PEACE Act of 2025
- Bill Number
- H.R. 4301
- Origin Chamber
- House
- Congress
- 119th Congress, Session 1
- Policy Area
- International Affairs
- Status
- Introduced
- Latest Action
- 2025-07-07: Referred to the Committee on Foreign Affairs, and in addition to the Committee on Financial Services, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
- Last Updated
- 2025-07-31T12:30:58Z
AI-Generated Summary
Purpose
The Preventing the Escalation of Armed Conflict in Europe Act of 2025 (PEACE Act of 2025) aims to promote a peaceful resolution to the Russia-Ukraine conflict by imposing financial sanctions on foreign financial institutions that support certain Russian entities, particularly in the energy sector. It responds to ongoing Russian military actions against Ukraine by expanding U.S. economic pressure to encourage a ceasefire and settlement.
Key Provisions
- Sanctions on Foreign Financial Institutions: Within 180 days of enactment, the Secretary of the Treasury must issue regulations to prohibit or strictly limit the use of U.S.-based correspondent accounts (bank accounts that allow foreign banks to conduct transactions in U.S. dollars) or payable-through accounts (accounts that enable foreign banks to process payments through U.S. systems) by foreign financial institutions that knowingly provide significant financial services to:
- Individuals or entities already sanctioned under specific executive orders (e.g., 13660, 13661, 13662, 13685, 14024) or the Countering America's Adversaries Through Sanctions Act (CAATSA).
- Foreign banks targeted by Directive 2 of Executive Order 14024.
- Entities listed in Annex 1 of Directive 3 under Executive Order 14024.
- Any foreign person operating in Russia's energy sector, as determined by the Secretary.
- Implementation and Enforcement: The President can use powers under the International Emergency Economic Powers Act (IEEPA, a law allowing the executive branch to regulate international economic transactions during emergencies) to enforce these measures. Violations are punishable by fines or other penalties under IEEPA, similar to those for other sanctions breaches.
- Required Report on Specific Entities: Within 90 days of enactment, the Treasury Secretary must report to Congress on whether major Russian energy companies—Gazprom, Rosneft, and Lukoil—qualify as entities operating in Russia's energy sector under the sanctions.
- Waiver Authority: The President may temporarily waive sanctions (up to 180 days at a time) for a foreign financial institution if it helps resolve the national emergency related to Russia or serves the U.S. national interest, but must notify Congress with a detailed justification.
- Termination: The Act ends either 30 days after the President certifies to Congress that Russia has stopped actions threatening Ukraine's sovereignty and territorial integrity, or automatically after 5 years.
Significant Changes to Existing Law
This legislation builds on prior U.S. sanctions frameworks, such as executive orders and CAATSA (enacted in 2017 to counter threats from Russia, Iran, and North Korea), by mandating new regulations specifically targeting foreign financial institutions that support Russia's energy sector—a key economic pillar for Russia's war efforts. Unlike some existing sanctions that focus on direct designations, this Act requires proactive Treasury rulemaking and expands restrictions on global banking access to the U.S. financial system, potentially closing loopholes for indirect support to sanctioned Russian entities.
Potential Impacts
- Government Agencies: The U.S. Department of the Treasury will face increased administrative burdens to develop and enforce regulations, monitor compliance, and issue reports. The President gains flexibility through waivers but must report to Congress, enhancing congressional oversight.
- Citizens: U.S. citizens and businesses may experience indirect effects, such as higher energy prices if Russian oil and gas exports are further disrupted, though the focus is on foreign entities. No direct impacts on domestic banking for average citizens.
- International Relations: Could heighten U.S.-Russia tensions by isolating Russian-linked financial networks, pressuring allies and neutral countries to align with U.S. sanctions or risk losing access to U.S. financial systems. It may strengthen support for Ukraine by signaling U.S. commitment to peace through economic leverage, but risks retaliatory actions from Russia affecting global trade or energy markets.
Main Stakeholders Affected
- U.S. Government: Treasury Department (leads implementation), President (enforces and waives), and congressional committees (Financial Services in the House; Banking, Housing, and Urban Affairs in the Senate) for oversight.
- Foreign Financial Institutions: Banks outside the U.S. that handle transactions for sanctioned Russian entities, particularly those in Russia's energy sector, face potential exclusion from U.S. dollar-based services, disrupting global operations.
- Russian Entities: Energy companies like Gazprom, Rosneft, and Lukoil, along with other sanctioned persons or firms, may lose international financing, limiting their ability to fund military activities.
- Ukraine and Allies: Benefits Ukraine by increasing pressure on Russia; European and other U.S. partners may need to adjust financial ties to comply.
- Global Businesses and Banks: International firms relying on U.S. financial infrastructure could face compliance costs or transaction delays.
Notable Legal, Constitutional, or Political Implications
- Legal: Relies on IEEPA, which has been constitutionally upheld by courts as a valid tool for economic sanctions during declared emergencies, but could face challenges if waivers or determinations are seen as arbitrary. Penalties align with existing sanctions law, ensuring enforceability.
- Constitutional: Reinforces executive authority in foreign affairs under Article II, balanced by congressional reporting requirements, avoiding separation-of-powers issues.
- Political: Positions Congress as proactive on Ukraine policy amid executive calls for peace (referenced in findings), potentially influencing U.S. foreign policy debates. The 5-year sunset clause provides a built-in review mechanism, while termination tied to Russia's actions ties sanctions to diplomatic progress, emphasizing de-escalation over indefinite pressure.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Cosponsors (1)
Rep. Gottheimer, Josh [D-NJ-5]
Recent Actions
- 2025-07-07: Referred to the Committee on Foreign Affairs, and in addition to the Committee on Financial Services, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
- 2025-07-07: Referred to the Committee on Foreign Affairs, and in addition to the Committee on Financial Services, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
- 2025-07-07: Introduced in House
- 2025-07-07: Introduced in House
Bill Versions
- Preventing the Escalation of Armed Conflict in Europe Act of 2025 — issued 2025-07-07 — PDF (6 pages)