More than 80 US Senators Sponsor New Russia Sanctions Bill

Overview

In April 2025, members of the United States Senate introduced a bipartisan legislative proposal that could significantly reshape the global sanctions landscape, imposing stiff sanctions on Russia, along with crippling secondary tariffs on any country purchasing Russian energy. The Sanctioning Russia Act of 2025 (S.1241)¹, spearheaded by Senators Lindsey Graham and Richard Blumenthal, is garnering bipartisan support to intensify economic and diplomatic pressure on Russia in response to its recent acts of aggression against Ukraine. The bill has attracted support from over 80 Republican and Democratic senators, and represents one of the most expansive sanctions frameworks proposed since the onset of Russia’s invasion of Ukraine in February 2022. The bill aims not only to penalize Russia for its continued aggression but also to deter third-party countries and entities from enabling the country’s wartime economy.

The legislation’s prospects for enactment are highly uncertain, and the future of US-Russia sanctions will likely be determined by the trajectory of negotiations surrounding the Russian invasion of Ukraine; its proposed provisions nonetheless provide insight into potential US sanctions escalation options in the event of a further deterioration in US-Russia relations.

Targeted Sectors

The proposed legislation targets Russia’s financial system, state-owned enterprises, and military infrastructure. It mandates asset freezes and transaction bans on senior Russian officials, military personnel, oligarchs, and others supporting the war effort. Major financial institutions including the Central Bank of Russia, Sberbank, and Gazprombank are sanctioned, while U.S. institutions are barred from processing transactions with Russia or facilitating the listing of Russian securities on U.S. stock exchanges.

Additionally, the bill prohibits U.S. exports of energy products to Russia and bans American investments in the Russian energy sector. It imposes secondary sanctions on foreign companies aiding Russian energy production, including oil, gas, and uranium. Section 14 also specifically bans uranium imports from Russia and its affiliates, extending the restriction to third-party countries involved in the trade. This extraterritorial reach mirrors previous U.S. sanctions regimes, such as those imposed on Iran, and aims to close existing loopholes that have enabled Russia to sustain its wartime economy through non-Western financial systems.

Proposed 500% Tariffs

The bill’s most aggressive provisions introduce sweeping trade restrictions through substantial tariffs. Section 15 imposes a 500% tariff on all Russian-origin goods and services, including energy products, in addition to any existing tariffs. Section 17 extends these measures by applying secondary tariffs to countries that knowingly sell, supply, transfer, or purchase Russian-origin oil, natural gas, uranium, petroleum products, or petrochemicals. A 500% tariff would also be levied on all goods and services imported into the United States from such countries.

These measures are explicitly intended to erode Russia’s energy export revenues, a vital source of funding for its military operations. The bill also aims to pressure major energy consumers, particularly China and India, to reduce their dependence on Russian energy commodities.

Framework of S.1241

The bill is grounded in a conditional framework to encourage Russia to cooperate in peace agreement negotiations. If implemented, sanctions would be triggered pursuant to a presidential determination if Russia refuses to engage in good-faith negotiations toward a peace agreement, violates the terms of any such peace agreement, or initiates a new invasion of Ukrainian territory. If implemented, such a stance would represent a dramatic shift in the US perspective on how to implement economic pressure on Russia.

Potential Shift in the Trump Administration’s Posture on Russia

Recent remarks by President Trump suggest a potential shift in the administration’s posture toward Russia. In late May, following reports of intensified Russian drone attacks on Ukrainian cities, the President stated that he was “absolutely” considering new sanctions against Moscow.² These comments, made in the context of growing frustration with Russia’s unwillingness to engage in substantive peace negotiations to end the conflict in Ukraine, indicate a potential alignment between the executive branch and the Senate’s legislative push.

While Trump Administration had previously emphasized diplomatic engagement and ceasefire negotiations, the President’s recent tone reflects a growing willingness to escalate economic pressure in response to continued Russian hostilities. However, we note that the Trump administration’s position on Russia remains uncertain at this time, and we are unable to opine on whether the bill will pass or whether the administration is prepared to implement its provisions.

Potential Business Impact

While the legislation’s prospects for enactment are highly uncertain, there are numerous potential business impacts for companies to consider.

First, the proposed legislation introduces substantial compliance obligations for entities with international operations, particularly those in the financial and energy sectors. Foreign businesses that maintain relationships with Russian financial institutions may be subject to secondary sanctions, including potential exclusion from the U.S. financial system, if the bill is passed. As a result, such entities would need to undertake enhanced due diligence to ensure adherence.

Second, the proposed legislation also compels a comprehensive reassessment of supply chain dependencies, particularly for entities sourcing extractive resources of Russian origin, including crude oil, natural gas, and uranium. To mitigate the risk of exposure to punitive measures under Section 17, which imposes a 500% tariff on goods and services originating from countries that engage in trade involving Russian-origin energy commodities, companies will have to evaluate and, where necessary, potentially diversify their sourcing arrangements. We further note that Section 17(d) of the bill grants the President limited discretionary authority to exempt specific countries, goods, or services from the tariff provisions of Section 17, provided such exemption is determined to be in the national security interest of the United States. This waiver authority, however, is narrowly circumscribed and may be exercised only once per country, good, or service. As drafted, the duration of any such exemption shall not exceed 180 days.

Third, the bill also mandates the enforcement of existing sanctions provisions under the Countering America’s Adversaries Through Sanctions Act, which have previously been subject to discretionary implementation. Accordingly, companies should be generally prepared for rapid regulatory developments and the possibility of increased enforcement activity across multiple dimensions of the proposed legislation.

***

We will continue to monitor developments in this area and encourage you to subscribe to be kept informed of the latest updates. Please contact the authors or your usual Herbert Smith Freehills contacts for more information.