The Act also extends the Iran Sanctions Act of 1996 for five years, authorizing sanctions related to Iran’s energy and weapons capabilities. This client alert provides an overview of the Act’s key statutory provisions and implications.
Key Takeaways
- The Act codifies several existing U.S. sanctions on Russian government officials, financial institutions, and state-affiliated entities, as well as broad prohibitions on investments in Russia by U.S. persons that previously had been imposed through executive orders. It also requires the President to impose sanctions targeting Russia’s nuclear sector, shadow fleet, foreign ports, and sanctions evasion networks.
- The Act authorizes the President to impose duties of up to 500 percent on imports from Russia and duties of up to 100 percent on imports from countries that continue purchasing Russian-origin oil or natural gas or facilitate evasion of Russian oil sanctions. The duties apply to all goods imported from such countries and would “stack” on top of existing duties and tariffs.
- Exceptions, waiver authorities, wind-down provisions, and termination mechanisms grant the President discretion in implementing the Act’s key restrictions.
- Companies and individuals with business or supply chains involving Russia, Russian-origin energy products, or countries that import oil and gas from Russia, such as China, India, and Türkiye, should evaluate potential exposure to sanctions and tariffs and monitor forthcoming implementation guidance from government agencies.
Sanctions Against Russia and Russian-Linked Persons, Vessels, and Financial Institutions
The Act both preserves and expands the U.S. sanctions framework on Russia. It codifies many sanctions and restrictions previously imposed under executive orders and agency action, establishes mandatory review and reporting requirements, and creates new statutory pathways for targeting Russia’s nuclear sector, shadow fleet, foreign ports, and related maritime service providers. By codifying these measures into a statute, the Act limits the President’s ability to lift or suspend Russia-related sanctions unilaterally by revoking an executive order or changing agency action. The Act requires the President to implement the majority of these measures within 30 days of enactment. While companies with exposure to Russia, including Russian-origin energy products or trade involving its energy or financial sector, likely already may have been evaluating their risk profiles, counterparty relationships, and sanctions compliance posture, the Act reinforces the importance of doing so.
Sanctions Targeting Persons Affiliated With Or Supporting Russia
The Act imposes sanctions on Russian government leaders and officials, Russian government-owned and affiliated entities, persons supporting Russia, and Russia’s shadow fleet. Although many of these persons and entities already are subject to sanctions under existing authorities, the Act makes these sanctions mandatory. The President must review potential targets within 30 days of enactment and every 180 days thereafter.
Russian Government Officials, Oligarchs, and Senior Executives
The Act requires the President to impose sanctions on Russian President Vladimir Putin, Prime Minister Mikhail Mishustin, other Russian cabinet ministers, senior government officials, and military leaders. It also requires the imposition of sanctions on (i) Russian oligarchs who benefit from their ties to the Russian government; (ii) senior executives and principal shareholders of certain Russian Arctic energy projects; and (iii) senior executives of Russian defense contractors and other companies supporting Russia’s military.
Russian Government-Owned and Affiliated Entities
Within 30 days of enactment and every 180 days thereafter, the President must review entities in which the Russian government holds a controlling or majority interest, or with which it is otherwise affiliated, and impose sanctions on such entities.
Foreign Persons Supporting Russia
The Act directs the President to impose sanctions on any foreign person that knowingly engages in certain activities, including:
- Selling or supplying military-use products or other export-restricted items to Russian defense contractors;
- Using deceptive transactions to facilitate the sale of restricted military items and components to Russia;
- Conducting significant transactions with the Russian military;
- Undermining Ukraine’s government, military readiness, democratic institutions, or critical infrastructure;
- Carrying out assassinations, corruption, money laundering, or other crimes on behalf of the Russian government; or
- Using deceptive transactions, including digital currencies, to evade U.S. sanctions.
Targeting Russia’s Shadow Fleet, Operators, and Foreign Ports and Vessels
The Act requires the imposition of sanctions on any foreign vessel that the President determines is used by the Russian government or Russian persons to move crude oil, uranium, natural gas, liquefied natural gas, petroleum, petroleum products, petrochemical products, coal, coal products (collectively “Energy Products”), arms, or other goods to circumvent sanctions imposed by the United States or other countries, including any vessel that:
- Exhibits or engages in unsafe or nonstandard maritime practices;
- Lacks adequate maritime insurance; or
- Evades compliance with the U.S. or international price cap on Russian-origin oil and petroleum products.
