S-2904-119
Placed on Senate Legislative Calendar under General Orders. Calendar No. 326.
Sponsored by James Risch (R-ID)
What it does
This bill would impose sanctions on vessels, companies, and individuals that make up the so-called "shadow fleet" — ships that transport oil and other goods in ways that evade existing international sanctions, particularly those targeting Russia, Iran, and other sanctioned countries. It would direct the executive branch to identify and penalize entities involved in operating, financing, insuring, or facilitating these vessels, cutting them off from the U.S. financial system and prohibiting transactions with American persons and businesses.
Who benefits
U.S. and allied energy producers who compete with sanctioned-country oil on global markets; countries and governments seeking stronger enforcement of existing sanctions regimes against Russia and Iran; maritime insurance and shipping companies that already comply with sanctions rules and face unfair competition from non-compliant operators; U.S. national security and foreign policy interests aligned with isolating sanctioned states economically.
Who is hurt
Shipping companies, vessel owners, and flag-of-convenience registries that currently operate shadow fleet vessels; financial institutions and insurers in third countries that service these ships and could face secondary sanctions exposure; countries that rely on shadow fleet oil imports (e.g., India, China, Turkey) whose energy supply chains could be disrupted; consumers in those countries who could face higher energy costs; and potentially global oil markets if supply is meaningfully reduced.
Supporters argue
Supporters argue that the shadow fleet allows sanctioned governments — particularly Russia — to generate billions of dollars in oil revenue that funds ongoing military operations and undermines the effectiveness of Western sanctions. They contend that without targeting the vessels, insurers, and financiers that make this trade possible, existing sanctions are largely symbolic. Proponents say the bill closes a critical loophole by applying secondary sanctions pressure on third-country actors who profit from sanctions evasion, and that doing so is essential to restoring the deterrent value of U.S. and allied economic statecraft. They also argue the bill strengthens maritime safety, since shadow fleet vessels are often older, uninsured, and responsible for environmental and navigational hazards.
Opponents argue
Opponents argue that broad secondary sanctions on shadow fleet participants risk damaging relationships with key U.S. partners — such as India and Turkey — that rely on these oil flows and have not joined Western sanctions regimes. They contend that penalizing third-country companies and governments for legal activity under their own national laws strains diplomatic alliances and could push those countries further toward alternative financial systems that reduce U.S. economic leverage over time. Critics also raise concerns that the bill delegates sweeping designation authority to the executive branch with limited congressional oversight, and that aggressive enforcement could tighten global oil supply, raise energy prices for consumers worldwide, and produce economic blowback that outweighs the strategic benefits.
Constitutional context
Foreign policy authority is divided between Congress and the executive branch. Congress holds the power to regulate foreign commerce (Art. I, Sec. 8) and to define and punish offenses against the law of nations, while the President holds commander-in-chief and reception clause authority and broad inherent foreign affairs powers. Sanctions legislation typically delegates significant discretionary authority to the executive, raising questions about the scope of that delegation post-Loper Bright (2024). Relevant precedents include Zivotofsky v. Kerry (2015), which addressed the boundaries of exclusive executive foreign recognition power, and Trump v. Hawaii (2018), which affirmed broad presidential authority in national security-related foreign policy actions. The International Emergency Economic Powers Act (IEEPA) and the existing sanctions statutory framework (e.g., CAATSA, OFAC authority) provide the legal infrastructure this bill would likely build upon.
Checks and balances
This bill would expand executive branch authority by directing and empowering the President and Treasury/State Departments to designate shadow fleet entities for sanctions, potentially with broad discretion over who is listed and when. Congress would set the mandate and criteria but delegate implementation to the executive, continuing a long-standing pattern in sanctions law. This shifts operational foreign policy power toward the executive while Congress retains the ability to modify or repeal the sanctions framework through legislation.
Historical precedent
The Countering America's Adversaries Through Sanctions Act (CAATSA, 2017) similarly imposed and codified sanctions on Russia, Iran, and North Korea, including secondary sanctions on third-country actors. The Iran Freedom and Counter-Proliferation Act (2012) also targeted shipping and energy sectors to enforce Iran sanctions, providing a direct structural precedent for sector-based maritime sanctions.