The Lindsey O. Graham Sanctioning Russia and Iran Act of 2026

Summary

On September 18, 2026, President Donald J. Trump signed the Lindsey O. Graham Sanctioning Russia and Iran Act of 2026 (the “Graham Act” or the “Act”). The Act had significant congressional support – the House of Representatives approved the Act on September 16, 2026, by a vote of 262–159 (with 58 Democrats joining nearly all Republicans in support) and the Senate passed the Act on August 7, 2026, by a vote of 86–11, with 36 Democrats joining nearly all Republicans. The Act grants the president new authorities to use sanctions, tariffs and other measures to constrain Russia’s profits from energy exports, including the authority to impose tariffs on significant purchasers of Russian-origin crude oil or natural gas and countries facilitating Russian oil-related sanctions evasion and codifies into law and expands upon key economic restrictions on Russia that are currently imposed via Executive Orders of the president of the United States. The Act also extends the Iran Sanctions Act of 1996, which was scheduled to sunset at the end of the year, for five additional years, through 2031. The Act contains various exceptions and waivers that provide the president with significant flexibility in deploying the new authorities provided by the Act.

On September 22, 2026, President Trump stated in an address to the United Nations General Assembly that the Act provides him with “enormous new tariff authorities” and that “if necessary, [he] will have to use them,” although he did not identify any countries, tariff rates, or timetable for doing so.

Tariffs Relating to Russian Energy and Exports

“Secondary” Tariffs on Major Importers of Russian Energy

Section 113 of the Act requires the president, within 30 days of enactment, to increase the duty rate for all goods imported from a covered third country (i.e., other than the Russian Federation) to a rate of up to 100% ad valorem, in addition to other applicable duties. A covered country is one that (i) knowingly made new purchases of Russian-origin crude oil or natural gas, starting 30 days after enactment and was among the five largest importers by total volume of Russian-origin crude oil or natural gas during the 12 months preceding enactment, or (ii) was among the top five countries facilitating Russian oil sanctions evasion during the 12 months prior to enactment. The Act does not specifically require the president to determine which countries satisfy the covered country test under Section 113(c), but Section 113(g)(1) requires the president to submit to the appropriate congressional committees a written justification explaining the substantive rationale for the duty rate and the methodology used to determine that a country is covered. 

The Act also contemplates that the process will be ongoing, directing the U.S. Trade Representative (“USTR”), in consultation with the Secretaries of State and Energy, within 180 days after the initial imposition of duties and every 180 days thereafter, to determine, based on the most recent 12-month period, the five largest importers by total volume of Russian-origin crude oil and the five largest importers by total volume of Russian-origin natural gas, and impose or maintain duties on goods imported from those countries accordingly. The USTR is also directed to modify or adjust the rate if a covered country has taken significant steps to increase or decrease activity in Russian-origin crude oil or natural gas after the initial decision (i.e., between the time that the covered country is first identified and the next applicable refresh period). 

Exemption for Countries Reducing Purchases of Russian Energy

Section 113(d) of the Act establishes a targeted exemption for a country that is otherwise covered based on its Russian natural gas imports if (i) its total Russian-origin natural gas imports during the relevant 12-month period were less than 15% of total annual Russian natural gas exports during that period and (ii) the country has taken “significant steps” to reduce its Russian-origin natural gas imports. According to certain reports, this provision may have been designed to help reduce the exposure of certain European countries to these new authorities, given that they have substantially reduced their reliance on Russian pipeline gas since 2022.[1]

“Primary” Tariffs

The Act also authorizes tariffs on Russian-origin goods: Section 112 requires the president to increase the duty rate for all goods imported from Russia to a rate of up to 500% ad valorem within 30 days of enactment.  Like the “secondary” tariffs, the 500% duty is in addition to other applicable duties, fees, taxes, exactions and charges. 

Codification and Expansion of Russia Sanctions

Subject to applicable exceptions and the presidential waiver authority under Section 115 described below, the Act codifies and, in certain respects, expands the sanctions framework that has developed through a series of executive orders since 2021. Specifically:

