Action Alert: Cosponsor Bipartisan Bills to Close Russian Oil Sanctions Loopholes

Bottom Line Up Front

Rep. Lloyd Doggett (D-TX) introduced two bipartisan bills today to strengthen U.S. sanctions on Russian oil and prevent American companies from supporting Russia’s military efforts. Although the Ending Importation of Russian Oil Act became law in April 2022, Russia continues to bypass sanctions through refining loopholes and foreign subsidiaries of U.S. companies. These gaps likely enable billions of dollars to reach Moscow, directly funding Russia’s aggression in Ukraine.

This legislation can help ensure U.S. sanctions effectively cut off funding for Russia’s war in Ukraine:

• The Ending Importation of Laundered Russian Oil Act would close the “refining loophole” that allows Russian oil to be laundered through third-party countries and sold in the United States as gasoline and other petroleum products.
• The No Aid for Russian Energy Act would ban U.S. companies and individuals, as well as their foreign subsidiaries, from providing petroleum equipment, software, or services to Russia, which would significantly diminish Russia’s oil production capacity.

FDD Action supports these bipartisan bills and encourages Members of Congress to cosponsor them.

• Lead: Rep. Lloyd Doggett (D-TX)
• Cosponsors of the Ending Importation of Laundered Russian Oil Act: Don Bacon (R-NE), Gus Bilirakis (R-FL), Steve Cohen (D-TN), Brian Fitzpatrick (R-PA), Rich McCormick (R-GA), Gwen Moore (D-WI), Donald Norcross (D-NJ), Eleanor Holmes Norton (D-DC), Mike Quigley (D-IL), Brad Schneider (D-IL), Chris Smith (R-NJ), Joe Wilson (R-SC).
• Cosponsors of the No Aid for Russian Energy Act: Don Bacon (R-NE), Gus Bilirakis (R-FL), Steve Cohen (D-TN), Brian Fitzpatrick (R-PA), Dan Goldman (D-NY), Tom Kean Jr. (R-NJ), Eleanor Holmes Norton (D-DC), Mike Quigley (D-IL).

FDD Action Expert Analysis

What You Need to Know

• The Refining Loophole: While direct imports of Russian energy products have been banned since April 2022, Russian oil can be refined or “substantially transformed” in third-party countries before being sold to the United States as gasoline, diesel, and other petroleum products. All products classified under Chapter 27 of the Harmonized Tariff Schedule that were produced at refineries using Russian crude oil continue to enter U.S. markets freely.
• Funding Moscow’s War Machine: Russia has sold $37 billion in oil to India, where much of it is refined before re-export, with $192 million worth of Russian oil reaching the United States through this loophole. This allows Russia to maintain access to American consumers, with billions of dollars flowing back to fund Putin’s war machine in Ukraine. The U.S. remains linked to a supply chain channeling funds to Russia used to wage aggression.
• Foreign Subsidiaries of U.S. Companies as Facilitators: Despite the Biden administration’s January 2025 ban on U.S. petroleum services supporting Russia, American oilfield services companies continue to enableRussian oil production through extensive networks of foreign subsidiaries. These subsidiaries supply essential equipment, technology, software, engineering services, consulting, and intellectual property licensing that keep Russian oil fields operational.

About the Legislation

The Ending Importation of Laundered Russian Oil Act would close the refining loophole by:

• Banning all products classified under Chapter 27 of the Harmonized Tariff Schedule that were produced at any refinery that uses Russia-origin crude oil from being imported into the United States.
• Amending the original Ending Importation of Russian Oil Act to add this prohibition alongside the existing ban on direct Russian energy imports.
• Establishing clear enforcement authority through presidential waiver provisions for vital national security interests, with congressional notification requirements.
• Preventing laundering schemes where Russian oil is mixed with other crude sources at foreign refineries before entering U.S. commerce.

The No Aid for Russian Energy Act would ban U.S. petroleum services to Russia by:

• Prohibiting U.S. persons from providing petroleum equipment and services to any person in Russia, including equipment, equipment parts, software, and services related to oil and gas exploration and production.
• Extending prohibitions to foreign subsidiaries of U.S. companies, thereby preventing foreign entities owned or controlled by a U.S. person from knowingly engaging in transactions otherwise prohibited for U.S. persons. This closes a loophole that lets U.S. companies skirt responsibility for their foreign subsidiaries’ actions in Russia’s energy sector.
• Holding parent companies liable for foreign subsidiaries violating sanctions, similar to the Cuba and Iran sanctions regimes.
• Imposing asset blocking sanctions on foreign persons who provide petroleum equipment and services to Russia, exercising all powers under the International Emergency Economic Powers Act.
• Implementing visa bans and entry restrictions for corporate officers and principal shareholders of sanctioned foreign entities.
• Defining petroleum equipment and services comprehensively to include software support, cloud-based data systems, engineering and consulting services, process optimization, technology transfer, intellectual property licensing, and capacity building.
• Requiring regulatory implementation within 180 days with penalties for violations, attempts to violate, conspiracies to violate, or causing violations.
• Allowing presidential waivers for 180-day periods only when vital to U.S. national security interests and with congressional certification 15 days prior.