United States: Summary And Implications Of Proposed ‘Counteracting Russian Hostilities Act Of 2017'

On January 10, 2017, a bipartisan group of senators released proposed sanctions legislation targeting Russia, entitled the "Counteracting Russian Hostilities Act of 2017" (the "Bill"). If enacted, the Bill would require the President to impose new sanctions on persons who engage in certain activities involving various sectors of the Russian economy. The Bill would also codify existing sanctions, which have been imposed pursuant to Executive Orders (EOs), thus preventing the lifting of those sanctions by executive action.

As drafted, the Bill does not impose new self-implementing prohibitions on U.S. persons, other than those related to blocking the assets of sanctioned persons or denying sanctioned persons access to certain services. Instead, the portions of the Bill imposing new sanctions are drafted largely in the form of "secondary" sanctions, which make certain conduct "sanctionable" (i.e., subject to "menu-based" sanctions). Secondary sanctions have typically targeted the conduct of non-U.S. persons, and the menu of sanctions includes some items that are more appropriate for non-U.S. companies. Even so, the proposed sanctions could also be imposed on U.S. persons. In all cases, the imposition of sanctions would depend on a finding of sanctionable conduct by the President. It remains to be seen whether corresponding "primary" sanctions will be imposed should this proposed legislation gain traction. Such primary sanctions could have far reaching impact on U.S. companies with Russian business exposure.

Key aspects of the Bill

Russian infrastructure (Sections 207–211 and 213)

  • Portions of Title II of the Bill would require that the President impose sanctions on persons the President determines knowingly engaged in certain activity involving Russia:

- Investments or support, above specified financial thresholds, for petroleum and natural gas production (Section 207), construction of energy export pipeline (Section 208), and  construction of civil nuclear projects (Section 209);

- The purchase, subscription to, or facilitation of the issuance of new sovereign debt, including the debt of any entity owned or controlled by the Russian Federation (Section 210); and

- Investments in or facilitation of investments in privatization of Russian state-owned assets (Section 211).

  • If the President determines a person knowingly committed a sanctionable act described in Sections 207 through 211, the President would be required to impose five or more of the following menu-based sanctions: (1) denial of Export-Import Bank assistance; (2) denial of export licenses; (3) prohibition on loans above $10 million from U.S. financial institutions; (4) U.S. opposition to loans from international financial institutions; (5) inability to deal in U.S. Government debt instruments; (6) inability to serve as repository of U.S. Government funds; (7) debarment from U.S. Government contracting; (8) prohibition on foreign exchange transactions involving U.S. persons; (9) prohibition on banking transactions involving U.S. financial institutions; (10) prohibition on dealings involving the property of sanctioned persons; (11) ban on U.S. persons investing in or purchasing significant amounts of the equity or debt of the sanctioned person; (12) visa and entry restrictions for corporate officers, principals, and controlling shareholders; and (13) imposition of any of the above sanctions on certain corporate officers. These sanctions provide the President wide latitude to impose sanctions varying from limited in impact to severe (i.e., blocking).

Russian defense and intelligence sectors (Section 105)

  • Title I of the Bill targets cyber-related activities. Section 105 would require the President to impose five or more menu-based sanctions on persons the President determines knowingly engaged in significant transactions with persons that are part of or act on behalf of the defense or intelligence sectors of the Russian government. The available sanctions are the same as those set forth in Section 213, discussed above.
  • The President would be required to submit a report to Congress every 180 days listing persons meeting the sanctions criteria.

Waiver of menu-based sanctions (Sections 106 and 214)

  • The President could waive imposition of sanctions under Sections 207, 208, 209, 210, or 211 by advising Congress that the waiver is necessary for national security or will further enforcement of the Bill, and certifying to Congress that Russia is taking steps to implement the Minsk Agreements on Ukraine and substantially decreasing its military activities in Syria. The last requirement may limit the ability of the President to waive sanctions, assuming the President complies faithfully with the Bill.
  • Similarly, the President could waive application of sanctions under Sections 103 and 105 by advising Congress that the waiver is necessary for national security or will further enforcement of the Bill, and certifying to Congress that the Government of the Russian Federation has made significant efforts to reduce the frequency and severity of cyber intrusions it perpetrates.

Cybersecurity-related designations (Sections 103 and 104)

  • Section 103 would require the President to block the assets of persons engaged in activities on behalf of the Russian Government that undermine cybersecurity for infrastructure or democratic institutions of the U.S. or its allies. This provision requires the President to respond to inquiries from Congress regarding whether certain persons meet the sanctions criteria. The imposition of sanctions may be waived subject to the requirements set forth in Section 106 (discussed above).
  • Section 104 would codify EO 13694 (April 1, 2015), as amended, which subjects persons determined to be engaging in certain cyber-enabled activities aimed at national security, foreign policy, or economic health or financial stability of the United States to asset blocking and designates certain Russian Government entities and individuals as subject to asset blocking. Codification of the EO would limit the President's ability to revoke it and lift existing designations.

Codification of Ukraine-related Executive Orders (Section 206)

  • Section 206 would codify four EOs that have been implemented in response to the situation in Ukraine (EO 13660, EO 13661, EO 13662, and EO 13685) as well as all of the sanctions that have been imposed pursuant to those sanctions. Three of these EOs require the blocking of persons engaged in or providing support for certain activities contributing to the situation in Ukraine, and the fourth effectively imposes comprehensive sanctions on Crimea. The EOs have led to the designation of numerous individuals and entities — including Russian oligarchs, former Ukrainian officials, Russian companies, and separatists — and are used as a basis for "sectoral sanctions" that restrict certain long-term debt and equity transactions and certain transactions in support of the Russian oil sector. If implemented, all current sanctions imposed under the EOs would remain in effect until the termination criteria in the Bill have been met or until Congress takes further action.

Sanctions termination criteria (Sections 108 and 216)

  • The criterion for the termination of the cyber-related sanctions (Sections 103–105) would require that the President certify to the appropriate congressional committees that the Russian Government has ceased cyberattacks against U.S. entities.
  • The criterion for termination of the sanctions targeting Russian aggression (Sections 206–213) would require that the President certify to the appropriate congressional committees that the Russian Government has (1) ceased ordering, controlling, or otherwise directing, supporting, or financing significant acts intended to undermine the peace, security, stability, sovereignty, or territorial integrity of Ukraine, including through an agreement between the appropriate parties and (2) halted military operations in Syria.


It is not clear, at this time, whether the Counteracting Russian Hostilities Act of 2017 will be enacted in its present form or otherwise, but the Bill is the strongest statement to date of a bipartisan Congressional effort to use sanctions to chill transactions with large portions of the Russian economy and to restrict the President's ability to revoke these sanctions. It also bears noting that the President may not comply faithfully, or at least comply as intended by Congress, with the requirements of the Bill. Even if it is not enacted, the Bill provides important insight into sanctions that could be expected to be imposed if relations with Russia continue to deteriorate.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

In association with
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.