The Graham Act: Bipartisan Sanctions and Tariffs Waived

On September 18, 2026, President Trump signed the Lindsey O. Graham Sanctioning Russia and Iran Act of 2026 (the Act) into law. The Act, which passed the Senate 86-11, was designed to sharply increase economic pressure on Russia by codifying existing US sanctions, broadening designation authorities, and authorizing steep new tariffs on Russia and on countries that buy its energy or help it evade sanctions. It also addresses Iran, including by extending the Iran Sanctions Act. 

On October 16, 2026, however, just days before the Act’s key Russia-related provisions were set to take effect, the President issued an executive order waiving the Act’s new tariffs and most of its Russia-related sanctions and restrictions, with no fixed end date. The Act remains in place, but for now, its most consequential measures are suspended. As discussed below, the Act’s reach, the scope of the waiver, and potential responses to both mean that the Act may have an impact over time.

Codifies and Expands Existing Russia Sanctions

The Act effectively codifies long-standing US sanctions on Russia, including the designation of senior Russian officials, oligarchs, banks, and state-owned entities, and prohibitions on new US investment in Russia—specifically in its energy sector—and on US persons purchasing Russian sovereign debt. It also expands those measures. 

Among other things, the Act directs the President to impose sanctions on individuals and entities determined to be involved in Russia’s shadow fleet and on foreign persons who receive property from sanctioned persons; further sanctions on the Central Bank of Russia, Sberbank, VTB, Gazprombank, and foreign financial institutions that engage in significant transactions with them; a bar on US banks and brokers processing transfers to or for the benefit of the Russian government; a prohibition on trading in securities of Russian government-affiliated issuers on US exchanges; energy investment and export restrictions; and sanctions on financial-messaging providers knowingly used to circumvent sanctions.

Stricter Conditions on Terminating Sanctions Under the Act

If sanctions measures are imposed under the Act, those sanctions will remain in place unless and until the President certifies that Russia has signed a peace agreement accepted by Ukraine and ended all hostilities against it. Congress then has 30 days to block the termination of sanctions by joint resolution. 

This is a considerably higher bar than the one set by the Countering America's Adversaries Through Sanctions Act (CAATSA), the 2017 statute that previously codified a range of Russia sanctions. Under CAATSA, the President may lift sanctions on a person by notifying Congress that the person "is not engaging in the activity" on which the sanctions were based "or has taken significant verifiable steps toward stopping the activity," and that the President has received reliable assurances it will not engage in sanctionable activity in the future. In short, CAATSA ties relief to the sanctioned person's own conduct, whereas the Graham Act ties it to the end of the war. Notably, the Act itself applies a CAATSA-style termination standard to non-Russian foreign countries and persons that are sanctioned under the Act, reserving the higher termination bar for Russia alone.

Requires Increased Tariffs on Russia and “Secondary Tariffs” on Its Trading Partners

Section 112 directs that the President “shall,” within 30 days of enactment and “notwithstanding any provision of law,” raise duties on Russian-origin goods by up to 500 percent. Because US imports from Russia are already modest, the more practically consequential measure is Section 113’s “secondary tariffs,” which require the President to impose duties of up to 100 percent on all goods from (1) the top five importers of Russian crude oil or natural gas that continue making new purchases and (2) the top five countries facilitating Russian oil sanctions evasion. Potential targets include China, India, Türkiye, the United Arab Emirates, and Kyrgyzstan. The Office of the US Trade Representative (USTR) must re-identify the top importers every 180 days, making a country’s exposure dynamic rather than fixed.

The Act also grants the President the authority to impose secondary tariffs that the Supreme Court determined did not already exist in US sanctions statutes. In August 2025, for example, the Administration imposed an additional 25 percent tariff on Indian goods in response to India's purchases of Russian oil, relying on the International Emergency Economic Powers Act (IEEPA). In Learning Resources, Inc. v. Trump, the Supreme Court held that IEEPA does not authorize tariffs, reasoning that its power to regulate importation says nothing about tariffs, duties, or the power to tax. The India duty was unwound in early 2026 along with the other IEEPA-based tariffs. The Graham Act does not share that vulnerability; Congress expressly directed the President to "increase the rate of duty" on covered goods, supplying the very authority the Court found missing in IEEPA. As a result, secondary tariffs under the Act would stand on firmer legal ground than their predecessors.

