At Senate Foreign Relations Committee Hearing, Portman Presses Treasury Department Official on Imposing Energy Sanctions Against Russian Energy Production

September 28, 2022 | Press Releases

WASHINGTON, D.C. – Today during a Senate Foreign Relations Committee hearing, U.S. Senator Rob Portman (R-OH) questioned Elizabeth Rosenberg, the Treasury Department’s Assistant Secretary for Terrorist Financing and Financial Crimes, on whether the department planned to extend their General License 8C, which allows energy-related transactions to continue with certain Russian banks without being subject to sanctions. Currently, the license is set to expire in early December. Senator Portman believes the license should not be extended in an effort to cut funding for Russia’s energy sector. When he asked Assistant Secretary Rosenberg if the license would be renewed, she refused to answer, saying instead that they were focused on implementing a controversial price-cap policy amongst the G7.

A transcript of Senator Portman’s questioning can be found below and the video can be found here.


Senator Portman: “Thank you, Mr. Chairman, as you know I was here earlier and I’m sorry, I had to step out for a markup, but I really appreciate you holding this hearing. You and Senator Risch and your vigilance in ensuring that we can put the squeeze on Russia because that’s all that is going to get them to the table. I will say, earlier there was a discussion by Mr. O’Brien about the fact that we need to demonstrate, you said, ‘the violence and criminality going on in Ukraine.’ The atrocities are clear. I was in Bucha a month ago, I saw where the mass graves are. In Izium, we learned about last week, which is this part of northeast Ukraine that has now been liberated – torture, rape, executions of civilians. Forgetting the bombings of hospitals and churches and the apartment buildings, forgetting the fact that they are kids out of Ukraine and putting them with Russian families when they could keep with in Ukraine with extended family. These are actually definitions of genocide. So, we need to understand, this is going on as we talk and what are we doing about it? Well, we’re helping Ukrainians militarily, and I think that’s been extremely helpful to their success, as we’ve seen on the battlefield. I think that’s all that gets Vladimir Putin to the table, is feeling some pressure on the battlefield. Second, he’s got to feel pressure at home and I don’t think they are feeling the squeeze. I appreciate all you are doing. I agree with Senator Kaine said, but team we have to realize that this is not working yet. I mean you look at these numbers, you said that the Russian economy is bleak and deteriorating. That’s how I would describe the Ukrainian economy. The Ukrainian economy is down, by best estimates, 40 to 50 percent. Forty to 50 percent, the GDP, this year. How about the Russian economy? How far is it down this year? Well based on the IMF numbers that we have, the best numbers we have, it’s down 8.5 percent in 2022. Our economy is down this year a couple of points. So 8.5 percent versus 45 percent or 40 to 50 percent, the economic comparison is, to me, pretty concerning. So, I’m not sure they are feeling the squeeze in terms of the sanction side. They are starting to feel the battlefield successes by the Ukrainians and I think that will help get them to the table. We’ve got to tighten up the squeeze on Russia if we all agree that what they are doing are atrocities. And I agree with that and so does the free world.

“Energy. Windfall earnings this year in Russia, the revenue that Russia is getting from energy is up 30 percent this year. If I’m wrong, correct me. Is that accurate? The revenue is up 30 percent this year. That revenue is funding the war machine. So my questions are many but Ms. Rosenberg, we’re going to start with you. I’d like to reiterate the importance of Europe and their dependence on Russian energy. We’ve talked about that before. I’ve given speeches on this on the floor, that Europe needs to do more in terms of the energy side. LNG imports are up, that’s good. Twice as high as they were last September, right now. And I’m all for the LNG exports, from us and from the Middle East, to go to help. And from other countries. And the share of Russian natural gas has gone down, that’s good. But what I want to know is, the Treasury Department has renewed the General License 8C, which has allowed certain Russian energy transactions to continue without sanction. Is the Treasury Department prepared to sanction entities once that waiver expires in December? I think it’s on December 5th. Or does the Department intend to extend that license again?”

The Honorable Elizabeth Rosenberg, Assistant Secretary for Terrorist Financing and Financial Crimes, U.S. Department of the Treasury: “Senator, thank you for the question. I couldn’t agree more that we need to be laser-focused on Russia’s windfall earnings on energy and deny Russia some of that earning in order to fund its brutal war. That’s led to this price-cap policy amongst the G7, which would seek to keep Russian oil flowing at a lower price, in order to deny Russia that revenue. One thing to note, you’ve mentioned General License 8C. This is, as you note, the method by which purchasers of Russian oil can continue to pay for that oil. The price-cap policy, in keeping that oil on the market, though at lower prices, requires that those purchasers be able to purchase it. So, that is part of that conceived policy here which would keep the oil on the market, but as we’ve noted, diminish the revenue. So that’s part and parcel of this broader policy. It’s different from prior sanctions, which have focused on denying volume, rather than revenue. Here, given the critical interconnectivity of Russia’s economy with so many others, for commodities, energy in particular, this is part of the policy.”

Senator Portman: “So, I’m at the end of my questioning time. Let me make sure I understand what you are saying. So, you’re saying that General License 8C may well be extended in early December because instead you believe that the price-cap is more important. That should be used instead of the energy sanctions under the 8C license, is that what you are saying?”

Assistant Secretary Rosenberg: “Senator, I’m not in the position to forecast exactly what will happen with this and other general licenses. Nevertheless, I would emphasis here that in order for the price cap policy to successfully deprive Russia of revenue by pushing down the price, there must be a means to pay for it.”

Senator Portman: “Let me ask you about the price cap. Have you set a price yet for the price cap? Yes or no?”

Assistant Secretary Rosenberg: “The process has begun to set the price.”

Senator Portman: “Have you set a price yet? Yes or no?”

Assistant Secretary Rosenberg: “The process has currently begun in order to set that price.”

Senator Portman: “Have you set a price yet? Yes or no?”

Assistant Secretary Rosenberg: “The process has begun Senator, I—”

Senator Portman: “Have you set a price cap yet? Yes or no?”

Assistant Secretary Rosenberg: “We are in the process, Senator, of doing so.”

Senator Portman: “You won’t say no. Why won’t you say no? You haven’t set a price yet.”

Assistant Secretary Rosenberg: “Senator I appreciate your question, but we have begun this process with the G7 partners here in the price cap coalition.”

Senator Portman: “Okay, so the answer is no. You’ve acknowledged that, correct?”

Assistant Secretary Rosenberg: “Senator I appreciate your question, we have begun this process and fully intend to do so.”

Senator Portman: “Maybe you can follow up with that, my time is expired.”

Chairman Menendez: “The answer is no because they have not established it yet. They are in the process of establishing it. So, if you ask right now what the price cap is, there is no price cap to give you. But they are in the process of establishing it. That’s my take away from the answer.”

Senator Portman: “Yeah, so, I think General License 8C is more effective. I understand what you are trying to do with the price cap. I think going against market forces is very difficult to do. I think there are some practicality issues there, so my hope is that we will not extend General License 8C and we will continue to do what we can to truly squeeze Russia on the economic side, and that has to be through energy. Thank you, Mr. Chairman.”