Graham Act Codifies Russia Sanctions, But Presidential Waiver Defers Most Risk

The Lindsey O. Graham Sanctioning Russia and Iran Act of 2026 (P.L. 119-111) (the Graham Act or Act), signed into law by President Donald Trump on September 18, 2026, sought to codify the existing executive order-based Russia sanctions program, mandate new Russia sanctions and create new Russia-related tariff authorities. Although the Act was designed to constrain the revenue that finances Russia's war with Ukraine by imposing mandatory sanctions on Russia's political leadership, financial institutions, energy sector and sanctions evasion networks, and tariffs on the largest purchasers of Russian energy, its immediate impact was blunted by the president's recent waiver of the Act's sanctions and tariff provisions and authorization of trade in Russian-origin diesel.

Sanctions

The Act's key sanctions provisions include the following:

• Codification of Existing Sanctions. The Act codifies the current executive orders underpinning the Russian Harmful Foreign Activities Sanctions Regulations at 31 C.F.R. Part 587 (the RuHSR), limiting the president's ability to revoke them unilaterally. Critically, the RuHSR sanctions were first imposed under the Biden Administration and are distinct from earlier sanctions imposed after Russia's first incursion into Ukraine in 2014, which were codified by the Countering America's Adversaries Through Sanctions Act of 2017 (P.L. 115-44). In that sense, the Graham Act represents a fresh attempt by the U.S. Congress to impose a measure of control over the president's sanctions authority. By codifying many of those measures, the Act was designed to limit the president's ability to unwind the Russia sanctions program through executive action alone.
• New Mandatory Sanctions. The Act also requires the president, within 30 days of enactment and every 180 days thereafter, to review the persons and vessels that meet certain criteria described in the Act, impose blocking and visa sanctions on persons determined to be covered, and identify covered vessels as blocked property. Although the October 16 order waived these requirements, the underlying designation criteria remain and could be applied if and when the waiver is lifted. Although many of these criteria overlap with conduct that is already sanctionable under existing executive orders, the Act broadens the criteria for sanctioning non-U.S. persons and vessels involved in the trade and transport of Russian-origin energy commodities such as crude oil, uranium, natural gas, liquefied natural gas, petroleum and petroleum products, petrochemical products, and coal and coal products. Critically, this includes the imposition of sanctions on foreign vessels that transport such products as well as their owners, operators, crew and those providing related services, including underwriting or insurance. The U.S. may in the future treat sanctions imposed on vessels by the United Kingdom, European Union, Group of 7 or a member of the Five Eyes intelligence alliance as prima facie evidence that a person or vessel has engaged in sanctionable conduct.
• Energy Sector Support. In addition to codifying the U.S.-person prohibition on new investment in Russia's energy sector, the Act seeks to prohibit the export, reexport, or in-country transfer to or in Russia of any U.S.-produced energy or energy product, a restriction that follows the goods regardless of who is dealing in them. Section 108 of the Act also mandates sanctions on any non-U.S. person that knowingly provides goods, services, technology or other support that facilitates the maintenance or expansion of production of covered energy commodities for use by a person sanctioned under Sections 102 or 103. Section 108 is currently waived.
• Exceptions and Authorizations. Section 114 of the Act excludes, among other things, transactions involving agricultural commodities, food, medicine, medical devices and humanitarian assistance; authorized intelligence and law enforcement activities; specified civil nuclear and low-enriched uranium activities; vessel and crew safety and environmental protection related to sanctioned vessels; and oil originating outside Russia that merely transits Russian territory. It also provides a 270-day period for certain wind-down and divestiture activities. Significantly, the Act preserves general licenses issued by the U.S. Department of the Treasury before enactment and the Office of Foreign Assets Control retains authority to amend or issue such licenses.

