New Russia sanctions law enacted – what you need to know
New Russia sanctions legislation provides “secondary tariff” authority to target countries most involved in the Russian oil and gas trade (and Russia itself) and codifies and incrementally expands sanctions targeting Russia; however, the actual impact depends heavily on executive branch implementation.
On September 18, 2026, President Trump signed the Lindsey O. Graham Sanctioning Russia and Iran Act of 2026 (the Act) into law following passage by both chambers of Congress.[1] The Act, which is the most significant legislative action on Russia sanctions since the 2017 enactment of the Countering America’s Adversaries Through Sanctions Act (CAATSA)[2], provides the President with new authority to impose additional tariffs on Russia and its trading partners and authorizes the imposition of sanctions against a variety of Russian and non-Russian persons. It also limits the ability of the President to lift or modify existing sanctions on Russia, codifying many of the post-2022 sanctions imposed on Russia under executive authorities and putting in place a CAATSA-style disapproval mechanism that would (at least in theory) allow Congress to block the lifting of sanctions or delistings of particular sanctioned persons. Notwithstanding this attempt at constraint, the Act largely leaves intact presidential discretion over the implementation of Russia-related sanctions, as many of the sanctions authorized or imposed under the Act either require a determination by the President to become effective or are subject to waiver under certain conditions, and Congress’ ability to block changes in the sanctions under the Act can only be sustained by veto-proof majorities.
We provide a more detailed overview of the provisions of the Act below.
New tariff authorities
The Act provides the President with broad discretion to set tariff rates both on Russian imports and on imports from countries that are the leading purchasers of Russian energy or facilitate sanctions evasion. This is the most significant addition to the President’s coercive economic toolkit provided for by the Act, particularly in light of the Supreme Court’s Learning Resources decision earlier this year holding that the International Emergency Economic Powers Act (IEEPA) does not authorize the President to impose tariffs.
Section 112 of the Act directs the President to increase tariffs on Russian goods, including oil, natural gas, petroleum and petrochemical products, and coal, to a rate of up to 500 percent ad valorem within 30 days of enactment; however, the President retains discretion to set the rate at any rate up to the 500 percent cap. Imports of Russian goods into the United States have decreased significantly since 2022 in light of sanctions (including categorical prohibitions on the importation of certain categories of goods), though roughly $2 billion worth of Russian goods were imported through July of this year, according to trade statistics published by the U.S. Census Bureau.
More significantly, Section 113 of the Act authorizes the President to impose tariffs of up to 100 percent (sometimes called “secondary tariffs,” after “secondary sanctions” threatening the imposition of sanctions on persons dealing with U.S. sanctions targets outside U.S. jurisdiction) on imports from countries that:
- (i) knowingly made new purchases of crude oil or natural gas that originated in the Russian Federation beginning 30 days after the date of enactment; and (ii) were among the five largest importers, by total volume, of crude oil or natural gas[3] that originated in the Russian Federation during the most recent 12-month period preceding the date of the enactment; or
- were among the top five countries facilitating Russian oil sanctions evasion[4] during the most recent 12-month period preceding the date of the enactment.
Duties imposed under these provisions are imposed on top of all other tariffs. As of the time of this client update, Senate aides have reported that the current top five purchasers of Russian crude oil are China, India, Slovakia, Hungary and Azerbaijan. The top importers of Russian natural gas are China, France, Japan, Hungary and Belgium. There is, however, an exception to the gas tariff authority exempting countries that both account for less than 15% of Russian gas exports and have taken significant steps to reduce their purchases.
On an ongoing basis, every 180 days, the U.S. Trade Representative (USTR) is required to make new determinations of the five largest importers of Russian oil and natural gas in the preceding 12-month period and is given authority to increase or decrease existing tariffs in response to significant increases or decreases in Russian oil or gas purchases. Prior to imposing or modifying duties, the President or USTR must submit a written justification to Congress providing a substantive rationale and methodology for the identification of the countries subject to duties and determination of the applicable duty rates. This requirement appears intended to put pressure on the President not to use the tariff authority provided by the Act for reasons other than those provided under the Act, though an implausible justification carries only political consequences. Notably, while the termination of duties imposed under the Act is subject to the Congressional disapproval process discussed below, the imposition of duties is not.
