The Lindsey O. Graham Sanctioning Russia and Iran Act of 2026 becomes law: an overview of the new US sanctions and tariff framework

On September 18, 2026, United States President Donald Trump signed into law the Lindsey O. Graham Sanctioning Russia and Iran Act of 2026 (the Act).

The Act, which follows years of conflict in Ukraine and fresh conflict in Iran, adds new sanctions and tariffs targeting Russia, as well as individuals, entities, and foreign countries that engage with certain aspects of, and persons within, the Russian economy, codifies existing authorities previously exercised by executive order, and extends existing sanctions against Iran.¹

The Act, named in honor of the late United States Senator Lindsey Graham, imposes new measures targeting Russian government officials, financial institutions, and the energy sector, and broadens the scope of existing sanctions by extending secondary sanctions exposure to foreign entities and individuals that engage in activities supporting Russia’s military, energy, and financial sectors.

In addition, the Act creates new tariff authorities targeting engagement with the Russian economy and extends the sunset date for the Iran Sanctions Act of 1996, ensuring Iranian sanctions related to the Iranian energy sector and Iran’s development of weapons of mass destruction remain in effect until 2031.²

The Act expands upon, and codifies portions of, an existing US sanctions framework targeting Russia that includes blocking and non-blocking sanctions across several sectors of the Russian economy, including the financial services and military-industrial sectors.

These provisions will likely increase pressure on Russia and Iran, creating new compliance concerns and legal pitfalls for companies operating within Russia and Iran’s economic orbit.

Blocking sanctions for Russian government officials and Russian persons operating in certain sectors

The Act directs the President to impose blocking sanctions on a range of senior Russian government and military officials and entities, including the Russian president and other specified ministers and military commanders, and to determine whether other Russian government officials should also be designated. The President is further directed to impose blocking sanctions on individuals or entities whom the President has determined among other things:

• knowingly provide, or facilitate the provision of, certain goods and services related to the Russian defense industrial base or certain aspects of the Russian energy sector;
• knowingly conduct significant transactions with the Russian military;
• are officials, senior executive officers, members of the board, or majority shareholders (among others) in entities operating in the Russian defense industrial, energy, or transportation sector in support of the Russian military;
• certain Russian oligarchs who, for example, do not demonstrably oppose the war in Ukraine; or
• engage in specified activities that materially undermine Ukraine, its government, military or infrastructure.

Separately, the Act directs the imposition of new sanctions against Russia’s so-called “shadow fleet” of foreign vessels used by the Russian government or Russian persons to transport goods in circumvention of existing US sanctions. The target of this sanctions authority extends beyond the vessels themselves to, for instance, any foreign person the President has determined:

• owns, operates, or manages such a vessel;
• serves as a captain of the vessel;
• provides underwriting, insurance, or reinsurance services for the vessel; or
• transfers vessels designed for the transportation of energy products to the Russian Federation or permits the Russian Federation to use such vessels.  

The President may also designate any vessel that transports certain Russian-origin energy products, and any person that allows sanctioned vessels to port at a foreign port they own or operate.

Measures targeting the Russian financial sector and Russian-owned or controlled entities

The Act also codifies and expands existing sanctions on the Central Bank of Russia and certain specified Russian financial institutions, including Gazprombank and VTB Bank.

It further directs the President to impose sanctions on any financial institution the President determines is organized under the laws of Russia and owned in whole or in part by the Russian government, as well as on foreign financial institutions that knowingly engage in significant financial transactions with any Russian financial institution and their subsidiary or successor institutions that have been designated pursuant to the Act.

The provision extends to leaders, officials, senior executive officers, directors, and controlling shareholders of the designated Russian financial institutions.

The President may also impose sanctions on any entity in which the Russian government has a controlling or majority ownership interest, or even which is merely determined to be otherwise affiliated with the Russian government.

Further, the President, in coordination with the Secretaries of State and Treasury may designate entities they determine are engaged in the business of providing global financial messaging services and are knowingly being used to circumvent sanctions on Russian financial institutions imposed under the Act. This measure is subject to a limited presidential waiver (for instance, where the entity provides significant financial messaging services to US financial institutions) and complements the coordinated US-EU effort that resulted in the European Union prohibiting the provision of SWIFT messaging services to certain Russian banks beginning in 2022.

