms, and invite stakeholder trust in their critical infrastructure. Internationally, standards can facilitate the spread of best practices and interoperability among systems—making it possible for the system in one country to “speak” to the system in another, both technically and legally.

One example of these standards is the Principles for Financial Market Infrastructures (PFMI), which provide guidance for managing the credit, collateral, and liquidity risks of payment system participants, as well as consideration of the operational risks than arise when system upgrades are rolled out.  Another example is Financial Action Task Force (FATF) standards, which specify steps that countries should implement in order to combat money laundering, terrorist financing, and proliferation financing. They are critical in our efforts to prevent or trace financial activity involving fraudsters, drug traffickers, terrorists, and other bad actors. Currently, the United States is actively involved in the revision of FATF Recommendation 16 on payment transparency to reflect evolutions in the payments landscape over the last two decades and ensure the standard remains technologically neutral. A final example is the standards Committee on Payments and Market Infrastructures (CPMI), which recently published a harmonized international Organization for Standardization (ISO) 20022 messaging standard to reduce complications in cross-border payments created when different countries use different messaging formats.

These payment system standards are typically technology neutral. They apply just as well to new systems as they do to old ones. As we enter a period when legacy and innovative payment solutions coexist, standards will facilitate interoperability, not only across jurisdictions but also between diverse technologies. And accordingly, we will continue to encourage the application of these existing standards to new systems. 

But we have to remain vigilant. Innovation can often give rise to new, implicit standards, long before the appropriate standard-setting organizations have reacted or caught up to the new technology. Therefore, the United States is and should continue to be an active and vocal participant in international standard-setting processes, ensuring that the responsible institutions keep pace with change. Public authorities, including Treasury and the Federal Reserve, represent the United States in groups like the FATF and CPMI.  But we also rely on private sector firms to develop and advance standards, including those that apply internationally. For example, the American National Standards Institute, which is the U.S. member of the ISO, convenes experts across the private and public sectors, including Treasury, as well as academia. These and similar bodies are setting standards for critical and emerging technologies, and U.S. engagement is essential.

Treasury also supports the good work of the IMF and World Bank to provide payment system technical assistance and capacity development. This work helps embed and put into practice high quality technical, legal, and regulatory standards around the world. In the process, it helps deliver real benefits for the functioning of many domestic and cross-border payment systems in emerging market and developing economies.

Conversely, we should be wary of innovations that fail to meet international standards for safety, and soundness. For example, the United States has pressed international organizations to end any involvement with payment initiatives that are specifically designed to undermine or skirt global AML/CFT rules, sanctions, and other illicit finance controls. And we will discourage participation in payment systems that are not subject to high-quality international standards and supervision.  

POSITIVE EXTERNALITIES, CURRENCY CHOICE, AND THE INTERNATIONAL ROLE OF THE DOLLAR

How does all of this relate to the role of the U.S. dollar? The fact that the dollar’s global usage far exceeds the U.S. share of global economic and financial activity reflects features that are mostly unrelated to payments. It more likely stems from the fact that the dollar is supported by a transparent and reliable legal system, an independent central bank, and a government committed to sound macroeconomic policies and a freely floating currency. Dollar dominance is also likely buoyed by the global importance of U.S. capital markets, which support open, deep, and liquid trades in dollar-denominated securities.^[10]

That said, we do not – and must not – take for granted the benefits of the dollar system.  And we should be appropriately humble with respect to our understanding of the demand for dollar use. After all, the fall of the pound and rise of the dollar roughly 100 years ago stands among the few observed shifts from one globally dominant currency to another. That’s not a lot of data points to use to test hypotheses.

So, while there is little evidence from recent history that payments technology is a driver of currency choice, we must still at least entertain the possibility that new, high-quality, and safe payments infrastructures that are based on, or compatible with, the U.S. dollar, would bolster the dollar’s important international role. 

To be clear, the United States has not sought to compel anyone to use the dollar in cross-border or foreign transactions. Rather, we believe that emerging cross-border payment arrangements should preserve currency choice, including the ability to use a vehicle currency in foreign exchange transactions. All else equal, this will help reduce the overall cost of cross-currency payments. And if we succeed in keeping the U.S. public and private sectors central to payments innovations, operating within a well-designed domestic and global legal and regulatory environment, and upholding high-quality global standards and compliance regimes, the continued dominant use of the dollar strikes me as both the likely outcome and one that is in the interests of Americans as well as our allies and partners around the world. 