• Codification of Russian Harmful Foreign Activities Sanctions. Section 102(d) of the Act codifies Russia-related sanctions and other measures imposed under Executive Orders addressing the specified Russian harmful foreign activities, as those measures existed immediately before enactment of the Act. By codification of these sanctions, they can no longer be terminated solely by Executive Order.
• Ongoing Review of Potential Sanctions Targets Required. Section 102 of the Act imposes a mandatory review cycle—within 30 days of enactment and every 180 days thereafter—requiring the president to review a broad array of persons and vessels, including Russian officials, defense-industrial-base actors, energy-sector leaders, oligarchs, persons engaged in corruption or sanctions evasion activities for or on behalf of the Russian government, and those undermining Ukraine’s territorial integrity. Following that review, the president is required to impose blocking sanctions on covered persons, identify covered vessels as blocked property, and impose visa restrictions on covered aliens. The covered categories are expansive, reaching leaders and principal shareholders with controlling or majority interests in specified Russian energy projects, including the Yamal LNG, Arctic 1/2/3 LNG, and any post-enactment Arctic projects.
• Financial Institutions. Section 103 requires the president, within 30 days of enactment, to impose two or more of the sanctions described in Section 103(d) on the Central Bank of Russia and any subsidiary or successor entity of the Bank. It further requires the imposition of all of the described sanctions in Section 103(d) on Sberbank, VTB Bank, Gazprombank and any other Russian financial institutions owned in whole or in part by the Russian government, as well as their successors and subsidiaries. Section 103 of the Act also mandates sanctions on any foreign financial institution that engages in significant transactions with the Russian bank entities, subject to a discretionary exception if the Secretary of the Treasury determines that such sanctions would not be consistent with U.S. economic or foreign policy interests.

Sanctions under Section 103 include blocking sanctions, two or more of the sanctions listed in Section 235 of the Countering America’s Adversaries Through Sanctions Act (“CAATSA”) of 2017 that are not already imposed,[2] and correspondent and payable-through account restrictions.

• Other Government-Affiliated Entities. Section 104 of the Act requires the president, no later than 30 days after enactment and every 180 days thereafter, to review entities potentially owned or otherwise affiliated with the Russian government and impose blocking sanctions on entities determined to be covered. Its scope includes entities in which the Russian government has a controlling or majority ownership interest, as well as entities otherwise affiliated with that government.
• Shadow Fleet Authority. The Act creates a statutory framework for addressing Russia’s so-called “shadow fleet”—the network of tankers, intermediaries, and insurers that Russia has utilized to facilitate the transport and sale of oil and gas products. Section 102(b)(3)–(7) subjects to review for mandatory sanctions a broad range of vessels and associated persons, including vessels used to transport Russian-origin crude oil, liquefied natural gas, petroleum products, coal, arms, or other goods in circumvention of sanctions; the owners, operators, managers, underwriters, insurers, reinsurers, captains, and senior crew of such vessels; foreign port owners or operators that allow sanctioned vessels to dock or receive services; and persons who receive transfers of property from sanctioned persons after sanctions are imposed or before the imposition of sanctions in an attempt to avoid them. The Act further requires that vessels meeting these criteria be identified as blocked property, meaning that U.S. persons would be prohibited from engaging in any transactions or dealings involving such vessels, and foreign persons may face secondary sanctions risk and/or risk being blocked themselves for engaging in significant transactions involving them. Furthermore, Section 102(c) authorizes the president to treat the fact that the vessel is subject to sanctions imposed by certain identified partners—including the United Kingdom and the European Union—as prima facie evidence of shadow fleet status. This provision may simplify the process through which the executive branch develops sanctions packages, and may promote further alignment among allied sanctions regimes.

Investment Restrictions and Energy Measures

Sections 107 and 108 codify and expand investment, services, and energy-related restrictions imposed under Executive Orders 14066 and 14071 (implemented through 31 C.F.R. Part 587). Specifically:

• Section 107 prohibits, effective 30 days after enactment: (i) new investment in Russia by U.S. persons wherever located; (ii) the export, reexport, sale, or supply from the United States or by U.S. persons of categories of services identified by Treasury to any person in Russia; and (iii) U.S.-person approval, financing, facilitation, or guarantee of foreign-person transactions that would be prohibited if performed by a U.S. person or in the United States.
• Section 108 separately prohibits, effective 30 days after enactment, new U.S.-person investment in the Russian energy sector and the export, reexport, or in-country transfer of U.S.-produced energy or energy products to Russia. It also mandates secondary sanctions against foreign persons knowingly providing support that facilitates the maintenance or expansion of energy production for use by persons sanctioned under Section 102 or 103.

Additional Provisions

The Act imposes additional financial-sector and capital-markets restrictions and other measures through Sections 105, 106, 109, 110, and 111. Specifically:

• Section 105 prohibits U.S. depository institutions and SEC-registered brokers or dealers from processing fund transfers to or from the Russian government or for the benefit of its officials, effective 30 days after enactment, with a narrow exception for licensed transactions.
• Section 106 requires the SEC, within the same 30-day period, to prohibit trading of securities issued by Russian-government-affiliated persons and entities on U.S. national securities exchanges.
• Section 109 prohibits any U.S. person from purchasing Russian sovereign debt upon enactment.
• Section 110 requires recurring reviews and mandates sanctions on global financial messaging entities knowingly used to circumvent Title I sanctions, subject to targeted waivers.
• Section 111 requires the president to implement Russian uranium import restrictions under preexisting legislation.

