Russian Diesel Bill Would Bar New Energy Licenses for Three Years
The Russian diesel bill would bar new Treasury authorizations for covered energy trades for three years, weakening a buyer's fallback to a replacement license.
Primary lensExport controls
Sub-topicLicensing regime
Evidence base8 records used
Use caseExport-control exposure
A new House bill would prevent Treasury from replacing the Russian diesel authorization it seeks to cancel. For sanctions counsel reviewing a U.S. fuel importer's purchase contract, that changes the contingency to examine. A promise to seek another OFAC license would offer little protection if Congress had barred Treasury from granting the relevant permission.
The proposal creates no new prohibition today. Counsel should identify which future steps require authorization, then test the contract against a loss of permission that Treasury could not simply repair through a replacement license. The question is especially consequential where delivery obligations would survive a regulatory interruption.
The Graham law preserved the licensing power now at issue
Congress expressly protected Treasury's licensing flexibility when it enacted the Graham sanctions law on September 18. Section 114(h) of Public Law 119-111 preserves the terms of qualifying earlier general licenses and Treasury's authority to extend or issue new ones. That protection is distinct from the national-interest waiver in section 115.
The October 16 White House order implementing the Graham law used the waiver authority for specified sanctions, restrictions and duties. Section 4(d) leaves those waivers in place until the President or Secretary of State determines that further action is appropriate, with the specified consultations. It contains no fixed 60-day expiry. The separate analysis of how the Russia tariff waiver can change explains that process.
The new bill would restrict the licensing route that the Graham law preserved. Section 3(b) reaches both general licenses and Treasury authorization of otherwise-prohibited transactions ordinarily incident and necessary to the listed Russian energy trades. Changing the label to a specific license would not, on that wording alone, solve the problem. The provision restricts authorization of covered transactions, rather than only the renewal of a particular numbered document.
That boundary also limits the conclusion. Section 3(b) is not a freestanding worldwide ban on every Russian energy purchase. Its transaction language concerns activity otherwise prohibited by law. Nor does the bill expressly repeal the Graham law's section 115 tariff-waiver authority.
Four of the five named licenses have already expired
The cancellation list looks broader than its immediate effect. Russia-related General Licenses 133, 134A, 134B and 134C all expired by June 17, according to OFAC's expired-license archive. They covered specified cargoes loaded during the spring. Cancelling them now would not close four active trading windows.
General License 135, issued October 9, is different. It authorizes specified transactions involving Russian-origin diesel under the two named sanctions regulations, including U.S. imports, through one minute after midnight, eastern daylight time, on April 7, 2027. It excludes debits to specified Russian sovereign accounts at U.S. financial institutions. Section 3(a) would cut that authorization short if enacted while it remained in force.
The expiration date is not a complete import clearance. The Ending Importation of Russian Oil Act separately prohibits Russian products in Chapter 27 of the tariff schedule and sets a termination procedure. The relationship between that statute and GL 135 remains a separate issue in the Russian diesel import-cost and admission analysis. The new bill adds a potential obstacle to replacement permission without resolving that existing question.
The licensing bar and congressional review have different endpoints
Section 4 of the posted bill would expand the CAATSA congressional-review framework to sanctions under executive orders addressing the emergency declared in Executive Order 14024. It would also add covered energy-related actions, expressly including licensing actions, that facilitate sales or transfers of Russian energy.
That energy-review requirement would end upon a State Department certification, made with the specified interagency consultations, that Russia had ended its war in Ukraine and credibly committed to a just peace settlement including compensation for war damages. The three-year sunset in section 3 would not itself satisfy that test.
Russian energy authorization endpoints as of October 19, 2026
This comparison covers the current diesel license and the committee-posted proposal. Proposed restrictions depend on enactment in their present form. Sources are OFAC GL 135 and bill sections 3 and 4.
Instrument
Relevant endpoint
Consequence for the transaction file
Current GL 135
April 7, 2027, unless changed earlier
Permission must cover the relevant activity when performed
Proposed section 3 cancellation and future-authorization bar
Three years after enactment
Treasury could not supply covered replacement permission during that period
Proposed section 4 energy-action review
Required war-end and peace-settlement certification
Review could remain necessary after the three-year bar ends
Review is not an automatic congressional veto. CAATSA section 216 requires reporting and a waiting period for covered relief, and provides for approval or disapproval through enacted legislation. Expiry of the proposed licensing bar would therefore remove one obstacle. It would neither issue a new license nor necessarily remove the separate review requirement.
The contract needs an answer if permission cannot be replaced
The posted section 3 contains no express grace period for existing contracts or cargoes already loaded. Counsel should not insert one into the transaction assumptions. Section 5's humanitarian exceptions apply to sanctions under that section, so they do not establish a general transition exception to section 3.
For the purchase contract, the useful distinction is between an undertaking to apply for authorization and a workable response if authorization is legally unavailable. Review when performance can be suspended, when either party can terminate, and who bears the resulting cargo and payment obligations. Those terms should address the activities still to be performed, not merely the date on which the contract was signed. This is the commercial consequence of the proposed authorization bar, not a claim that every existing cargo would become unlawful.
The next decisive record is the legislative text that advances. An added transition clause, a narrower authorization restriction or a changed sunset could materially alter that contingency. Until then, GL 135's status and the bill's progress belong in separate fields of the approval file. Neither a political promise of relief nor the arrival of the three-year anniversary would supply the missing permission.
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