Publication
Executive Order Implements, and Immediately Waives, New Graham Act Sanctions and Tariffs Targeting Russia
By Brett W. Johnson, T. Troy Galan, and Derrick Kyle
On October 16, 2026, President Trump signed an Executive Order, Implementing the Lindsey O. Graham Sanctioning Russia and Iran Act of 2026 (the EO), which formally sets in motion the sweeping sanctions, restrictions, and tariff provisions of the bill named for the late Senator Lindsey Graham (Graham Act). However, the EO also waives the application of nearly all the provisions.
The EO establishes steep duty increases on goods from Russia and countries that purchase Russian-origin crude oil and natural gas or facilitate Russian oil sanctions evasion. Because the waivers remain in effect only until the President or the Secretary of State determines that “further action is appropriate,” the EO creates a dormant but fully assembled sanctions and tariff framework that could be activated with little notice. Importers, energy traders, shipping and logistics companies, financial institutions, and multinational businesses with exposure to Russian-origin energy should treat the EO as a significant contingent risk.
I. Background: The Graham Act
The Graham Act, which President Trump signed into law on September 18, 2026, provides for the imposition of certain sanctions against Russian and Russia-related individuals and entities, prohibitions against certain Russian-related activities, and duties on goods imported from Russia and certain other countries.
Section 115 of the Graham Act authorizes the President to waive the application of any of the Act’s sanctions, restrictions, or duties, but any such waiver is conditioned on the President submitting to Congress a written certification that the waiver is in the national interest of the United States, together with a report explaining the basis for the certification. The EO states that the President has submitted those certifications and reports for each of the waivers described below.
II. Sanctions Framework Established by the Graham Act
Sections 102 through 111 of the Graham Act direct the President to impose sanctions and restrictions on enumerated persons, most within 30 days of enactment and many subject to recurring 180-day reviews:
- Designations of persons and vessels: Blocking sanctions under the International Emergency Economic Powers Act (IEEPA) on senior Russian officials, state-owned entities, suppliers to Russia’s defense industrial base, certain oligarchs, leaders of Arctic LNG projects, and “shadow fleet” vessels and their owners, operators, and insurers.
- Financial sector sanctions: Sanctions on the Central Bank of Russia, Sberbank, VTB Bank, Gazprombank, and other state-owned banks, as well as foreign banks that conduct significant transactions with them; a ban on U.S. bank and broker-dealer transfers involving the Russian government; and sanctions on financial messaging services used for evasion.
- Capital markets and investment ban: A ban on trading securities of Russian state-owned entities on U.S. exchanges and prohibitions on U.S. persons’ new investment in Russia and purchases of Russian sovereign debt.
- Energy and uranium: A ban on U.S. energy exports to, and new investment in, Russia’s energy sector; sanctions on foreign persons supporting Russian energy production for sanctioned persons; and implementation of the Russian uranium import ban, with sanctions on the leadership of Rosatom State Atomic Energy Corporation.
Section 117 of the Graham Act permits the President to terminate sanctions on Russia only upon certifying that Russia has signed a peace agreement accepted by Ukraine and ceased hostilities, subject to congressional review.
III. Tariff Framework Under the Graham Act and the EO
Sections 112 and 113 of the Graham Act direct the President to increase duties on goods from Russia to a rate of up to 500% ad valorem and on goods from certain third countries to a rate of up to 100% ad valorem. Section 2 of the EO implements those directives by setting each rate at its statutory maximum, establishing three tiers of increased duties, each subject to the exceptions in Section 114 of the Graham Act and to the waivers in Section 4 of the EO:
- Russian-origin goods: The rate of duty on goods from Russia is increased by 500% ad valorem.
- Top purchasers of Russian energy: The rate of duty on goods from the five largest importers of crude oil and natural gas originating in Russia is increased by 100% ad valorem if the country knowingly makes new purchases of Russian-origin crude oil or natural gas on or after October 18, 2026.
- Top facilitators of sanctions evasion: The rate of duty on goods from the top five facilitators of Russian oil sanctions evasion, as defined in Section 113(i) of the Graham Act, is increased by 100% ad valorem.
