Key Points

• A bipartisan Senate bill would impose mandatory sanctions on Russian officials, financial institutions, energy sector and shadow fleet.
• If enacted, the Lindsey Graham Sanctioning Russia Act would grant presidential authority to levy up to 500% tariffs on Russian imports and up to 100% tariffs on goods from top five purchasers of Russian crude oil and natural gas, including China and India.
• The law could create supply chain and transshipment risks for importers sourcing from India, China and other countries.

With its passage of the Lindsey O. Graham Sanctioning Russia Act of 2026, the Senate is setting out to do two things.

First, the bill would codify into law mandatory sanctions on various Russian entities, including political leadership, financial institutions and energy infrastructure. Second, and more controversially, it would grant the president new tariff authority requiring duties of up to 100% on all goods imported from the top five purchasers of Russian energy.

The bill passed by a vote of 86–11 on August 7, 2026, and now heads to the House of Representatives. The tariff provisions, in particular, have drawn opposition from some lawmakers who view them as an expansive grant of presidential trade authority.

Sanctions

The bill mandates sanctions within 30 days of enactment on several senior Russian officials, financial institutions, and other entities.

It also:

• Targets Russia’s “shadow fleet” of reflagged tankers used to evade energy export restrictions.
• Bars U.S. persons from purchasing Russian sovereign debt or investing in Russia's energy sector.
• Prohibits U.S. depository institutions from processing fund transfers involving the Russian government.

Tariffs

Viewed as the bill's strongest provision, the tariff authority has also generated the most friction in Congress. Within 30 days of enactment, the president must increase the tariff rate on all goods imported from Russia up to 500%.

Generating controversy is the bill’s requirement that the president also increase tariffs of up to 100% on all goods imported from any country that is among the top five purchasers of Russian crude oil or natural gas by volume in the most recent 12-month period, or among the top five facilitators of Russian oil sanctions evasion in the same period.

According to reports, the current top five crude oil purchasers include China and India. Top natural gas importers include China, Japan and a few countries in the European Union.

The bill includes some notable exceptions. Countries whose Russian natural gas imports account for less than 15% of Russia’s total natural gas exports are exempt, provided they are taking “significant steps” to reduce those imports — a carve-out apparently designed to protect Japan and the European Union. The U.S. Trade Representative must reassess the top five purchasers every 180 days and may adjust tariff rates as a result of its assessment. Tariffs also cannot be “stacked,” meaning that a duty imposed on a good that is subject to other tariffs would not face more than the 100% rate in the bill.

Transshipment and Ripple Effects

If enacted, the law would have implications beyond the directly targeted countries. Countries that have imported significant quantities of Russian-originating oil through intermediary countries, such as India, may face supply chain disruption.

Under trade rules of origin, Russian crude oil refined in a third country can receive a new tariff code and be legally deemed to “originate” in the refining country rather than Russia, exploiting a “substantially transformed” exception.

For example, if India faces up to 100% tariffs under the bill, that could disrupt these refining flows and affect the price and availability of fuel that importers currently source from Indian refineries. We recently wrote about related transshipment and country-of-origin enforcement risks here.

What Companies Should Do Now

Even before potential House passage, companies can proactively evaluate their potential exposure:

• Importers sourcing from targets, such as China and India, should model the cost impact of tariffs up to 100% and assess alternative sourcing.
• Companies with Russian-origin supply chain exposure should review whether their products or inputs pass through intermediary refining countries that may face new tariffs.

The bill includes a presidential national interest waiver of any sanctions or tariffs, as well as humanitarian exceptions, including for agricultural commodities, food, medicine and medical devices.

Fox Rothschild is monitoring these developments. Our International Trade team can help companies assess tariff risk, supply chain compliance, and enforcement readiness as this legislation moves toward enactment.

For more information, please contact Mark G. Eskenazi at 202.461.3109 or meskenazi@foxrothschild.com, or Lizbeth R. Levinson at 202.794.1182 or llevinson@foxrothschild.com.

This information is intended to inform firm clients and friends about legal developments, including the decisions of courts and administrative bodies. Nothing in this alert should be construed as legal advice or a legal opinion. Readers should not act upon the information contained in this alert without seeking the advice of legal counsel. Views expressed are those of the authors and not necessarily this law firm or its clients.