Yesterday, July 25th, the U.S. House of Representatives passed the “Countering America’s Adversaries Through Sanctions Act” by a vote of 419-3. The bill originated as an act in the Senate which was focused on Iran. In response to Russian meddling in the U.S. election, the Senate expanded that bill to include additional sanctions against Russia, codify various Russia-Ukraine sanctions promulgated by the Obama Administration into law and add procedural provisions to delay or prevent any efforts by the Trump Administration to relax those codified Obama Administration sanctions. The Senate passed their revised version of this legislation last month by a vote of 98-2. For more information on the Senate’s earlier approval, please see our post on June 16th.
Upon reaching the House, the legislation stalled for several weeks due to pressure from the White House and the energy industry. However, Congressional leaders reached an agreement this past weekend to pass the legislation. The revised version of the legislation also includes new provisions added by the House which will impose additional sanctions against Iran and North Korea in response to their recent missile tests. The House’s version also contains additional technical changes plus a new adjustment which would modify the Senate’s version and permit U.S. firms to partner with sanctioned Russian firms on energy related projects in Russia provided that the sanctioned Russian firm holds less than 33 percent ownership interest in the project.
Because of the new language added by the House of Representatives, the revised legislation will have to go back to Senate for further approval, which it will likely receive considering the overwhelming margin by which Senate approved the bill last month. If or when Senate approves the bill, President Trump is expected to then sign the bill despite his previous objections. White House Press Secretary Sarah Huckabee Sanders recently stated “The administration is supportive of being tough on Russia, particularly in putting these sanctions in place…The original piece of legislation was poorly written, but we were able to work with the House and Senate, and the administration is happy with the ability to do that and make those changes that were necessary, and we support where the legislation is now.”
After the announcement on Saturday that Congress had reached an agreement, the European Commission cautioned the U.S. not to expand its sanctions on Russia unilaterally, indicating it would have consequences on EU energy companies and other businesses. The EU has threatened retaliation if the legislation is passed and signed into law, as there are several major German companies involved in a pipeline construction project involving Russia.
For guidance on navigating any of the U.S. sanctions programs and ensuring your business is up to date and in compliance with U.S. export regulations, contact Cortney Morgan, Linda Tiller, or Grant Leach.