On October 16, 2026, President Trump issued an Executive Order implementing the newly enacted Lindsey O. Graham Sanctioning Russia and Iran Act of 2026 and, at the same time, waived most of its principal sanctions, restrictions, and tariff provisions. The result is an unusual legal structure: Congress has created a very broad Russia sanctions framework, while the Administration has chosen to keep much of that framework dormant for the time being. The White House

The Act reaches Russian trade and investment directly, but it also creates potential exposure for foreign financial institutions, industrial companies, energy purchasers, multinational supply chains, and U.S. importers sourcing from countries that continue to purchase large volumes of Russian oil and gas. The Executive Order leaves those mechanisms available for later use and directs U.S. agencies to continue monitoring Russian energy purchases and sanctions-evasion activity. The White House

That combination makes the October 16 action important even though many of the new restrictions are currently suspended. The statutory framework now exists. Future sanctions policy can therefore move through waiver decisions and implementing actions rather than waiting for another major piece of legislation.

What the Waiver Actually Covers

The Graham Act was signed into law on September 18, 2026. It creates sanctions and restrictions across a wide range of Russia-related activity, including Russian officials and state-connected entities, financial institutions, sovereign debt, energy, financial messaging services, uranium, new investment, services, and foreign support for Russia’s defense-industrial base. It also creates substantial tariff authorities. GovInfo

Among the most striking provisions are a 500 percent additional tariff on Russian-origin goods and potentially 100 percent additional tariffs on goods from countries identified as major purchasers of Russian oil and natural gas or major facilitators of Russian oil sanctions evasion. The October 16 Executive Order establishes the mechanism for those tariffs and then waives their application. The White House

The President also waived the application of sanctions and restrictions contained in Sections 102, 103, 104, 105, 106, 107, 108, 109, 110, 111, and 117 in the manner specified in the order. The waivers remain effective until the President, or the Secretary of State in consultation with Treasury and USTR where appropriate, determines that further action should be taken. The White House

That last feature is especially important for compliance planning. The order gives the Administration continuing discretion to revisit the waiver as circumstances develop.

The Executive Order also makes clear that the waiver does not disturb sanctions imposed under the Russia-related Executive Orders that were already in effect before the Graham Act was enacted. Companies therefore continue to operate under the existing OFAC restrictions, licenses, determinations, and guidance that have developed since 2022. The White House

Why the Waiver Matters for Future Policy

The political interpretation of the waiver has already become contested. Critics have argued that postponing the new sanctions reduces pressure on Russia. President Trump has publicly linked the timing of additional sanctions to negotiations and has argued that imposing stronger measures at this stage could interfere with diplomatic efforts. AP News

Another reasonable interpretation is that the Administration is preserving the new sanctions package as a bargaining instrument. That conclusion cannot be established from the Executive Order alone, but several features of the current framework support the possibility.

Congress has already authorized the measures. The President therefore has a set of potentially severe sanctions and tariffs available without having to return to Congress for another sanctions statute. The October 16 order also instructs USTR and other agencies to continue monitoring Russian energy purchases and sanctions-evasion activity and to inform the President of circumstances that may warrant changes to the waivers. The White House

From a negotiating perspective, that gives the Administration considerable optionality. A 500 percent tariff or a new statutory services restriction can influence commercial and diplomatic behavior while the possibility of activation remains credible. Whether this approach increases leverage or gradually reduces the credibility of the threat will depend on how the Administration uses the authority and how Russia and third countries respond.

Companies do not need to make a geopolitical prediction in order to manage the legal consequences. The practical assumption should be that the waiver can change, and that some of the resulting changes could be implemented on a much shorter timetable than a newly enacted sanctions law.

Potential Tariff Exposure Across Supply Chains

For multinational companies with little or no direct Russia exposure, the tariff provisions may eventually become the most commercially significant part of the Act.

The Graham Act reaches beyond Russian-origin imports. It contemplates additional duties on imports from major purchasers of Russian crude oil and natural gas and from jurisdictions identified as significant facilitators of Russian oil sanctions evasion. A U.S. importer could therefore face Graham Act consequences through its sourcing country even where the imported product itself has no connection to Russia. The White House

Companies with significant sourcing from Asia, the Middle East, or other jurisdictions that maintain large energy relationships with Russia should understand where their U.S. import exposure sits. There is little reason to redesign supply chains while the duties are waived, but there is considerable value in knowing which products, sourcing countries, and business units would be affected if the tariff provisions were activated.

The same planning logic applies to financial institutions and companies using complex international payment chains. The Act contains additional restrictions involving Russian financial institutions, Russian government transactions, and other financial channels. Those measures could have indirect consequences for companies that do not sell to Russia but rely on banks, correspondent institutions, or payment intermediaries with significant Russia exposure.

Defense-Industrial Risks for Commercial Companies

Industrial companies should also look carefully at the defense-industrial provisions. Section 102 covers foreign persons that knowingly provide specified goods or services relating to Russia’s defense-industrial base. Congress expressly identified product categories including CNC equipment, lubricant additives, chemical coatings, nitrocellulose and associated materials, advanced sensors, and items on the BIS Common High Priority List. GovInfo

Those categories reach well into ordinary commercial manufacturing. A chemical coating, additive, component, or piece of industrial machinery can have completely legitimate civilian applications while also becoming relevant to a sanctions analysis because of the customer, intermediary, ultimate end user, or industrial application.

Companies selling these kinds of products through distributors or third-country intermediaries may eventually need a more developed Russia defense-industrial risk assessment than traditional sanctions screening alone provides.

