Protecting Americans from Russian Litigation Act - Shielding US Companies from Foreign Sanctions Judgments

Crowell & Moring Trade Blog

Published March 26th, 2026

Detected March 31st, 2026

Summary

The Senate Judiciary Committee advanced S.2934, the Protecting Americans from Russian Litigation Act of 2025, on March 26, 2026. The bill would create a new Section 1660 under Title 28 to bar enforcement of foreign judgments or arbitral awards in U.S. courts where the underlying dispute arose from compliance with U.S. sanctions or where foreign courts asserted jurisdiction based on U.S. sanctions or export controls.

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What changed

S.2934 would add a new Section 1660 to Title 28 of the U.S. Code, creating a federal cause of action that bars non-governmental parties from filing civil actions in federal or state court to recognize or enforce foreign judgments or arbitral awards that arose from compliance with U.S. sanctions (including IEEPA, EAR, and ITAR obligations) or where foreign courts asserted jurisdiction based on U.S. sanctions or foreign countermeasures. The bill defines two categories of Covered Actions: disputes arising from a party's compliance with U.S. sanctions that impeded contract performance, and cases where foreign courts asserted jurisdiction based on U.S. sanctions, export controls, or retaliatory blocking statutes.

For actions falling under the bill's scope, defendants may remove cases from state court to federal district court, and federal courts are directed to dismiss such Covered Actions. The bill applies to actions pending on or after its enactment date. Notably, the bill does not apply to U.S. Government enforcement authority (including OFAC actions), victims of terrorism, or contractual disputes filed in U.S. courts to assert rights other than enforcing foreign judgments. Companies that exited Russia following the 2022 invasion or that deal with OFAC-restricted parties should review whether pending or potential foreign litigation would constitute a Covered Action under this bill.

What to do next

Identify any pending or anticipated foreign litigation related to Russia sanctions compliance and evaluate whether it would constitute a Covered Action under S.2934
Review contracts with Russian counterparties or OFAC-restricted parties for dispute resolution provisions and potential Covered Action exposure
Monitor S.2934's progress through Congress, as the bill may advance to a full Senate vote

Source document (simplified)

On March 26, 2026, the Senate Judiciary Committee advanced S.2934, the Protecting Americans from Russian Litigation Act of 2025 (the Bill), introduced by Senators John Cornyn (R-TX) and Alex Padilla (D-CA) in September 2025. The Bill is intended to address situations where U.S. companies that exited Russia to comply with U.S. sanctions following Russia’s 2022 invasion of Ukraine faced retaliatory litigation in Russian courts resulting in adverse judgments, which judgments have then been enforced abroad.

If enacted, the Bill would add a new statute, Section 1660, to Title 28, and would bar any non-governmental party from filing a civil action in federal or state court to recognize or enforce a foreign judgment or foreign arbitral award in the United States where: (i) the underlying dispute arose from a party’s actions to comply with U.S. sanctions that impeded contract performance, or (ii) the foreign court or tribunal asserted jurisdiction based, in whole or in part, on the imposition of U.S. sanctions or export controls– or foreign countermeasures responding to them (e.g., blocking statutes) ((i) and (ii) together, Covered Actions).

For actions filed in state court, defendants may remove Covered Actions to federal district court, and the Bill directs federal courts to dismiss the Covered Action. The Bill would also apply to Covered Actions pending on or after the date of enactment.

Of note, the Bill would not apply to U.S. Government enforcement authority, including that enforcement brought by the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC), nor would it apply to certain other classes of plaintiffs including, among others: (i) victims of terrorism; (ii) litigation filed in the U.S. to assert contractual rights (other than to enforce a foreign judgment or foreign arbitral award that is a Covered Action) where the parties agreed to resolve their disputes in state or federal court; or (iii) any action arising under state or federal law (other than to enforce a foreign judgment or foreign arbitral award that is a Covered Action) premised on sanctions or export controls – as compared to a party’s actions to comply with U.S. sanctions.