To achieve that vision, the United States is seeking to advance payment rails innovation, implement sound regulatory frameworks internationally and at home, and promote international standards that improve safety and address illicit finance risks. We should step up our commitment to explore the potential benefits of tokenization solutions, pass strong and responsible domestic stablecoin legislation, and press international organizations to avoid supporting any payments innovations that could undermine existing, high-quality standards. And all together, these efforts can help maintain the continued primacy of the dollar and support the strength of the U.S. financial system, to the benefit of Americans and the world. 

The steps I’ve outlined above speak to core U.S. values and the need for sustained U.S. public and private sector engagement. The payments landscape is evolving in ways that have far reaching implications, from natural security to economic prosperity. The future of the financial system, global markets, and the U.S. and global economies demands our continued leadership. 

Thank you. 

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As Prepared for Delivery 

Good afternoon.  I’d like to start by thanking our panelists today for sharing their perspectives and engaging in an important and insightful discussion.  On the U.S. Government side, each of you is a close partner, and I appreciate the tremendous effort you put into carrying out our national security mission.  I also see many members of the CFIUS bar, the business community, as well as compliance professionals.  Thank you for your collaboration in the CFIUS process as well – you have an important role to play in supporting our work.  

At this conference last year, I spoke about the Committee’s compliance and enforcement work as well as our enhancements to transaction reviews and efficiencies; we also discussed mitigation agreement monitoring, third-party processes, non-notified transactions, and planned regulatory updates.  Today, I want to highlight the progress made in furtherance of those priorities, and some of the work that lies ahead.  

In addition to handling hundreds of cases and ongoing monitoring responsibilities, we have made important regulatory updates, as previewed last year.  We have also redoubled our efforts on enforcement, now levying eight civil monetary penalties in the past two years, four times more in that period than in the Committee’s history.  

In addition, fulfilling our mandate in the Foreign Investment Risk Review Modernization Act of 2018, or FIRRMA, to regularly consult and meet with allies and partners, we have also been active across the globe in sharing best practices regarding robust investment screening, the importance of timely reviews, and how to promote open investment consistent with the protection of national security.  We certainly can and must do both. 

Our work and the status of the United States as the world’s top destination for foreign direct investment highlights that this balance is possible.  In the past two years alone, CFIUS has cleared hundreds of transactions with a collective value of nearly $500 billion.  

Our national security work requires depth, breadth, and resources. Over the past year, we have continued to strengthen our analytical and operational capabilities.  We have done this by building and implementing sophisticated tools, platforms, and methodologies for assessing and addressing national security risks. We employ cutting-edge information technology platforms to securely manage and facilitate novel aspects of CFIUS’s work.  We have expanded and deepened our human capital and today have a team with widely diverse backgrounds, from lawyers to science Ph.D.s to intelligence professionals to bankers to compliance professionals and former prosecutors. And across the Committee, we benefit from a much broader team with incredible subject matter expertise.  

I want to take a moment to recognize the hard work of the career public servants who carry out the work of CFIUS.  In addition to Treasury’s role as chair of CFIUS, there are eight other agency political appointees who lead this work across the Committee, but there are hundreds of career staff who do the hard work and in-depth analysis that underpins each transaction we review.  Working with this group of dedicated national security professionals has been an honor, and our national security is stronger as a result of their contributions.

The work of our outstanding team, in conjunction with our ongoing technological improvements, have enabled us to be more efficient and effective as we contend with two core challenges.  First, transactions are increasingly complex.  And second, the global security landscape is constantly changing, and CFIUS is identifying and addressing more national security risks than in years past as a result, including as it relates to sensitive data and technologies.  

We have also been paying particular attention to the role of limited partners in investment funds.  The reality is that not all LP arrangements are the same and it is often important for the Committee to understand the identity and role of LPs when relevant to understanding a transaction and assessing whether it poses national security risk.  We recognize that sometimes a fund sponsor, for example, may have a contractual commitment to keep confidential the identity of an LP, and to that end, I can reassure you that we have processes and procedures in place to ensure that information filed with the Committee is handled appropriately.  Indeed, the Committee strictly adheres to its statutory confidentiality obligations.  And we’ve done a lot of thinking around the issue of LP investments, benefitting from, among other things, the work of the Department of Commerce in this area.  In the same way that financial institutions are obligated to “know your customer,” I often tell businesses seeking funding they should know their investor – because CFIUS certainly will.  LP agreements, side letters, and other informal arrangements can all be potential vectors for national security risk.  

On that note, I want to take a moment to recognize our colleagues in the Intelligence Community.  The Committee is a voracious consumer of the IC’s work, which gives Committee members critical information and analysis to fully understand the potential “threat” for each and every transaction that comes before CFIUS.  This is a fundamental input to our work.  