Additional sanctions will apply to any foreign person that the President determines knowingly:
- Owns, operates, or manages a covered vessel;
- Provides underwriting services or insurance or reinsurance necessary for such a vessel;
- Serves as a captain or senior leadership of the crew of such a vessel; or
- Transfers to Russia, or provides for use of by a Russian person, any vessel designed for the transportation of Energy Products.
The President must also impose sanctions on:
- Foreign Vessels. Any foreign vessel that the President determines knowingly transports Russian-origin Energy Products, engages in ship-to-ship transfers involving Russian-origin Energy Products with a vessel that is subject to U.S. sanctions, or provides services to such vessels.
- Foreign Port Operators. Any foreign person who is the owner or operator of a foreign port that allows a vessel subject to U.S. sanctions for supporting Russia to port or otherwise receive services.
In determining whether a foreign vessel is being used by the Russian government or Russian persons to move Energy Products to circumvent sanctions, the President may treat sanctions imposed by the United Kingdom, European Union, G7, or Five Eyes partners (i.e., the United States, the United Kingdom, Australia, Canada, and New Zealand) as prima facie evidence to support a new designation.
Acting on Behalf of Sanctioned Persons
The Act also directs the President to impose sanctions on a foreign person acting on behalf of a sanctioned person described above if the sanctioned person transferred property or an interest in property to that person after designation, or transferred it before designation in an attempt to evade sanctions.
Uranium Import Prohibition And Sanctions
The Act directs the President to “take all necessary steps” to implement the 2024 Prohibiting Russian Uranium Imports Act (“Russian Uranium Imports Act”), which prohibits the importation of uranium from Russia, including from Rosatom, Russia’s state-owned nuclear energy corporation, and its subsidiaries. Although the Russian Uranium Imports Act is in effect, it has been subject to an active U.S. Department of Energy waiver process since May 24, 2024. The Act directs the President to implement the Russian Uranium Imports Act within this broader statutory framework. Separately, the President must impose property blocking and visa ineligibility sanctions on Rosatom’s leaders and officers, and its subsidiaries.
Financial Restrictions
The Act imposes a series of financial restrictions targeting Russian financial institutions, fund transfers, securities markets, and sovereign debt. Many of these provisions codify existing restrictions, but their enactment into statute constrains the President’s ability to relax them.
Transfers of Funds Involving the Russian Government
In addition, the Act prohibits U.S. depository institutions and broker-dealers from processing any fund transfers to or from the Russian government, including any entity owned by the Russian government, or for the direct or indirect benefit of Russian officials. The prohibition does not apply to transfers authorized by a general or specific license issued by the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”).
Russian Financial Institutions
The Act codifies existing sanctions on Russia’s Central Bank, Sberbank, VTB Bank, and Gazprombank and requires the President to impose sanctions on any other Russian financial institutions, and any leaders and officials connected to such institutions. The Act also mandates sanctions on foreign financial institutions that engage in significant transactions with such entities, unless the Secretary of Treasury determines that imposing such sanctions is not consistent with the economic or foreign policy interests of the United States. The President must review and impose sanctions on such persons within 210 days of enactment and every 180 days thereafter.
Securities Exchanges and Financial Messaging
The Act directs the U.S. Securities and Exchange Commission (“SEC”) to prohibit the listing or trading of Russian government-affiliated issuers on any U.S. national securities exchange.
Separately, the President must sanction persons and entities that provide financial messaging services used to circumvent sanctions on Russian financial institutions. However, the President may waive such sanctions for entities that are subject to a compatible foreign sanctions regime or provide significant services to U.S. financial institutions.