All Russia-related authorities in the Act, including the tariff authorities, sunset after 5 years if not further extended.
Overview of sanctions provisions
The Act builds on, and in many respects codifies, the extensive sanctions architecture that the executive branch has constructed since 2022 through a series of Executive Orders (EOs) (principally EO 14024), Treasury determinations and directives, and sanctions designations by the Treasury Department ‘s Office of Foreign Assets Control (OFAC) and U.S. State Department. While the codification of existing sanctions is a significant development, the addition of notionally “new” sanctions designation authorities under the Act is less so. While some existing sanctions are categorical, the new authorities only apply to persons designated by the President (or his delegee) as meeting the criteria. While some of the statutory language purports to mandate designation, if no designation is made there is no impact other than any political pressure. The sanctions are also subject to broad waivers based on a determination that waiver is in the “national interest.” Finally, the President has always had broad authority to expand existing sanctions by issuing a new executive order. Thus, the scope and impact of any new sanctions under the Act will depend on executive branch implementation decisions, just as was the case prior to enactment of the Act.
Exceptions and waivers
Section 114 of the Act provides for a number of exceptions from sanctions and other measures imposed under the Act, including typical exceptions for humanitarian trade and humanitarian assistance, intelligence and law enforcement activities, admission of individuals into the United States to comply with international agreements, and official U.S. government business. The Act also includes bespoke exceptions for:
- Activities carried out under certain civilian nuclear cooperation agreements between the United States and Russia.
- Certain imports of low-enriched Uranium.
- Transactions involving non-Russian oil that transits Russia.
- Transactions permitted under OFAC general licenses.
- Activities within 270 days from the date of enactment of the Act that are related to wind-down of entities in Russia owned by non-Russian entities or the operation of Russian entities owned by U.S. persons who are engaged in good faith wind-down or divestment efforts.
- Activities of NASA.
Section 115 of the Act authorizes the President to waive the applicability to any foreign person of any sanction, other restriction, or duty otherwise provided for under the Act upon providing a prior certification to Congress that the waiver is in the national interest and a report explaining the basis for the certification. This broad waiver authority, subject to a relatively low “national interest” standard, further reinforces that the implementation of the Act is largely if not entirely at the discretion of the President.
Termination and Congressional review provisions
Section 117 establishes a Congressional review procedure (similar to what CAATSA put in place with respect to the first set of Russia-related sanctions) that must be followed prior to the termination of any sanction, restriction, or duty under the Act, which includes preexisting sanctions under executive authorities codified by the Act. The procedure requires the President to submit to Congress at least 30 days (or 60 days if during the summer recess period) before such termination a report including the following certifications:
- In the case of measures with respect to a Russian person or the Russian Federation, that Russia has signed a peace agreement accepted by Ukraine and ceased hostilities against and efforts to subvert Ukraine.
- In the case of measures with respect to a non-Russian foreign person or foreign country, that the person or country has stopped the activity that was the basis for the imposition of the measure and provided assurances with respect to future sanctionable activity.
Congress may block the termination of any measure through a joint resolution of disapproval; such resolutions are subject to Presidential veto, however, meaning that they can only be sustained if supported by veto-proof majorities.
Iran
Though referenced in the title of the Act, its Iran-related provisions are purely ministerial – they extend the sunset of the Iran Sanctions Act through the end of 2031.
[1] Lindsey O. Graham Sanctioning Russia and Iran Act of 2026, Pub. L. No. 119-111, 140 Stat. 1026 (2026).