I mentioned efficiency as an important part of our work – and we take that seriously.  We are working through cases faster than in years before.  In 2023, CFIUS cleared 66 percent of distinct transactions without mitigation measures in either the 30-day assessment period for a declaration or the initial 45-day review period for a notice – compared to 58 percent in 2022. In 2024, preliminary data shows this clearance rate continuing to climb ever further.  

CFIUS also improved its efficiency by decreasing the frequency of withdrawn and refiled transactions from 23 percent of notices in 2022 to 18 percent of notices in 2023.  This is the first such reduction in five years, and a trend we see continuing into 2024. These changes are not incidental; instead, they reflect the focus we’ve placed on improving efficiency at every step in our process and the dedicated work of Committee staff.

We have also transformed how we approach compliance with mitigation agreements.  Today, we are actively monitoring mitigation measures in approximately 240 cases.  We have expanded and devoted significant resources to monitoring, nearly doubling the size of Treasury’s team over the last several years, including hiring professionals with audit and other relevant compliance experience.  

In 2023, Treasury and other agencies went on over forty site visits, both domestically and internationally, to monitored businesses. In addition to the Committee’s monitoring role, the use of third parties and internal compliance professionals is a critical piece of ensuring the protection of national security – from third party monitors and auditors to trustees to security officers and security directors, all of whom play an integral role in working with mitigated companies and the Committee to protect national security.

We also remain vigilant in our enforcement of mitigation agreements, and as I mentioned earlier we’ve made tremendous advancement in this space. 

In an effort to increase transparency with regard to enforcement actions, in August, we debuted an updated enforcement website that provides further information regarding how the Committee approaches compliance and enforcement.  This includes new information regarding the penalties CFIUS has levied in the past few years, including the $60 million penalty imposed for a company’s failure to take appropriate measures to prevent unauthorized access to certain sensitive data and failure to promptly report unauthorized access.  I can also share that, in the last year, CFIUS has – for the first time – utilized its subpoena authority in support of its national security mission.  

As many of you know firsthand, we have continued to improve our ability to identify transactions that may pose a risk to national security and were not notified to the Committee by the parties.  The Committee leverages multiple tools and data sources – including public reporting, subscription services, tips from the public, Committee members or Congress, and classified reporting – to identify and analyze such non-notified transactions.  Treasury’s non-notified team screens thousands of transactions, ultimately putting forward those that may raise national security considerations to the Committee for consideration to request a filing.  The President’s order in May of this year prohibiting the purchase and requiring the divestment of certain real estate operated as a cryptocurrency mining by facility by MineOne initially came to the Committee’s attention through our non-notified process after we received a tip from the public. 

The MineOne case also showcases the importance of our jurisdiction over real estate transactions.  CFIUS reviewed and investigated this transaction pursuant to authorities provided by Congress in FIRRMA to cover real estate transactions in close proximity to certain sensitive U.S. facilities.  We have been focused on updates to our real estate jurisdiction, working closely with the Department of Defense.  Last year, we added eight military installations to our real estate regulations and earlier this month, we issued a final rule that expands CFIUS’s ability to review certain real estate transactions by foreign persons near more than 60 military bases and installations across 30 states. This is the result of a recent comprehensive assessment conducted by the Department of Defense regarding its military installations.  

And just yesterday, we issued a final rule to sharpen our investigation and enforcement tools.  Among other things, this rule expands our authority to request and subpoena information for non-notified transactions, increases the maximum monetary penalty available for certain violations, and expands the instances in which CFIUS may use its subpoena authority, including in the non-notified context.  After taking into consideration the public comments we received on the proposed rule, the final rule allows the CFIUS Staff Chairperson to impose a deadline with respect to party responses to mitigation agreement drafts not as a default, but where appropriate.  We see this as a necessary tool in certain instances.  These enhancements are drawn from lessons learned as we have increased our focus on compliance, monitoring, and enforcement over the last few years.  

We also remain engaged with Congress as one of our key stakeholders. In July, I again testified before the Senate Banking Committee regarding the work of the Committee.  We regularly engage with congressional staff and members regarding potential legislation, and pursuant to our statute, from time-to-time provide case briefings on covered transactions after concluding action. 

Our protection of national security does not stop at the border; indeed, our national security is linked to the security of our allies and partners.  Therefore, it is essential to U.S. national security that our allies and partners develop and maintain effective national security-focused investment screening processes.  This has been an important part of our work and in 2023 and 2024 alone, alongside the State Department, we have had hundreds of engagements with our foreign allies and partners, including an investment screening Memorandum of Intent that Treasury Secretary Yellen signed last year with her counterpart in Mexico. Over the past few years, the work we have done has contributed to the proposal, creation, or enhancement of investment screening programs in over 30 countries.  

