NJ Law Places a Ban on Business with Russia, Belarus
New Jersey is the latest state to announce that it is placing a ban on all business dealings with Russia and its military ally Belarus. The ban applies to all state and local governments within the Garden State, and it comes as the result of a new bill that was approved by the Senate Budget and Appropriations Committee following Russia’s invasion of Ukraine.
The bill was signed into law by Governor Phil Murphy earlier this month. It marks New Jersey’s inclusion on a growing list of states and nations aiming to pressure Russian President Vladimir Putin into withdrawing troops from Ukraine. The overall impact of the measure, however, is yet to be seen.
The law is only one component of the State’s response to the invasion and ongoing attacks. The Treasury Department is looking into the State’s finances in order to determine if public employee pension funds are invested in Russia or if there are any contracts currently held between the state and Russian businesses. Individuals who are found to be invested with the governments of Russia or Belarus will be put on a Treasury Department list banning them from a range of activities, including getting a state contract and receiving a tax break.
The law also restricts the state from investing pension or annuity funds in a company owned or controlled by either of the two governments, and any current holdings must be sold off within two years. In addition, any dealings with banks tied to Russia and Belarus is prohibited.
The law’s signing follows recent U.S. sanctions and a ban on Russian oil, liquified natural gas, and coal, all of which have contributed to rising gas prices in recent weeks. The ban will remain in place until the U.S. sanctions end.
The bill was drafted and passed within a quick period of time, having been introduced on February 28, 2022 and then signed into law on March 9, 2022. Because of this, the Office of Legislative Services was unable to analyze and determine the financial impact the ban would have due to a lack of information on potential contracts and investments with Russia and Belarus.
What is known is that there will be an impact. According to Michigan State University’s International Business Center, citing U.S. census data, New Jersey imported $2.78 billion in goods from Russia in 2020, making the superpower the 10th largest supplier of goods to this State.
The war in Ukraine is already resulting in rising prices throughout New Jersey and the U.S. In addition to rising gas prices, which were already high prior to Russia’s invasion, consumers have also been paying higher prices for goods such as milk and groceries due to inflation.
Whether the growing number of sanctions against Russia have an influence on the country’s actions in Ukraine are yet to be seen.