H.R. 4346: Preventing the Escalation of Armed Conflict in Europe Act of 2025

This bill, titled the "Preventing the Escalation of Armed Conflict in Europe Act of 2025" (or PEACE Act of 2025), aims to address the ongoing conflict between Russia and Ukraine by introducing sanctions aimed at foreign financial institutions that engage with Russia in ways deemed harmful to Ukraine's sovereignty and territorial integrity.

Key Provisions of the Bill

• Sanction Implementation: The Secretary of the Treasury is tasked with establishing regulations within 180 days of the bill’s enactment. These regulations would prohibit or impose strict conditions on U.S. correspondent accounts or payable-through accounts maintained by foreign financial institutions that provide significant financial services to certain Russian entities.
• Criteria for Sanctions: Specifically, sanctions would target:
  • Foreign persons already designated under various U.S. executive orders related to Russia.
  • Foreign financial institutions that are subject to sanctions under Executive Order 14024.
  • Entities that operate in the energy sector of the Russian Federation.
• Penalties for Violations: Violating these sanctions could result in:
  • Civil penalties of up to $377,700 or double the transaction amount related to the violation.
  • Criminal penalties including fines up to $1,000,000 or imprisonment for up to 20 years.
• Reporting Requirement: The Secretary of the Treasury must determine, within 90 days of enactment, whether major Russian energy companies such as Gazprom, Rosneft, and Lukoil meet the criteria for sanctions.
• Waiver Provisions: The President may grant temporary waivers of the sanctions for up to 180 days if it is deemed to help resolve the national emergency related to the conflict or is in the national interest of the United States.
• Duration of Effect: The provisions of this bill would remain in force until either the President reports that Russia has ceased operations against Ukraine or five years after the enactment of the bill.

Context and Rationale

The bill was introduced against a backdrop of renewed military aggression from Russia towards Ukraine following calls for peace and an apparent increase in attacks on Ukrainian infrastructure. The underlying goal of the legislation is to exert economic pressure on Russia to cease hostilities and engage in diplomatic negotiations to resolve the conflict.

Relevant Companies

• Gazprom: A major Russian energy company that could face sanctions affecting its ability to conduct financial transactions in the U.S.
• Rosneft: Another significant Russian oil company likely to be impacted by restrictions on financial operations in the U.S.
• Lukoil: A leading player in the Russian energy sector that may be targeted under the measures detailed in the bill.