I am proud of Treasury and the Committee’s efforts in all of these areas, but I also recognize that there is more work to do.  While some of us will be departing our roles during this transition period, the incredible career staff will carry on with the same high caliber of professionalism and competence that you all have come to expect. In doing so, I fully anticipate that the Committee will remain focused on promoting and enforcing compliance with our regulations and agreements, improving our efficiency, and honing our authorities to ensure the protection of national security, all the while creating a welcoming environment for foreign investment.  
 

Thank you again for joining us today.

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Final rules will improve access to direct pay for co-owned clean energy projects, helping to expand the buildout of the clean energy economy.

WASHINGTON – Today, the U.S. Department of the Treasury and the IRS released final regulations that will expand the reach of the Biden-Harris Administration’s Inflation Reduction Act by helping entities that co-own clean energy projects access clean energy tax credits through elective pay – commonly known as direct pay.

Prior to the Inflation Reduction Act, many entities – like state and local governments, Tribes and territories, public school districts, rural electric co-ops, and tax-exempt organizations like churches, hospitals, higher education institutions, and non-profits – could not benefit from clean energy tax credits because they had little or no federal tax liability. Direct pay enables these entities and organizations to access the full value of clean energy incentives and helps projects get built more quickly and affordably to reduce costs and benefit businesses and communities. 

The guidance Treasury is issuing today provides greater clarity and flexibility for direct pay eligible entities that want to jointly invest in clean energy projects – for example, a tax-exempt entity co-investing in a clean energy project with a for-profit developer, or multiple tax-exempt entities or governments that are seeking to jointly invest in clean energy projects.

“The Biden-Harris Administration is focused on continuing the clean energy investment boom and ensuring all Americans benefit from the growth of this sector. Direct pay is helping more clean energy projects be built quickly and affordably, and American communities are benefitting as a result. Today’s rules will increase the availability of capital for clean energy projects by providing certainty and flexibility for state and local governments, Tribes and territories, non-profits, and more to benefit from these resources,” said U.S. Deputy Secretary of the Treasury Wally Adeyemo. 

Specifically, Treasury’s final regulations make targeted modifications to existing partnership tax rules clarifying how co-owned projects in the clean energy space can elect not to be treated as partnerships for tax purposes, and providing such projects additional flexibility. These changes are important because under the Inflation Reduction Act, partnerships are not among the entities that are generally eligible for direct pay. By collectively electing out of partnership status, co-owners that are eligible for direct pay can take advantage of direct pay for the share of the project that they own while co-owners that are not eligible for elective pay could use transferability.

In response to comments received, the final regulations clarify that eligible co-ownership arrangements can be organized to own and operate property giving rise to any of the Inflation Reduction Act credits where elective pay is available. It also enables such arrangements to invest in clean energy projects through a noncorporate entity.

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WASHINGTON — Today, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) is designating six senior Hamas officials, including the terrorist group’s representatives abroad, a senior member of the Hamas military wing, the Izz Al-Din Al-Qassam Brigades, as well as individuals involved in supporting the terrorist group’s fundraising efforts and weapons smuggling into Gaza.

“Hamas continues to rely on key officials who seemingly maintain legitimate, public-facing roles within the group, yet who facilitate their terrorist activities, represent their interests abroad, and coordinate the transfer of money and goods into Gaza,” said Acting Under Secretary of the Treasury for Terrorism and Financial Intelligence Bradley T. Smith. “Treasury remains committed to disrupting Hamas’s efforts to secure additional revenue and holding those who facilitate the group’s terrorist activities to account.”  

This action marks OFAC’s ninth sanctions tranche since October 7, 2023, targeting Hamas and its supporters. The most recent action on October 7, 2024 targeted Hamas’s use of sham charities and one of its prominent international supporters. OFAC also targeted Hamas cyber actors on April 12, 2024 and some of their financial facilitators and sources of funding on October 18, 2023 and October 27, 2023. The United States government has also worked closely with its key international partners and allies in countering Hamas, including a joint designation with Australia and the United Kingdom on January 22, 2024, as well as three actions with the United Kingdom on March 27, 2024, December 13, 2023, and November 14, 2023, all targeting Hamas leaders and financiers. 

Individuals targeted today are being designated pursuant to Executive Order (E.O.) 13224, as amended, which targets terrorist groups and their supporters.