As a result of the president's October 16 waiver, the Act's near-term sanctions impact is limited. Its significance lies mainly in the authorities it leaves available to this and future administrations, which can reactivate them at any time prior to 2031, when the provisions sunset unless reauthorized by Congress. As such, companies with direct or indirect Russia exposure should continue to comply with existing Russia sanctions and, in parallel, map their counterparties, supply chains and transactions against the Act's criteria so they are prepared if and when the sanctions risks change.

Tariffs

Section 112 of the Act requires the president, within 30 days of enactment, to increase the duty rate on all goods imported into the U.S. from Russia to a rate of up to 500 percent. These duties apply in addition to any other duties, fees, taxes or charges, including antidumping and countervailing duties and duties imposed under Section 301 of the Trade Act of 1974 and Section 232 of the Trade Expansion Act of 1962. The statute sets no minimum rate. These additional duties are currently waived pursuant to the president's executive order.

Section 113 of the Act also includes broader potential commercial implications. It requires the president, within 30 days of enactment, to increase the duty rate on all goods imported from certain third-party countries to a rate of up to 100 percent, again in addition to other applicable duties. Because the duties would apply on a countrywide basis, they would reach all goods from a covered country, whether or not the goods have any connection to Russia. Although these duties are also waived for now, the Act's framework remains relevant if the waivers are lifted. Key features include the following:

• Covered Countries. A country is covered if it either 1) knowingly made new purchases of Russian-origin crude oil or natural gas on or after 30 days after enactment and was among the five largest importers, by volume, of Russian-origin crude oil or natural gas during the 12 months preceding enactment, or 2) was among the top five countries facilitating Russian oil sanctions evasion during that period. A country may be covered under the second test based on the conduct of persons located, operating or organized there, even if its government is not itself involved.
• Natural Gas Exception. Duties based on natural gas purchases do not apply to a country whose imports of Russian-origin natural gas were less than 15 percent of Russia's total natural gas exports during the relevant period and that has taken significant steps to reduce those imports. There is no parallel exception for crude oil.
• Ongoing Determinations and Reporting. Within 180 days after the initial duties and every 180 days thereafter, the Office of the U.S. Trade Representative (USTR) must identify the five largest importers of Russian-origin crude oil and natural gas and (absent a waiver) impose duties on goods from those countries. USTR may also adjust rates to any level above zero and up to 100 percent if a covered country significantly increases or reduces its purchases. At least 10 days before imposing or modifying a duty, the president or USTR must provide Congress written justification explaining the rate and methodology used to identify the country.

The Act and the October 16 executive order do not identify any covered countries, and any future exposure will depend on the data and methodology the administration uses. However, major U.S. trading partners such as China, India and Turkey would likely be included in an identified top five list of Russian energy importers.

Note that USTR is now charged with ongoing monitoring of Russian energy purchases and sanctions evasion, and it will be advising the president on further actions under the Act. Companies that import from major purchasers of Russian energy – such as China and India – should continue to map their supply chains and consider sourcing, pricing and contractual contingencies if the waivers are lifted and tariffs are imposed.

Next Steps

With the October 16 waivers in place, the Graham Act's immediate effect is limited, but its authorities remain available and can be reactivated without new legislation. Holland & Knight is closely monitoring developments and helping clients assess their exposure under existing Russia sanctions, prepare for potential reactivation of the Act's tariff and sanctions provisions, and update compliance programs accordingly. For questions regarding the Act's tariff provisions, please contact Holland & Knight's Tariff Task Force. For questions regarding the Act's sanctions provisions, please contact Holland & Knight's U.S. Export Controls and Sanctions Laws team.

To discuss how the Graham Act may affect your business, please contact the authors.

Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem, and it should not be substituted for legal advice, which relies on a specific factual analysis. Moreover, the laws of each jurisdiction are different and are constantly changing. This information is not intended to create, and receipt of it does not constitute, an attorney-client relationship. If you have specific questions regarding a particular fact situation, we urge you to consult the authors of this publication, your Holland & Knight representative or other competent legal counsel.