Waiver, Exceptions, and Termination

The Act includes several key provisions that govern the operation of Title I, which addresses restrictive economic measures against Russia.

Presidential Waiver

Section 115 provides the president with broad waiver authority, permitting a waiver of the application of any sanctions provision with respect to a foreign person, any restriction with respect to a person, or any duty under Title I of the Act, subject to the submission of a written certification to Congress that the waiver is in the U.S. national interest and a report explaining the basis for that certification.[3] Through the waiver process, Section 115 affords the president significant discretion with respect to the Russia-related measures described above, such that the practical effect of the Act will depend in part on whether and how the president exercises this waiver authority.

Exceptions

Section 114 enumerates specific exceptions to the authorized restrictive measures, including exceptions for humanitarian assistance; civilian nuclear cooperation; certain low-enriched uranium imports and medical isotopes; and for existing Treasury general licenses. It also preserves Treasury’s authority to extend or issue new licenses, thereby preserving the Treasury Department’s Office of Foreign Assets Control’s ability to tailor sanctions implementation through licensing.

Termination

The Act’s termination provisions impose meaningful conditions on the president’s ability to lift sanctions imposed thereunder. Section 117 permits the president to terminate a sanction with respect to a foreign person, a restriction with respect to a person, or a duty under Title I of the Act, only upon satisfaction of specified certification requirements and congressional review. For sanctions on Russian persons or Russia itself, the report must certify that Russia has signed a peace agreement accepted by the free and independent government of Ukraine and has ceased all military hostilities and activities to overthrow, dismantle, or subvert Ukraine’s government. For other foreign persons or countries, the president must certify that the person or government has ceased the sanctionable activity and that the president has received reliable assurances against recurrence. Termination is subject to 30 calendar days of congressional review (extended to 60 days for reports submitted during a specified summer period), during which a joint resolution of disapproval may be introduced.

Iran

Section 201 extends the Iran Sanctions Act of 1996 by five years, replacing December 31, 2026 with December 31, 2031 as the Act’s sunset date. Among other things, the Iran Sanctions Act authorizes sanctions against persons engaging in specified activities involving Iran’s petroleum and petrochemical sectors or materially contributing to Iran’s ability to develop weapons of mass destruction or advanced conventional weapons. The extension is not subject to the waiver provisions outlined at Section 115, which are specific to the Act’s Russia-focused measures.

Key Takeaways

• Russia-Ukraine Peace Talks. The Act was adopted despite renewed efforts by the Trump administration to facilitate peace talks between Russia and Ukraine. While Ukraine’s President Zelensky has celebrated the Act, the Kremlin has indicated the Act could harm those peace efforts.
• Implementation Requires Executive Action. The Act provides the president with substantial new authorities—particularly through the tariff authority in Section 113—and broad discretion in the implementation of the authorities, especially given the waiver authority provided under Section 115. The practical impact of the Act will therefore depend largely on how the executive branch opts to implement—or waive—its provisions.
• Tariff Authority. Congressional members of both parties raised particular concerns about the Act’s tariff authority,[4] with House Democrats warning that the authority could be used against U.S. allies.[5] It remains to be seen whether and how the president will use these new authorities, especially with respect to China and India, two of the largest purchasers of Russian oil, with China also the largest purchaser of Iranian oil. Chinese officials criticized the Act before the September 24 meeting between Chinese President Xi and President Trump at the White House.
• Congressional Action and Focus on Energy. The Act is a significant expansion of statutory Russia sanctions. The Act’s focus on tariffs, Russian energy production, and the Russian shadow fleet reflects congressional focus on the importance of oil and gas revenues to Russia’s ability to finance its war against Ukraine.
• Pressure on Purchasers of Russian Oil. The Act appears intended to place pressure on the relatively small number of jurisdictions that continue to purchase significant volumes of Russian oil, similar to the pressure applied to purchasers of Iranian oil in the period preceding the 2015 adoption of the Joint Comprehensive Plan of Action (“JCPOA”).
• Similarities to Prior Statutory Approaches. The Act’s exemption for certain countries that have taken significant steps to reduce imports of Russian natural gas has some similarities to provisions in earlier Iran-related statutes that imposed sanctions relating to purchases of Iranian oil while providing exceptions for foreign financial institutions in countries that had significantly reduced their purchases of Iranian oil.[6] The Act’s codification of certain existing Russia-related sanctions also bears some resemblance to the approach taken in the CAATSA, which codified certain Russia-related sanctions imposed by executive order and established additional sanctions authorities.

S&C is monitoring the Act’s implementation and is available to advise clients on compliance obligations, commercial implications, and risk mitigation. Clients with operations, investments, or counterparty relationships involving Russia or Russian energy trade, and clients importing goods from countries potentially subject to the Act’s tariffs, should assess their exposure and monitor implementing measures, exceptions, licenses, and waivers.