[2] See Davis Polk, “The Countering America’s Adversaries Through Sanctions Act Becomes Law” (Aug. 4, 2017), available at https://www.davispolk.com/insights/client-update/countering-america-s-adversaries-through-sanctions-act-becomes-law-may-2026. .
[3] An exception from the duties is provided for countries that would otherwise be subject to them for imports of Russian natural gas where the country (1) accounts for less than 15 percent by volume of Russia’s exports in the preceding 12 month period and (2) has taken significant steps to reduce its imports of natural gas.
[4] For purposes of the Act, a country facilitates Russian oil sanctions evasion if persons located in or organized under the laws of that country are knowingly engaged in certain activities to circumvent sanctions on Russian oil – there is no requirement of any state support for such sanctions evasion activities.
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Section | What it does | What matters |
|---|---|---|
Section 102: Imposition of sanctions on certain persons | Provides for the imposition of asset blocking sanctions and visa restrictions on certain categories of persons, including:
Codifies all blocking and visa sanctions previously imposed under EO 14024 and related executive orders, including with respect to all persons sanctioned under those authorities prior to September 18, 2026 (§ 102(d)). | Most persons that would be sanctionable under this section likely could already be sanctioned under EO 14024, and while the sanctions are purportedly mandatory, they only apply if the President or a delegee determines to impose them, so ultimately the impact will be determined by executive branch implementation. Certain provisions (e.g., the ability to rely on partner vessel designations) may facilitate OFAC and State Department efforts targeting if the administration elects to push forward with new designations. The codification of existing blocking sanctions is potentially significant, as OFAC has removed a number of persons sanctioned under EO 14024 from the SDN List in the last 18 months in parallel with a broader effort to rationalize the SDN List and remove stale listings. Going forward, any such delistings will now be subject to the Act’s termination and congressional disapproval process. |
Section 103: Sanctions on Russian financial institutions | Provides for the imposition of one or more types of sanctions on:
Sanctions under this provision are to be imposed within 30 days of enactment and periodically reviewed thereafter to identify additional financial institutions meeting these criteria. | This provision is unlikely to have much practical impact beyond codifying existing sanctions against Russian state-owned banks. The specifically identified financial institutions are all subject to existing sanctions (as are most Russian banks), and the provision is crafted to not require the imposition of blocking sanctions on the Russian Central Bank (currently subject to non-blocking transactional prohibitions under Directive 4). Codification makes any lifting of the prohibition subject to the termination and congressional review provisions of the Act. FFIs that transact with sanctioned Russian banks also may be sanctioned under existing authorities, and the affirmative designation requirement leaves any sanctions entirely at the discretion of the executive branch. |
Section 104: Imposition of sanctions on government-controlled entities | Provides for the imposition of sanctions on entities determined to be majority owned or controlled by, or “otherwise affiliated with” the Russian government. Requires initial and periodic reviews of entities that may meet criteria for sanctions. | Most persons that would be sanctionable under this section likely could already be sanctioned under EO 14024, which authorizes the designation of entities “owned or controlled by, or that have acted or purported to act for or on behalf of” the Government of the Russian Federation. Hundreds of government-controlled or -affiliated entities have been designated under EO 14024. While the sanctions are purportedly mandatory, they only apply if the President or a delegee determines to impose them, so ultimately the impact will be determined by executive branch implementation. |
Section 105: Prohibition on transfers of funds involving the Russian federation | Effective 30 days after enactment, U.S. depository institutions and broker-dealers may not process transfers of funds to or from the Russian government, including any state-owned entity, or for the direct or indirect benefit of a Russian government official, except where the funds transfer is ordinarily incident and necessary to an underlying transaction authorized by an OFAC general or specific license. | This provision will create some net new compliance obligations for banks and broker-dealers by extending prohibitions to some Russian individuals and entities that are not currently sanctioned. While the prohibition includes an exception for OFAC-licensed payments, the exception does not extend to payments that are currently not prohibited by or exempt from sanctions. OFAC could potentially issue new or modified general licenses to permit certain of these payments to continue. |