Both the Graham Act and the EO provide that these increases apply in addition to any other duty, including antidumping and countervailing duties, tariffs under Sections 122, 201, or 301 of the Trade Act of 1974, and tariffs under Section 232 of the Trade Expansion Act of 1962. In other words, if activated, Graham Act duties would stack on top of existing trade remedies and tariffs rather than replace them.
Monitoring by USTR
Under Sections 2 and 3 of the EO, the U.S. Trade Representative (USTR), in consultation with the Secretaries of State, Treasury, and Energy, must monitor purchases of Russian-origin crude oil and natural gas by other countries, as well as the facilitation of Russian sanctions evasion, and regularly report to the President. USTR must report on which countries are among the top five facilitators of Russian oil sanctions evasion and must promptly inform the President of any circumstance that may indicate the need for further presidential action, “including with respect to the waivers.” The identities of the countries that would fall within the top five purchaser and facilitator categories are not specified in the EO.
IV. The Waivers
Section 4 of the EO waives the application of the following:
- Duties: All duties provided for in Sections 112 and 113 of the Graham Act or the EO, which effectively suspends the tariff tiers described above;
- Graham Act Section 102(d): The provision in Section 102(d) of the Graham Act that codifies, and requires to remain in effect, the sanctions imposed under existing Russia-related Executive Orders, with respect to foreign persons and the related restrictions with respect to persons (as discussed below, the EO separately preserves those existing sanctions); and
- Additional sanctions and restriction provisions: All other sanctions and prohibitions of the Graham Act.
Importantly, the waivers are open-ended; they remain in effect until the President or the Secretary of State determines that further action is appropriate. The EO sets no expiration date, review period, or advance notice requirement before the waivers may be lifted.
Existing Russia Sanctions Are Unaffected
Despite the waiver of Graham Act Section 102(d), which describes the “maintenance of certain sanctions relating to specified harmful foreign activities,” the EO expressly provides that nothing in it affects any sanctions or other measures under any Executive Order issued to address the national emergency with respect to specified harmful foreign activities of the Government of the Russian Federation, as in effect on the day before the Graham Act’s enactment, including with respect to all persons sanctioned under those orders. Existing Office of Foreign Assets Control (OFAC) Russia-related designations, prohibitions, and compliance obligations therefore continue in full force.
V. What This Means for Industry
Although the EO’s practical effect today is limited by the waivers, the framework it establishes could be activated quickly. Affected companies should consider the following steps:
- Map global supply chain exposure to Russian-origin energy. Companies should identify whether their supply chains, counterparties, or sourcing countries are likely to be among the largest purchasers of Russian crude oil and natural gas or among the top facilitators of Russian oil sanctions evasion. Goods from those countries could face a 100% duty increase if the waivers are lifted.
- Model tariff “stacking” scenarios. Because Graham Act duties would apply in addition to Section 232, Section 301, Section 201, Section 122, and antidumping and countervailing duties, importers should model landed-cost scenarios and review contractual provisions allocating tariff risk, such as price adjustment, change-in-law, and force majeure clauses.
- Maintain existing OFAC compliance. The waivers do not relax existing Russia sanctions. Screening, due diligence, and recordkeeping programs under current Russia-related Executive Orders remain fully applicable.
- Monitor USTR and State Department activity. USTR’s monitoring and reporting role and the Secretary of State’s delegated waiver authority are the most likely triggers for activation. Companies should track USTR reports, State and Treasury announcements, and any related Federal Register notices.
The EO builds out the full statutory machinery of the Graham Act, including some of the highest tariff rates in modern U.S. trade policy, while simultaneously holding that machinery in reserve. The result is a framework that offers flexibility to the Executive Branch, but leaves substantial uncertainty for the private sector. Businesses engaged in international trade, energy markets, and cross-border finance should use this period to assess their exposure and prepare contingency plans in the event that the waivers are modified or revoked.
***Opinions expressed are those of the authors and those quoted, and not necessarily the firm’s or their colleagues’.
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