Existing Russia Operations and New Investment

Businesses that still own Russian subsidiaries, maintain legacy investments, or continue limited lawful operations face more immediate operational issues.

Many of those companies have spent the last several years building their Russia operating model around OFAC’s existing rules: prohibited expansion, permitted maintenance in appropriate circumstances, limited services, general licenses for specified transactions, restricted-party screening, and controls on U.S.-person involvement.

The waiver leaves that existing structure largely where it was. The more difficult questions arise from the possibility that the Graham Act’s statutory restrictions could later become operative alongside it.

Executive Order 14071 continues to prohibit new investment in Russia by U.S. persons.

OFAC has provided relatively detailed guidance on the distinction between prohibited new investment and permissible maintenance of preexisting operations. Its guidance recognizes activities such as payments to employees, suppliers, landlords, lenders, and partners; preservation and upkeep of existing property; and activities associated with maintaining preexisting capital and equity investments. OFAC also recognizes that companies may enter into new contracts where necessary to replace suppliers, conduct repairs, or comply with safety and environmental requirements, provided those activities support preexisting operations rather than their expansion. OFAC

That guidance has become an important part of the operating framework for companies that retained Russian subsidiaries while freezing growth.

Section 107 of the Graham Act creates a separate statutory prohibition on new investment. It is presently waived. The statutory text does not expressly incorporate OFAC’s existing maintenance guidance, which creates a question for future implementation. Treasury may conclude that the familiar maintenance framework should continue under the new statute, and there are sound practical reasons for doing so. Companies should nevertheless identify which current activities depend on that interpretation so that they can be reassessed promptly if Section 107 becomes active.

For companies with manufacturing operations, this inventory may include equipment replacements, capital repairs, supplier substitutions, environmental upgrades, production modifications, and funding needed to maintain an existing facility. The legal analysis is much easier when those activities have already been separated from genuine expansion.

Services to Russian Subsidiaries

Services create a different concern because many Russian subsidiaries remain operationally connected to global corporate systems.

Under the existing E.O. 14071 framework, Treasury has prohibited several categories of services to Russia. At the same time, OFAC’s implementing determinations contain an important exclusion for covered services supplied to a Russian entity that is directly or indirectly owned or controlled by a U.S. person.

In the IT context, OFAC has expressly confirmed that the exclusion can apply to covered services provided to a U.S.-owned or controlled Russian subsidiary. This can support continued access to certain ERP systems, IT support, enterprise software, technical systems, and centralized corporate services. OFAC

Section 107 creates a separate statutory services restriction. The statute authorizes Treasury to identify categories of services that may not be supplied by U.S. persons or from the United States to persons located in Russia. The statutory text does not itself reproduce the existing controlled-entity exclusion.

Treasury could preserve that treatment through its implementing decisions or through licensing. Until that happens, companies whose Russian operations depend on U.S. services have a useful reason to develop a contingency plan.

That plan does not require immediate restructuring. It can begin with a straightforward inventory: which Russian functions depend on U.S. support, which systems are critical, which services could be transferred lawfully to another jurisdiction, which depend on U.S.-origin technology regardless of who provides the support, and how long the Russian operation could function if particular services were suspended.

For many companies, SAP, ERP support, product-lifecycle systems, cybersecurity, technical support, software licensing, or centralized engineering will appear somewhere on that list.

A change in sanctions law becomes much easier to manage when the company already knows which operational dependencies sit behind the legal exception.

Payments to Russian Government Authorities

Companies that maintain Russian legal entities must also continue dealing with Russian government authorities. Taxes, customs duties, permits, registrations, and other mandatory charges do not disappear because sanctions tighten.

Section 105 of the Graham Act addresses certain transfers to or from the Russian government and transactions for the benefit of Russian officials. The provision is currently waived.

Congress also included an important statutory exception. Transfers that arise from and are ordinarily incident and necessary to an underlying transaction authorized by an OFAC general or specific license can continue to be processed under the terms of the statute. GovInfo

That structure should give companies some comfort regarding routine government payments already supported by OFAC licensing, while still requiring careful attention to the scope of the relevant authorization.

A well-organized compliance file should identify the legal authority supporting recurring Russian government payments and preserve the underlying documentation. That discipline becomes especially valuable when a bank reviews a payment after the regulatory environment has changed.

Preparing for a Change in the Waiver

Companies may ultimately find that the Graham Act changes relatively little in their day-to-day operations. Treasury may preserve existing OFAC interpretations, continue controlled-entity exclusions, and issue licenses that allow lawful legacy businesses to function.

The possibility of a different implementation is significant enough to justify some preparation.

A company can map its Russia-related investments against the current maintenance framework. It can identify U.S.-provided services that rely on existing OFAC exclusions. It can document the legal basis for tax and government payments. It can review product categories that may fall within the defense-industrial provisions. And it can estimate how the tariff provisions would affect U.S. sourcing if countries important to its supply chain become subject to additional duties.

None of those projects requires a prediction about U.S.-Russia negotiations.

They simply recognize that Congress has created a large new sanctions architecture and the President has temporarily placed much of it behind a waiver.

The October 16 action gives companies some time to understand how that architecture intersects with their business. For companies with Russia exposure, the most useful outcome would be the ability to respond to a change in the waiver with an existing plan rather than an emergency review of systems, payments, capital expenditures, and supply relationships.

In sanctions compliance, advance preparation tends to be far less expensive than reconstructing operational dependencies after the legal position has already changed.