Restrictions on investment in Russia

Purchases of Russian sovereign debt, the listing or trading of Russian entities on United States securities exchanges, and investments in Russia by US persons are all prohibited, as are any new investments in the Russian energy sector, as well as the export, reexport, or transfer to or in Russia of any US-origin energy product.

New tariff and secondary tariff authority

Separate from the Act’s sanctions provisions, the Act introduces new tariff mandates and authorities, which the President is responsible for implementing no later than 30 days after the enactment of the Act. In particular, the Act calls for:

• Tariffs on Russian-origin goods: The Act directs the President to impose additional duties on Russian-origin goods, with rates of up to 500% ad valorem.
• Secondary tariffs: The Act calls for the imposition of tariffs of up to 100% ad valorem on all imports from countries that (1) unless a specified exception applies, were among the top five importers (by volume) of either Russian crude oil³ or natural gas⁴ in the 12 months preceding enactment of this Act and that knowingly make new purchases of Russian oil and gas, or (2) were in the top five countries facilitating Russian oil sanctions evasion in the 12 months preceding enactment of this Act.

All duties imposed under the Act are in addition to any duty, fee, tax, exaction, or charge applicable to a given good.

These new tariffs potentially could apply to a wide range of countries, including China, India, France, Spain, Turkey, and others, based on reported 2025 purchase volumes of Russian crude oil or Russian natural gas. Despite significant recent import reductions, the EU as a whole also remains a significant importer of Russian LNG and pipeline gas.⁵

Countries with demonstrated reductions in Russian natural gas imports, such as those in the EU where a ban on Russian gas purchases currently being phased in, may be able to avoid the new tariffs.

The new rules exempt from secondary tariffs imports of Russian natural gas (but not crude oil) by countries that are (1) not among the top five countries facilitating Russian oil sanctions evasion as noted above, (2) have total imports of Russian-origin natural gas that amount to less than 15% of Russia’s total exports of natural gas in the last year, and (3) have taken steps to reduce imports of such natural gas products.

Further, the Act gives discretion to the US Trade Representative to make adjustments to secondary tariffs (though duties must remain greater than zero and no more than 100%) upon a written determination delivered to relevant congressional committees that the country subject to the duties has taken significant steps to either increase or decrease imports of Russian oil and gas.

Presidential waiver authority and humanitarian exceptions

The Act’s provisions reserve substantial executive branch discretion. For example, the Act permits the President to decline to impose sanctions on foreign financial institutions that engage in significant transactions with a Russian financial institution designated pursuant to the Act if the President determines doing so would not be consistent with the economic or foreign policy interests of the US.

In addition to the executive latitude noted above, the President is also permitted to waive any sanctions provision or restriction with respect to a foreign person. The same is true of tariffs, where the President is permitted to waive duties upon determining that such waiver is “in the national interests of the United States.”

The Act clarifies that the sanctions and prohibitions under this Act do not apply to the conduct or facilitation of transactions to provide agricultural commodities, food, medicine, medical devices, or humanitarian assistance, or for transactions necessary for or related to those transactions. This exception specifically applies to the provision of agricultural commodities, food, medicine, or medical devices to Ukraine under internationally recognized agreements with the Ukrainian government.

Winddown period

The Act provides an additional exception for winddown operations occurring within 270 days from the enactment of the Act. Specifically, it excepts activities related to the winddown and divestiture of operations in the Russian Federation by entities located in Russia but not owned or controlled by a Russian person as well as entities located in Russia but owned or controlled by a US person who engages in good faith efforts to winddown or divest operations in Russia.

Given the September 18, 2026, enactment date, such winddown operations will be permitted until June 15, 2027.

