Sen. Angus King, I-Maine, a member of the Senate Armed Services Committee, arrives for a Democratic policy meeting at the Capitol in Washington, Tuesday, March 8, 2022. Credit: J. Scott Applewhite / AP

WASHINGTON — A bipartisan group of U.S. senators has introduced a bill to impose secondary sanctions to anyone buying or selling Russian gold in an effort to block one of Moscow’s remaining possible avenues for offsetting the collapse of its currency.

Angus King of Maine — along with Republicans John Cornyn of Texas and Bill Hagerty of Tennessee and New Hampshire Democrat Maggie Hassan — launched the legislation to stop anyone transacting with or transporting gold from Russia’s central bank holdings or selling gold physically or electronically in Russia. Russia’s gold stockpile was valued at $132.3 billion as of the end January.

“By sanctioning these reserves, we can further isolate Russia from the world’s economy and increase the difficulty of Putin’s increasingly costly military campaign,” King said in a statement on the measure, first reported by Axios.

The move may deter banks in countries such as China and India from buying or lending against Russia’s sovereign gold stockpile, which is the fifth-biggest in the world. Western lenders are already barred from conducting transactions with the central bank, effectively cutting its gold out of the biggest markets in New York and London.

The Bank of Russia spent six years relentlessly buying gold, doubling its holdings as part of an effort to reduce the proportion of dollars held in its reserves. It stopped in March 2020 as prices spiked at the onset of the COVID-19 pandemic and has largely kept its stockpile steady since. Last month it announced it would resume buying from domestic producers.

While aid to Ukraine is set to be part of a must-pass spending bill Congress is racing to finish ahead of a March 11 deadline, it is not yet clear if a ban on Russia oil or additional sanctions would be part of that measure.

Prior to Russia’s invasion of Ukraine, the Senate was unable to agree on a package of sanctions, in part because of a reluctance to apply them to parties transacting with Russia.

The group of senators said Russia is purchasing gold and then selling it for hard currency, softening the blow from crippling sanctions on its economy from the U.S. and Europe.

“Russia has taken a page out of Venezuela’s book by exploiting a loophole in current sanctions that allows them to launder money through the purchase and sale of gold,” Cornyn said in a statement. “This legislation would apply secondary sanctions to parties who help Russia finance their war by buying or selling this blood gold.”

Erik Wasson and Eddie Spence Bloomberg News (TNS)