Executive Discretion to Waive Implementation of Sanctions and Tariffs Under the Act

The Act directs that the President "shall" impose the sanctions and tariffs described above. In practice, however, it grants the executive branch considerable discretion. Many obligations apply only after the executive makes a threshold determination, such as identifying the top five importers of Russian oil. Some provisions also contain their own exceptions. For example, the Act allows Treasury to forego sanctions on certain foreign financial institutions when imposing them would conflict with US economic or foreign policy interests. 

The broadest discretion allows the President to waive any sanction, restriction, or duty under the Act by certifying to Congress that the waiver is in the national interest and providing an explanation for that conclusion. 

The President Waives Most Russia-Related Measures Under the Act One Week After Authorizing Russian Diesel Imports

On October 16, 2026, in Executive Order 14436 (the Executive Order), the President waived most of the Act's Russia-related measures and submitted to Congress a written certification that the waivers are in the national interest. The Executive Order waives all duties, meaning none of the new 500 percent or 100 percent tariffs will be imposed. It also waives the majority of the new sanctions and restrictions targeting Russia set out in the Act. These cover, among other things, additional sanctions provided for in the Act on Russian banks, state-owned entities, and the foreign banks that deal with them; additional bans on investment in Russia, purchases of Russian sovereign debt, and transfers to the Russian government; and new measures targeting energy, financial messaging, and Russian uranium. Finally, the order states that it waives the Act's termination provision. 

The order followed the Administration's deal for Russia to supply diesel to the United States under OFAC General License 135 of October 9, 2026, which generally authorizes imports of Russian-origin diesel through April 7, 2027. Without the waiver, the Act would have required tariffs on Russian petroleum products and sanctions on the ships carrying them.

The Executive Order expressly leaves in place the Russia sanctions imposed by prior executive orders and statutes. 

The waivers described in the Executive Order have no fixed end date. The Executive Order states that the waivers will remain in effect until the President or the Secretary of State, in consultation with Treasury and USTR, decides that further action is appropriate. Secretary of State Marco Rubio has suggested the Administration will take 60 days to study the economic effects of imposing the sanctions. In the meantime, USTR is required to monitor countries' purchases of Russian oil and gas and their facilitation of sanctions evasion and alert the President to any circumstance that may warrant revisiting the waivers.

The Executive Order does not address the Act's Iran provisions, which remain in effect. In particular, the Act extends the Iran Sanctions Act of 1996 (ISA), which had been set to expire at the end of this year, through December 31, 2031. The extension does not impose new sanctions, instead preserving the ISA's existing framework of sanctions targeting Iran's energy sector and its pursuit of weapons of mass destruction and advanced conventional weapons.

Response from Congress and Outlook

The White House has defended the waiver as a tool for diplomacy. Enforcing the sanctions now, it said, "would impede ongoing U.S. efforts to negotiate a durable and comprehensive peace agreement between Ukraine and Russia," and the President "retains the ability to exercise these authorities at any time." Congressional criticisms of Presidential waiver of the Act have been bipartisan and swift. Lawmakers have signaled they intend to push back. With the House and Senate in recess until after the November 3 midterm election, however, any meaningful action is unlikely before lawmakers return, whether in the post-election lame duck session or after the new Congress convenes in January. 

Key Considerations

For now, the Act’s new tariffs and most of its new Russia sanctions will not take effect. The waivers can be revisited at any time, however, and the Act’s measures are best viewed as dormant rather than defunct. Companies may consider taking the following precautions:

• Continue to assess compliance with existing Russia sanctions: Existing Russia sanctions under prior executive orders and statutes remain in force, including Executive Order 14066’s prohibitions on importing Russian energy products and on new US investment in Russia’s energy sector, subject to applicable licenses. Companies relying on General License 135, authorizing transactions related to Russian-origin diesel fuel, should note its April 7, 2027, expiration.
• Guard against circumvention risk: The waivers do not soften enforcement of existing Russia sanctions, and enforcement in connection with evasion remains a priority. OFAC has targeted networks such as A7, which used a Kyrgyzstan-based, ruble-backed stablecoin and third-country intermediaries to move funds for Russian interests. Companies should be alert to similar schemes in their payment flows and counterparty relationships. Assistance that amounts to circumvention of sanctions that is provided to a party before it is designated can also expose a company to sanctions risk once that party is designated. Enhanced due diligence on intermediaries in higher-risk jurisdictions remains important.
• Monitor developments on Russia sanctions and tariffs: Track modification or revocation of the waivers, USTR’s monitoring of Russian energy purchases and sanctions evasion, the outcome of the Administration’s review, and congressional action once lawmakers return after the November 2026 election.

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