Government Spending Package Includes More Funding for Export Control, Sanctions Efforts

The Senate this week unveiled its fiscal year 2023 government spending package, which includes additional funding for key export control, sanctions and trade priorities. The package also includes another round of emergency defense aid for Ukraine.

Under the bill, the Bureau of Industry and Security would receive $191 million for 2023, an increase in $50 million from last year’s budget, which directed the agency to expand its export enforcement field activities in the U.S. and abroad (see 2203100014). Lawmakers said BIS needs more funding to effectively implement its export controls, including against Russia. The Senate called for “aggressive enforcement of Russian and Belarussian export controls and other BIS efforts to counter Russia's invasion of Ukraine.”

BIS this year has issued a range of new export controls and licensing requirements for items destined to Russia, including new additions to the Entity List and foreign direct product rule restrictions (see 2212070022, 2203020072 and 2202240069). Undersecretary Alan Estevez earlier this year delivered a pitch for more resources for the agency, saying that an investment in BIS is “a good return on investment in national security" (see 2212060059).

The spending package also includes more than $61 billion for the State Department, some of which will be dedicated to “sanctions implementation.” Lawmakers specifically called on the agency to strengthen its implementation of the Global Magnitsky Human Rights Accountability Act and could require the State Department to “consult” with Congress’ appropriations committees within 90 days after the package is enacted to discuss “implementation of these directives.”

If the package is passed, the State Department also would be required to brief Congress on any U.S. “plan to use sanctions” against Chinese officials or entities “complicit in genocide, crimes against humanity, and other gross violations of human rights.” The bill specifically calls for a briefing for planned sanctions under the Hong Kong Autonomy Act and the Uyghur Human Rights Policy Act.

Other provisions would require the U.S. to sanction anyone "conducting significant transactions" with people in Iran responsible for the government's "abuses toward dissidents." Under the provision, the State and Treasury departments would be required to notify Congress of any people or foreign financial institution that "knowingly" conducts such a transaction, and the State Department would be authrotized to "prohibit the opening, or prohibit or impose strict conditions on the maintaining, in the United States, of a correspondent account or a payable-through account by a foreign financial institution."

The spending package also calls for the Treasury’s Office of Terrorism and Financial Intelligence, which houses the Office of Foreign Assets Control, to receive $216 million, an increase of 21 million from 2022, to “support sanction targeting and implementation." continue investments to protect the integrity of the financial system and enhance Treasury’s economic and financial sanctions programs.” The "Russia policy and financial measures that Treasury has already implemented represents by far the most ambitious program of financial measures in Treasury’s history," lawmakers said.

The International Trade Administration would also see an increase in funding, up $55 million from last year. "Over the past three years, ITA has facilitated $296 billion in U.S. exports and foreign investment, assisting over 78,500 U.S. companies, 86 percent of which are small- and medium-sized businesses," lawmakers said.

The emergency supplemental package for Ukraine would authorize more military and weapons exports to the country as it defends itself from Russia. Lawmakers would award more than $47 billion in funding to support Ukraine security assistance to Ukraine, including $19.8 billion to "arm and equip Ukraine and" allies to counter Russian aggression."

The spending package received applause from both sides of the aisle. Senate Minority Leader Mitch McConnell, R-Ky., called it an "impressive outcome for Republican negotiators," saying Dec. 20 on the Senate floor that it will provide much-needed support for Ukraine and ensure the U.S. continues "out-innovating and outcompeting Russia and China."

Senate Majority Leader Chuck Schumer, D-N.Y., called on the chamber to quickly pass the bill. "The sooner we pass the omnibus, the better," he said on the Senate floor. "We have until Friday before funding runs out, but we ought to get it done well before then."