Extension of the Iran Sanctions Act 

The Act also extends the Iran Sanctions Act of 1996 (formerly the “Iran and Libya Sanctions Act of 1996”), which imposes economic sanctions on individuals and entities determined to have invested in the Iranian petroleum, petrochemical, and natural gas sectors, participated in the transportation of crude oil from Iran, or contributed, by the provision of goods, services, and technologies, to the development in Iran of weapons of mass destruction.⁶

These sanctions, which aim to deter Iran from the proliferation of weapons of mass destruction and acts of international terrorism, were set to expire at the end of this year. They have now been extended until December 31, 2031, marking the fourth time the sanctions package has been extended.

Key takeaways

This Act presents a few takeaways for companies and individuals operating in and around the Russian economy:

• The Act extends the focus of Russia-related sanctions and tariffs well beyond the Russian border to target other foreign jurisdictions, financial institutions, individuals, and businesses that participate in or support certain sectors of the Russian economy.
• These measures are intended to further isolate Russia from international financial markets and make it increasingly difficult for Russian financial institutions to access the global financial system.
• The practical effect of certain financial sector sanctions under this Act, however, remains unclear as some entities sanctioned under the Act are already subject to heavy US sanctions. VTB Bank, for instance, is among the financial institutions specifically sanctioned under the new law. OFAC, however, recently announced a third round of sanctions against VTB Bank, and remarked that “VTB [Bank] is now among the most comprehensively sanctioned financial institutions in the world.”⁷
• Further, the executive flexibility afforded to the President creates some uncertainty as to how aggressively the Act will be implemented in practice. Given this uncertainty, companies wishing to participate in or around the Russian economy may wish to monitor developments closely, including additional guidance from OFAC or other regulatory bodies and new designations, tariff rate determinations, and waivers made under the authorities the Act creates.
• Companies may also wish to review their own compliance frameworks and policies to ensure they are aligned with the new legislation and to ensure enhanced due diligence and sanctions screening processes are in place.
• The new secondary tariff authority may also become a significant source of leverage for the United States in bilateral negotiations with countries who have historically traded in or relied on Russian crude oil or natural gas (including LNG). Because the Act permits tariff rates to be set between greater than zero and 100 percent and authorizes national interest waivers by the President, the Administration may leverage these tariffs when seeking commitments regarding not just Russian energy purchases, but potentially other unrelated trade or foreign policy objectives.
• Non-US companies should be aware that, in addition to exposing themselves to secondary sanctions or other enforcement activity, their activities may contribute to their home or operating jurisdiction becoming subject to the secondary tariff regime if they knowingly participate in transactions or services that circumvent Russian oil sanctions, including by supporting the purchase, loading, shipment, financing, or insurance of sanctioned Russian-origin crude oil or natural gas or otherwise engaging in activities involving shadow-fleet vessels.
• Entities seeking to rely on the Act's winddown exception should be aware that the 270-day winddown period expires on June 15, 2027.

We will continue to monitor developments and expect to publish additional insights on this topic as the President takes action pursuant to the sanctions and tariff authorities established by this Act.

¹ The White House, Congressional Bill H.R. 5334 Signed into Law (Sept. 18, 2026), https://www.whitehouse.gov/briefings-statements/2026/09/congressional-bill-h-r-5334-signed-into-law/.
² H.R. 5334, 119^th Cong., The Lindsey O. Graham Sanctioning Russia and Iran Act of 2026, (2026) https://www.congress.gov/119/bills/hr5334/BILLS-119hr5334enr.pdf.
³ Crude oil is defined as the substance described in US Harmonized System code 2709.
⁴ Natural gas is the substance described in US Harmonized System code 2711, which includes both liquefied (LNG, propane, etc.) and gaseous formulations of petroleum gases.
⁵ Source: Centre for Research on Energy and Clean Air (https://energyandcleanair.org/december-2025-monthly-analysis-of-russian-fossil-fuel-exports-and-sanctions/). Note, this source describes imports by revenue level.  
⁶ Iran Sanctions Act of 1996, Pub. L. No. 104-172, 110 Stat. 1541, https://ofac.treasury.gov/system/files/126/isa_1996.pdf.
⁷ US Dep’t of the Treasury, Operation Economic Outcast Sanctions Major Bank Helping Iran Evade Sanctions (Sept. 14, 2026), https://home.treasury.gov/news/press-releases/sb0629.