HR-6194-119
Ordered to be Reported (Amended) by Voice Vote.
Sponsored by Wesley Hunt (R-TX)
What it does
This bill would bar any person (other than the U.S. government) from bringing a civil lawsuit in any U.S. federal or state court to enforce a foreign court judgment or foreign arbitration award when the underlying dispute arose from a party's compliance with U.S. sanctions or export controls, or when the foreign court claimed jurisdiction based on U.S. sanctions. It would allow defendants in such cases to remove the lawsuit to federal court, which would then be required to dismiss it. The bill applies to cases already pending when it is enacted, not just future cases.
Who benefits
U.S. companies and individuals who broke contracts or otherwise changed their business conduct to comply with U.S. sanctions (e.g., sanctions on Russia, Iran, or other countries) and now face foreign lawsuits or arbitration awards seeking damages. U.S. banks and financial institutions that cut off sanctioned entities. Multinational corporations with global contracts that were forced to exit relationships due to sanctions. U.S. exporters who stopped shipments under export control rules. Indirectly, the executive branch's ability to enforce sanctions is strengthened, since foreign litigation risk is reduced as a deterrent to compliance.
Who is hurt
Foreign counterparties — including businesses and individuals in sanctioned countries — who entered into contracts with U.S. persons and suffered financial losses when those contracts were broken due to sanctions, and who obtained foreign judgments or arbitration awards to recover those losses. Non-U.S. companies in third countries (e.g., European or Asian firms) that had valid contracts with U.S. parties, complied with their own obligations, and won foreign arbitral awards, but would now be unable to collect in U.S. courts. Parties who agreed to foreign arbitration clauses in good faith and relied on the enforceability of those awards. U.S. courts and the international arbitration system, which may face reduced credibility if U.S. courts are seen as selectively refusing to honor internationally recognized awards.
Supporters argue
Supporters argue that U.S. sanctions are a critical national security and foreign policy tool, and that their effectiveness is undermined when American companies face massive financial liability in foreign courts simply for obeying U.S. law. They contend that Russia and other adversaries have used foreign litigation — including in jurisdictions that enacted "mirror" laws specifically to punish sanctions compliance — as a weapon to coerce U.S. businesses into violating sanctions. Without this protection, companies face an impossible choice between breaking U.S. law and absorbing ruinous foreign judgments, which chills sanctions compliance and weakens U.S. foreign policy.
Opponents argue
Opponents argue that the bill broadly overrides the United States' longstanding treaty and customary international law obligations to recognize and enforce foreign arbitral awards, including under the New York Convention, which underpins global commercial arbitration. They contend that selectively refusing to honor arbitration awards — even those involving third-country firms with no connection to adversarial governments — damages U.S. credibility as a reliable commercial partner, may invite reciprocal retaliation against U.S. judgments abroad, and retroactively strips parties of legal remedies they had already won, raising serious due process concerns.