U.S. Investments in Russia
The Act codifies existing prohibitions on new U.S. investment in Russia, certain facilitation and financing activities, specified services provided to persons in Russia, new investment in Russia’s energy sector, and dealings involving Russian sovereign debt. Importantly, the Act requires sanctions to be imposed on any foreign person that knowingly sells, supplies, or otherwise supports the maintenance or expansion of Russian energy production for use by sanctioned persons, extending the Act’s reach to third-country suppliers and services providers. The Act also prohibits U.S. persons, including U.S. financial institutions, from purchasing sovereign debt of the Russian government. These measures largely mirror existing restrictions previously imposed on U.S. investment in Russia that primarily rested on executive actions pursuant to the International Emergency Economic Powers Act, including under Executive Orders 14066, 14068, and 14071, and related OFAC directives and determinations. The Act requires the President to impose these sanctions within 30 days of enactment.
New Tariffs on Russia and “Secondary Tariffs” on Third Countries
The Act grants the President new tariff authority and provides for the imposition of tariffs on Russia and certain third countries that purchase Russian oil or natural gas within 30 days of enactment.
The President “shall” impose duties of up to 500 percent ad valorem on all goods imported from Russia. The Act also mandates “secondary tariffs” on countries with certain ties to Russia. But for the exceptions discussed below, the President “shall” impose duties of up to 100 percent ad valorem on imports from a foreign country that either:
- knowingly made new purchases of Russian-origin crude oil or natural gas within 30 days after enactment of the Act (i.e., within 30 days after September 18) after having been among the five largest importers of Russian-origin crude oil or natural gas during the 12-month period preceding enactment, or
- during the 12-month period preceding enactment was among the top five “countries facilitating Russian oil sanctions evasion.”
Initial reporting indicates that China, India, and Türkiye likely comprise the top purchasers of Russian oil; however, the statute requires formal determinations based on import volumes and sanctions evasion criteria.
For the secondary tariffs, the President or United States Trade Representative (“USTR”) must report to relevant congressional committees the justification for any duties imposed and the methodology used to determine whether a country meets the statutory criteria. Within 180 days of the initial imposition of duties and every 180 days thereafter, the USTR also must determine (based on the most recent 12-month period preceding the determination) the countries that are the five largest importers of Russian-origin oil and gas during that updated 12-month period and apply duties on imports from those countries. The USTR may adjust duty rates if a country’s Russian energy purchases or sanctions evasion activities change, subject to Congressional reporting requirements.
All duties imposed under the Act are in addition to “any other duty, fee, tax, exaction, or charge,” including those imposed under the Tariff Act of 1930; Sections 122, 201, or 301 of the Trade Act of 1974; and Section 232 of the Trade Expansion Act of 1962. (emphasis added). In other words, the duties will “stack” on top of other tariffs.
Notably, the Act provides a narrow exception with respect to secondary tariffs: a country identified as a top purchaser of Russian natural gas may be exempt from these duties if, during the 12 months preceding enactment of the Act, its total imports of Russian-origin natural gas represented less than 15 percent of Russia’s total annual natural gas exports and the country has taken “significant steps” to reduce such imports. Critically, this exception does not apply to crude oil importers or to countries identified as sanctions evasion facilitators. Moreover, because the Act does not define “significant steps,” the Administration retains discretion in determining whether a country qualifies for the exception.
Exceptions, Waivers, and Termination of Tariffs and Sanctions
Although the Act requires the President to take certain sanctions and tariff action, it preserves substantial executive discretion over how these actions will operate in practice. Broad exceptions, waivers, and termination mechanisms grant the President discretion to determine the timing, targets, and duration of many sanctions, tariffs, and other restrictions.
Wind-Down Period
The Act provides for a 270-day wind-down period permitting non-Russian entities to divest holdings, terminate contracts, and otherwise come into compliance with the law’s requirements.
Waivers, Exceptions, And Termination
The Act provides several exceptions to the sanctions, duties, and other restrictions imposed, including for various official governmental and humanitarian activities and activities authorized by pre-existing OFAC general licenses.
In addition, the President may waive any sanction, duty, or restriction imposed or required under the Act upon submission of a written certification to Congress that the waiver is “in the national interests of the United States.” The certification must contain a report documenting the rationale.
Furthermore, the President may terminate any sanction, duty, or restriction imposed on Russia or a Russian person upon certifying to Congress that Russia and Ukraine reached a peace agreement and Russia has ceased military hostilities and activities to undermine the Government of Ukraine. The President may terminate any non-Russian sanction, duty, or restriction upon submitting a written report to Congress that the person or country ceased engaging in the activity that justified the action and the President received “reliable assurances” that the party will not knowingly engage in prohibited activities.