Section 106: Prohibition of listing or trading Russian entities on U.S. securities exchanges | No later than 30 days after enactment, the SEC is required to prohibit the listing or trading on a national securities exchange of securities of issuers that are: Russian government officials, Russian government-controlled entities, or individuals or entities “affiliated with” the Russia government. | This provision is likely to have little to no practical impact. U.S. securities exchanges have generally delisted Russian issuers (whether or not affiliated with the government) and transactions involving securities of Russian issuers are subject to a number of additional prohibitions under existing sanctions, including the new investment prohibitions of EOs 14071 and 14066, blocking sanctions on specific issuers, and blocking sanctions on Russian securities depositories. |
Section 107: Prohibition on investment by U.S. persons in the Russian federation | Codifies, effective 30 days after enactment, the existing prohibitions under EO 14071 on new investment in Russia by U.S. persons, provision of certain identified services, and related facilitation. | There is no change in the substantive scope of what is prohibited. Codification makes any lifting of the prohibition subject to the termination and congressional review provisions of the Act. |
Section 108: Prohibition on energy exports to, and investment in the energy sector of, the Russian federation. | Prohibits, effective 30 days after enactment, any new investment by a U.S. person in the energy sector of the Russian Federation or export, reexport, or transfer of energy or energy products produced in the United States. Provides for the imposition of sanctions on foreign persons determined to knowingly engage in certain activities related to production of energy products for use by sanctioned persons. | The new investment restriction codifies existing prohibitions under EO 14066. Codification makes any lifting of the prohibition subject to the termination and congressional review provisions of the Act. The scope of the export prohibition is not clear, as the terms “energy” and “energy product” are not defined, though there is likely substantial overlap with existing export control restrictions. Most persons that would be sanctionable under this section likely could already be sanctioned under EO 14024, and while the sanctions are purportedly mandatory, they only apply if the President or a delegee determines to impose them, so ultimately the impact will be determined by executive branch implementation. |
Section 109: Prohibition on purchase of Russian sovereign debt by U.S. persons | Effective immediately, prohibits the purchase of Russian sovereign debt by U.S. persons. | This effectively codifies an existing prohibition, as all purchases of Russian sovereign debt have been treated as prohibited “new investment” under EO 14071 since June 2022 (superseding more narrowly tailored restrictions on certain primary and secondary market activity under previously issued directives). Codification makes any lifting of the prohibition subject to the termination and congressional review provisions of the Act. |
Section 110: Sanctions related to international financial messaging services | Provides for imposition of sanctions on providers of financial messaging services determined to be used to circumvent Russia-related sanctions, as well as associated individuals. Sanctions may be waived with respect to providers that are subject to, and compliant with, non-U.S. sanctions regimes that are consistent with U.S. foreign policy interests, or that provide significant financial messaging services to U.S. financial institutions. | Persons that would be sanctionable under this section likely could already be sanctioned under EO 14024, and OFAC has previously warned FFIs that they risk imposition of sanctions if they connect to Russia’s own financial messaging system, SPFS. The waiver provision appears crafted to provide comfort to EU-based providers of financial messaging services, who are subject to EU sanctions obligations in relation to the provision of such services to Russian financial institutions. These sanctions only take effect upon an affirmative designation of the financial messaging system. |
Section 111: Uranium imports and Rosatom sanctions | Directs the President to implement the Prohibiting Russian Uranium Imports Act (2024), which establishes a phase-in schedule for restricting Russian uranium imports. Provides for the imposition of sanctions against persons determined to be associated with Rosatom beginning in 2028. | The restrictions on and eventual prohibition of Russian uranium imports were already provided for in existing law. Most persons that would be sanctionable under this section likely could already be sanctioned under EO 14024, and while the sanctions are purportedly mandatory, they only apply if the President or a delegee determines to impose them, so ultimately the impact will be determined by executive branch implementation. |