The Sanctioning Russia and Iran Act of 2026: Codification vs. Enforcement

Bottom Line Up Front (BLUF)

The Sanctioning Russia and Iran Act of 2026 passed the Senate on 7 August 2026 and is expected to reach the House floor within weeks. High ConfidenceWe assess that passage signals durable congressional support for economic pressure on Moscow, but that it will not, by itself, restore the pace of sanctions activity seen from 2022 through early 2025. The bill delivers on three narrower but consequential points: it signals that congressional resolve has not decayed alongside the designation tempo, it locks in three years of hard-won restrictions against unilateral reversal, and it creates new tariff and shadow-fleet authorities that reshape the market conditions determining what Russia earns per barrel of exported oil. Moderate ConfidenceWe judge the degree of actual economic pressure this produces will depend almost entirely on how the executive branch chooses to implement it.

Key Judgments

Key Assumptions and Sourcing Note

I. Background

From 2022 through early 2025, the U.S. sanctions program against Russia expanded continuously through new designations and export-control actions, capturing the shifting companies and jurisdictions supporting Russia's procurement of dual-use goods and energy sales. This activity has largely stalled since early 2025. Analysts assess the United States now maintains roughly 6,800 Russia- and Ukraine-related designations, nearly all issued before January 2025.

Ukrainian strikes on Russian refineries and transport infrastructure, combined with fuel shortages, high inflation, and elevated interest rates, are very likely straining the Russian wartime economy. Additional pressure on Russia's export earnings is assessed as unusually impactful at this juncture.

II. New Authorities on Energy and the Shadow Fleet

The Act's most consequential new authority places tariffs of up to 100 percent on third countries purchasing significant volumes of Russian energy, replacing a blunter 500 percent tariff proposed in an earlier version. Carve-outs exempt countries actively reducing dependence on Russian energy and whose imports fall below 15 percent of Russia's annual natural gas exports.

The EU phase-out following the 2022 invasion redirected the bulk of Russian seaborne crude to China and India. A new tariff authority targeting these two buyers carries real bilateral cost: it bears most heavily on the two economies Washington has the least appetite to confront directly. The volume-reduction carve-out is best read as an off-ramp for compliant buyers, not a loophole for evasion.

Sanctions and export controls after 2022 caused many trade partners to reduce purchases and observe coalition price controls. Remaining buyers willing to accept secondary-sanctions risk gained negotiating leverage, extracting deeper discounts on Russian crude — reducing Russian export revenue independent of export volume. The tariff authority is assessed to extend this dynamic on a standing basis, without requiring the continuous executive maintenance that designations demand. The Act additionally strengthens shadow-fleet enforcement by letting the White House treat UK, EU, G7, or Five Eyes vessel sanctions as prima facie grounds for a U.S. designation — assessed as a workable model for resolving coordination gaps across the sanctions coalition.

III. Locking in Stalled Economic Restrictions

The Act would codify existing restrictions and impose mandatory sanctions on Russia's leadership, energy sector, financial institutions, and evasion networks within 30 days of enactment. Sections 107–109 would make the 2022 investment prohibitions permanent absent a negotiated settlement or explicit waiver, removing rapid unilateral reopening of U.S.–Russia investment from the executive's available options. A presidential waiver remains available for any provision upon written national-interest certification — assessed as the primary constraint on the Act's practical effect.

U.S. designation activity is assessed to have flatlined in early 2025 during negotiations with Moscow, while UK and EU designation activity continued over the same period. Sanctions coverage degrades when lists stop growing, as sanctioned actors adapt operations and financial routing; an 18-month U.S. pause is assessed to have eroded coverage of Russian evasion networks even without formal removals.

IV. Evasion Routes Are Reopening

Codification is necessary but not sufficient. Enforcement, not authority, is where the executive branch's inaction shows most clearly. The success of any sanctions program depends on the sanctioning party's ability to stop circumvention — chiefly, the transshipment of Western dual-use goods to Russia through third countries.

Kazakhstan's imports of a category of network and transmission equipment from coalition countries surged after the 2022 invasion, alongside a corresponding surge in onward exports to Russia. Coordinated pressure and export controls in 2023–2024 suppressed this channel, but recent reporting indicates the excess flow to Russia has climbed back toward its 2022 peak — consistent with a broader pattern in which evasion networks adapt faster than static trade-control tools. The authority to designate these dual-use transshipment networks already exists under Executive Order 14024. We assess the gap is one of executive implementation choice, not missing legal authority — a gap the Act does not directly close.

V. Outlook

VI. Recommendations

Bottom Line

Codification very likely hardens roughly 6,800 designations and standing investment restrictions against unilateral reversal, and the tariff authority very likely gives Washington a credible instrument against the Chinese and Indian purchases now funding Moscow's war effort. Whether this produces additional pressure, rather than simply preserving existing pressure, is judged to depend almost entirely on executive implementation — a variable the Act constrains only partially through its waiver structure.