The Bill’s definition of “United States sanctions” expressly refers to International Emergency Economic Powers Act (IEEPA), 50 U.S.C. § 1702, the statute under which U.S. sanctions have been imposed relating to Russia, and extends to export-control authorities, capturing compliance obligations under OFAC regulations including the Export Administration Regulations (EAR) and the International Traffic in Arms Regulations (ITAR). While the Trading With the Enemy Act (TWEA) is not expressly included, the broad definition of “United States sanctions” suggests that TWEA-related judgments may constitute Covered Actions.

Notably, the Bill expressly excludes duties on imported goods, limiting the Bill’s applicability to purely tariff-based disputes which may have been based on IEEPA.

EU Considerations

The Bill mirrors similar protections offered under EU and UK sanctions regimes. For instance:

Council Regulations establishing EU restrictive measures (sanctions) typically include as a standard provision, known as the ‘no-claims clause’, that protects operators required to comply with EU sanctions from having to satisfy claims asserted by certain third parties (e.g., EU sanctioned persons/entities or Russian entities with respect to EU sectoral sanctions on Russia) when such claims are connected to the performance of a contract or transaction affected by EU sanctions.
The UK has not replicated the EU ‘no claims’ language as part of its post-Brexit sanctions regime. Rather, section 44 of the UK’s Sanctions and Anti-Money Laundering Act 2018 provides a statutory defence to civil claims where a party reasonably believes that they were acting in compliance with UK sanctions. The EU and UK provisions have given rise to various interpretative questions, especially in the context of Russia-related sanctions litigation and arbitration. For instance, the UK’s s. 44 was addressed in a recent UK Supreme Court (the Court) decision UniCredit Bank v Celestial Aviation Service, in which the Court confirmed that s. 44 provides protection against an action to recover debt, an award of interest on the debt and an award of associated costs, where a failure to pay was due to a reasonable belief that the non-paying party was required to comply with UK sanctions.

From an EU perspective, a series of no claims-related questions have been submitted to the Court of Justice of the European Union (CJEU), for example, regarding the recognition and enforcement of arbitration awards in EU Member States and whether the no-claims provision prohibits (1) parties from reaching an out-of-court agreement to settle claims where the dispute relates to contracts not performed due to EU sanctions or (2) the repayment of an advance for goods or services that were not provided owing to sanctions. These cases are still pending.

Implications

If the Bill is enacted, it would provide a significant legal defense in the United States for companies that ceased Russian market activities as part of efforts to comply with U.S. sanctions and export controls. This is especially relevant for firms in sectors like aeronautics, shipping, energy, finance, logistics, construction, defense, and commodities. Companies with pending or potential exposure to Russian civil litigation may wish to consider this development if they are actively litigating such issues or are considering exiting the Russia market.

More significantly, given the Bill does not expressly limit itself to Russia-related litigation, it is possible that U.S. defendants facing Covered Actions may be able to assert the Bill as a defense relating to other jurisdictions or U.S. sanctions programs, such as Iran, Cuba, or blocked persons.

In light of the Bill, which has bipartisan sponsorship, companies that exited Russia or are considering exiting Russia may wish to consider:

Assessing any existing or threatened Russian litigation or arbitral proceedings connected to U.S. sanctions or export-control compliance decisions;
Documenting the good-faith compliance basis for Russia-related wind-downs or contract exits undertaken after February 2022;
Assessing whether pending civil enforcement actions in U.S. courts may be considered Covered Actions within the scope of proposed 28 U.S.C. § 1660; and
Monitoring the Senate Judiciary Committee’s consideration of S.2934 for further procedural developments, as well as potential foreign legislation which may be “reciprocal” or “retaliatory” and may restrict enforcement of US judgments in foreign countries. Crowell will continue to monitor legislative and enforcement developments related to U.S. sanctions and export-control compliance obligations and their implications for affected industries.

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Crowell & Moring is a full-service international law firm that represents major businesses – both public and private – in complex high-stakes litigation, enforcement, regulatory and administrative, transactional matters, and government and internal investigations. Our Trade Law Blog features legal insight and thought-leadership affecting the industries and business reliant and affected by international trade.

Named provisions

Section 1660 - Covered Actions Definition International Emergency Economic Powers Act Reference Export Administration Regulations Scope International Traffic in Arms Regulations Scope Removal to Federal Court Provision Pending Actions Application