The termination generally may not take effect for 30 days following submission of the required report to Congress and may be blocked if Congress enacts a joint resolution of disapproval.#footnote2##
Sunset Provision
Other than with respect to the Iran Sanctions Act extension, the Act terminates five years after enactment (i.e., September 18, 2031).
Other Actions
In addition to the expanded sanctions and tariff authorities, the Act extends the Iran Sanctions Act of 1996, which authorizes sanctions on firms investing in Iran’s petroleum sector or exporting items that could enhance Iran’s weapons or energy capabilities, for another five years. The Iran Sanctions Act of 1996 was most recently extended by ten years in 2016.
Key Considerations
- Codification increases durability. Many of the Act’s sanctions cover persons, financial institutions, investments, and activities already subject to restrictions under existing executive authorities. Their codification is nevertheless significant because it limits the President’s ability to remove or materially relax those measures unilaterally. Waiver and termination remain possible, but only through the Act’s specified procedures, including findings and reporting to Congress.
- Nuclear-sector companies should reassess Russia-related exposure. The Act specifically targets Russian uranium and Rosatom’s leadership, officers, and covered subsidiaries. Nuclear utilities, developers, fuel-cycle participants, equipment and technology suppliers, financial institutions, insurers, and project sponsors should review direct and indirect Rosatom touchpoints, ownership interests, uranium origin, contractual dependencies, payment routes, and available licensing or wind-down provisions.
- Maritime operators face heightened shadow-fleet and circumvention risk. The Act creates statutory exposure for covered vessels and for persons that own, operate, manage, insure, reinsure, crew, service, or transfer them, as well as port operators that admit sanctioned vessels or provide services. Shipowners, charterers, insurers, reinsurers, brokers, classification societies, terminal and port operators, bunkering providers, and other maritime service providers should strengthen vessel, ownership, flag, insurance, voyage, cargo-origin, price-cap, and port-call diligence.
- Supply-chain exposure extends beyond direct Russia business. Companies with sourcing, manufacturing, distribution, logistics, financing, or customer links to major importers of Russian oil—particularly China and India—should assess whether counterparties, payment channels, vessels, ports, or upstream suppliers may be involved in Russian energy purchases or sanctions evasion. Secondary tariff country determinations under the Act could also expose broad categories of imports from affected jurisdictions to additional duties.
- Tariff exposure may be substantial. Duties under the Act may apply to all imports from a covered country, rather than only to energy products, and would be added to existing tariffs and trade remedies. Importers should monitor USTR determinations and model the potential cumulative effect of duties imposed under the Act together with existing and potential future duties and tariffs (including under Section 301, Section 232, and antidumping and countervailing duty orders).
- The Act may become a broader trade-policy tool. Although the Act limits secondary tariffs to countries that satisfy specified statutory criteria, it gives the Administration meaningful discretion in implementing those tariffs. USTR must reassess relevant countries approximately every six months and, subject to reporting to Congress, may adjust tariff rates between 0 and 100 percent. Given the President’s use of tariffs to accomplish key priorities, the Administration may view the Act as a useful authority to pursue its trade policy objectives. Clients should therefore monitor not only Russian-energy trade and sanctions-evasion developments, but also broader Administration trade priorities that could influence how the Act is implemented.
- Implementation will shape the Act’s broader impact. Taken together, the codification of existing restrictions and the new nuclear, maritime, financial, anti-circumvention, and tariff measures signal renewed congressional and executive commitment to a broad Russia pressure campaign. Companies should monitor implementing guidance from OFAC, USTR, and SEC, secondary tariff country determinations, designations, general licenses, waivers, and agency reporting, as these actions will determine the timing and practical scope of the Act’s restrictions. Companies also should revisit Russia-related risk assessments, contractual protections, escalation protocols, and transaction monitoring in anticipation of additional designations and heightened scrutiny of third-country conduct.
K&S’s International Trade team will continue closely to monitor the Administration’s implementation of the sanctions, duties, and other actions under the Act. We have extensive experience advising companies on compliance with the evolving sanctions and tariff landscape. Please contact our team with questions or to discuss next steps.
