NJ moves closer to banning investment ties with Russia following Ukraine invasion
New Jersey leaders are moving closer to imposing state-level economic sanctions on Russia over the country’s invasion of Ukraine.
The state Senate voted 39 to 0 on Thursday to pass a bipartisan bill that would bar any public entity in New Jersey from doing business with the Russian government or any company with ties to it.
Under Bill S1889, state and local governments in New Jersey would be prohibited from making public investments or other financial agreements with any person or company with investment business in Russia. This includes investments in pensions, public contracts, professional services, agreements with Russian financial institutions and tax allowances.
The measure also applies to relations with Belarus because Russian troops entered part of Ukraine through this country.
State Sen. Paul Sarlo, D-Bergen, one of the main sponsors, said New Jersey was the first state to take such action against Russia. He called on other states to take similar steps to strengthen sanctions already imposed by the United States and other countries.
“We will not sit idly by while Russia wages an unwarranted war against Ukraine without action,” Sarlo said in a statement. “We should try to bleed (Russian President Vladimir) Putin and his oligarchs from their profit.”
State Senator Declan O’Scanlon, R-Monmouth, said the unified action was not intended to hurt peaceful Russian citizens “but to send a strong message to oligarchs and others in positions of power.”
“While Putin may be able to control the flow of information to Russia, he will not be able to protect his country from the economic impact of sanctions and divestments undertaken by governments around the world, including the state of New Jersey,” O’ Scanlon said in a statement.
It is now up to the state Assembly to pass the bill before Gov. Phil Murphy can decide whether or not to sign it. The Assembly is expected to vote on the urgent legislation next week.
The legislation sent state Treasury officials scrambling last week to identify any Russian investment made through the New Jersey pension fund, which had a recent valuation of $93.8 billion.
As of Oct. 31, the fund had at least $226.6 million tied up in Russian stocks and another $21.4 million in Belarus, a Russian ally, according to a recent state investment report.
These numbers have declined in recent months, either through divestments or losses. The RTS index, which tracks Russia’s main stock market, has fallen around 52% since early February, and Russian markets were closed for the fourth straight day on Thursday.
“The total exposure of New Jersey pension funds to Russian investments is approximately $50 million as of the end of Feb. 28,” Treasury spokeswoman Jennifer Sciortino said. “The administration is working closely with Senator Sarlo on legislation that would guide divestment from Russia-based pension funds.”
The Senate’s passage of the measure comes a day after Murphy signed the order to all New Jersey state agencies to review how they can withhold state resources from supporting the Russian government. The governor said the move was intended to complete the bill.
Under Murphy’s executive order, all agencies are required to review their authority to suspend or revoke the licenses, permits, registrations and certifications of companies that invest directly in companies owned or controlled by the governments of Russia and Belarus. The order also directs the agencies to review the state’s ability to boycott or stop the importation or purchase of goods or services provided by the two countries.
CONTINUED: Murphy directs all NJ agencies to withhold state resources from supporting Russia
Murphy, who has repeatedly called Sarlo, said Murphy’s order “will not waste time” while the legislation moves through the state legislature “in an expedited fashion.”
“Together we will deliver a plan to enact public sanctions that will send a clear message that Russia will pay the price for the unprovoked and unwarranted attack on a democratically elected government that represents a free people,” Sarlo added.
Sarlo said one of the main purposes of the measure was to prevent Russian oligarchs from winning incentives for real estate developments in New Jersey.
Those seeking public transactions with Russian or Belarusian investments could face fines of more than $1 million and possible criminal charges under the bill.
The sanctions would remain in place for four years.
On Thursday, the Senate also voted 39 to 0 to pass a bipartisan resolution (ACR115) condemning Russia’s attack and declaring it stood in solidarity with Ukraine. The Assembly adopted the same resolution 75-0 on Monday.
Meanwhile, Murphy wrote a letter to President Joe Biden on Wednesday saying New Jersey “stands ready and able” to accept refugees from Ukraine.
Republican lawmakers in Jersey Shore’s 10th District said Wednesday they support the sanctions bill, but said it would have little to no effect on Russia’s economy as long as the United States States would continue to buy oil from Russian companies.
“Since Russia’s economy is heavily dependent on energy exports, the only way to effectively sanction the country would be for the United States and its allies to cease oil imports and finally become energy independent,” he said. said Sen. James Holzapfel, R-Monmouth, mentioned.
This is not the first time New Jersey has imposed similar sanctions on a foreign country. In 2016, then governor. Chris Christie signed a law prohibiting the state public workers’ pension fund from investing in companies boycotting Israeli goods and services.
In 2018, the state pension fund divested from a Danish bank that investment officials said was boycotting Israeli companies. And last year, the pension fund withdrew its $182 million in investments from Ben & Jerry’s parent company following the ice cream maker’s decision to stop selling its products in the Israeli-occupied territories.
In 1985, then governor. Tom Kean has signed legislation to make New Jersey the first state to hand over the pension fund of companies doing business with the South African government as part of the campaign to end apartheid.
The Associated Press contributed to this report.
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