HAMAS LEADERS AND FINANCIERS ACTIVE ABROAD

Abd al-Rahman Ismail abd al-Rahman Ghanimat (Ghanimat) is a longtime member of Hamas’s military wing, the Izz Al-Din Al-Qassam Brigades. While he is now based in Türkiye, Ghanimat, who also founded a section of Hamas responsible for supporting Hamas interests in the West Bank, has been involved in multiple attempted and successful terrorist attacks, including the 1997 daytime bombing of a café in Tel Aviv. 

Musa Daud Muhammad Akari (Akari) is a senior Hamas official based in Türkiye who facilitates the flow of funds from Türkiye into Gaza and the West Bank for Hamas. Akari was previously convicted of kidnapping and murdering an Israeli border police officer. 

Salama Mari (Mari) is a Hamas official based in Türkiye involved in financial facilitation for the group. Mari was previously imprisoned for his role in a 1993 attack in the West Bank that killed an Israeli soldier. 

Mohammad Nazzal (Nazzal) is a Hamas official who has provided support to the terrorist group for over 30 years. As a senior leader serving on Hamas’s Council on International Relations, Nazzal represents Hamas’s interests to a variety of international audiences.

Basem Naim (Naim) is a senior Hamas member based in Gaza, who has participated in Hamas’s engagements with Russia and been a part of Hamas delegations to other countries. Naim also holds a leadership role on Hamas’s Council on International Relations.

Ghazi Hamad (Hamad) is a long-time Gaza-based Hamas leader who served as the editor of Hamas propaganda outlets and is authorized to speak publicly on behalf of Hamas. In addition to these public facing and propaganda roles, Hamad previously served as a Hamas senior official overseeing border crossings at Gaza. While these border crossings were one of the primary ways Hamas smuggled weapons into Gaza, these crossings were also used to smuggle the construction equipment and materials Hamas needed to build an extensive tunnel network they intentionally interspersed among Palestinian civilians.

OFAC is designating Ghanimat, Akari, Mari, Nazzal, Naim, and Hamad pursuant to E.O. 13224, as amended, for having acted or purported to act for or on behalf of, directly or indirectly, Hamas, a person whose property and interests in property are blocked pursuant to E.O. 13224.

SANCTIONS IMPLICATIONS

As a result of today’s action, all property and interests in property of the designated persons described above, and of any entities that are owned directly or indirectly, 50 percent or more by them, individually, or with other blocked persons, that are in the United States or in the possession or control of U.S. persons are blocked and must be reported to OFAC. Unless authorized by a general or specific license issued by OFAC, or exempt, OFAC’s regulations generally prohibit all transactions by U.S. persons or within (or transiting) the United States that involve any property or interests in property of designated or otherwise blocked persons.

U.S. persons must comply with OFAC regulations, including all U.S. citizens and permanent resident aliens regardless of where they are located, all persons within the United States, and all U.S.-incorporated entities and their foreign branches. Non-U.S. persons are also subject to certain OFAC prohibitions. For example, non-U.S. persons are prohibited from causing or conspiring to cause U.S. persons to wittingly or unwittingly violate U.S. sanctions, as well as engaging in conduct that evades U.S. sanctions. Violations of OFAC regulations may result in civil or criminal penalties.

OFAC may impose civil penalties for sanctions violations based on strict liability, meaning that a person subject to U.S. jurisdiction may be held civilly liable even if such person did not know or have reason to know that it was engaging in a transaction that was prohibited under sanctions laws and regulations administered by OFAC. OFAC’s Economic Sanctions Enforcement Guidelines provide more information regarding OFAC’s enforcement of U.S. economic sanctions, including the factors that OFAC generally considers when determining an appropriate response to an apparent violation. For additional information on complying with U.S. sanctions and export control laws, please see the Department of Commerce, Department of the Treasury, and Department of Justice Tri-Seal Compliance Note.

Furthermore, engaging in certain transactions with the individuals designated today entails risk of secondary sanctions pursuant to E.O. 13224, as amended. Pursuant to this authority, OFAC can prohibit or impose strict conditions on opening or maintaining, in the United States, of a correspondent account or a payable-through account of a foreign financial institution that knowingly conducts or facilitates any significant transaction on behalf of a Specially Designated Global Terrorist.

The power and integrity of OFAC sanctions derive not only from OFAC’s ability to designate and add persons to the Specially Designated Nationals and Blocked Persons (SDN) List, but also from its willingness to remove persons from the SDN List consistent with the law. The ultimate goal of sanctions is not to punish, but to bring about a positive change in behavior. For information concerning the process for seeking removal from an OFAC list, including the SDN List, please refer to OFAC’s Frequently Asked Question 897 here. For detailed information on the process to submit a request for removal from an OFAC sanctions list, please click here.

Click here for more information on the individuals designated today.

Additional Treasury resources on countering the financing of terrorism:

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