The Preventing the Escalation of Armed Conflict in Europe (PEACE) Act of 2025 sets a statutory objective: use U.S. financial leverage to pressure the Russian Federation toward a negotiated settlement with Ukraine. The bill directs executive action — not new tariffs or troop commitments — focused on constraining access to U.S. dollar clearing and tapping certain Russian government-held funds in U.S.-located accounts.
For policy and compliance teams, the bill signals a shift from targeted entity listings to structural measures: restricting foreign financial institutions’ ability to hold correspondent or payable-through accounts in the U.S., and transferring specified Russian sovereign assets into a Ukraine Support Fund. Both moves are intended to raise the economic cost of Russia’s campaign while creating a Treasury-led mechanism for channeling seized funds to Ukraine-related assistance and defense procurement.
At a Glance
What It Does
The bill instructs the Secretary of the Treasury to issue regulations that bar or tightly condition the opening or maintenance in the U.S. of correspondent or payable-through accounts by foreign banks that facilitate significant services for listed Russian persons or for entities operating in Russia’s energy sector. Separately, it requires Treasury to take custody of certain Russian sovereign assets located in U.S. institutions and deposit them into an existing Ukraine support fund.
Who It Affects
U.S. and foreign banks that rely on U.S. correspondent banking relationships, foreign financial institutions that provide services to sanctioned Russian entities or Russia’s energy sector, and U.S. financial institutions that hold specified Russian sovereign resources. Defense procurement offices and the Ukraine Support Fund are direct recipients of transferred funds.
Why It Matters
This law converts selective sanctions into structural restrictions on dollar clearing — a step that raises compliance complexity for international banks and heightens the leverage of U.S. Treasury rulemaking. It also creates a statutory path to redirect frozen or seized Russian sovereign assets toward U.S.-authorized Ukraine assistance and defense purchases.
More articles like this one.
A weekly email with all the latest developments on this topic.
What This Bill Actually Does
The PEACE Act tasks Treasury with two distinct, aggressive authorities. First, within six months Treasury must write regulations that either prohibit or place strict conditions on opening or maintaining correspondent or payable-through accounts in the United States by any foreign financial institution that knowingly provides significant services to certain Russia-linked parties.
Those Russia-linked parties include persons designated under Executive Order 14024 and CAATSA Title II, entities and directives identified under that Executive Order, and any foreign person Treasury determines operates in Russia’s energy sector. The regulations will create a compliance regime for banks that provide indirect U.S. dollar access for foreign customers.
Second, the Act creates a mandatory transfer posture for defined Russian sovereign resources held at U.S. financial institutions. Within 90 days of enactment the Secretary must seize or vest covered resources belonging to the Russian central bank, National Wealth Fund, or Ministry of Finance — provided those resources are included in prior Executive Order or REPO reports and are physically located in the United States — and deposit the proceeds into the Ukraine Support Fund for use specified by existing REPO-for-Ukrainians authority, including defense purchases.
The Secretary is given the same breadth of authority previously provided to the President under REPO section 104(b), and the statute defines which U.S. financial institutions are in scope by cross-reference to 31 U.S.C. 5312(a)(2) and by allowing Treasury to add others.The bill pairs those authorities with enforcement and oversight mechanics. It sets explicit civil and criminal penalties for violations of the correspondent-account regulations, including a civil fine that is the greater of a statutory cap or twice the transaction value, and criminal fines and prison terms for willful violations.
Treasury must also report to Congress within 90 days on whether Gazprom, Rosneft, and Lukoil qualify as “energy sector” foreign persons under the correspondent-account provision. Both major powers carry time-limited waiver authorities: the President may temporarily waive the correspondent-account restriction on 180-day increments with congressional notification; the President may also delay or suspend asset transfers for up to 180 days at a time, cumulatively up to one year, if certain conditions tied to Russian behavior or national interest are met.
Finally, the statute sunsets either 30 days after the President certifies Russia has ceased destabilizing activities against Ukraine or five years after enactment, whichever comes first.
The Five Things You Need to Know
Treasury must publish regulations within 180 days to prohibit or tightly condition U.S. correspondent/payable-through accounts for foreign banks that knowingly provide significant services to listed Russia-linked persons or to banks tied to Russia’s energy sector.
Civil penalties for violating the correspondent-account rules are the greater of $377,700 or twice the transaction amount; criminal penalties include fines up to $1,000,000 and up to 20 years’ imprisonment for willful violations.
Within 90 days Treasury must report to House Financial Services and Senate Banking whether Gazprom, Rosneft, and Lukoil qualify as foreign persons operating in Russia’s energy sector under the statute.
Within 90 days the Secretary must seize or vest covered Russian sovereign resources located in the U.S. (Central Bank, National Wealth Fund, or Ministry of Finance funds identified under prior directives) and deposit proceeds into the Ukraine Support Fund for specified assistance and defense purchases.
The President may issue time-limited waivers: up to 180 days for correspondent-account requirements (renewable) and up to 180 days at a time, cumulative to one year, for delaying asset transfers — each waiver requires written reporting to Congress and a justification tied to national interest or Russian behavior.
Section-by-Section Breakdown
Every bill we cover gets an analysis of its key sections.
Short title
Names the Act the Preventing the Escalation of Armed Conflict in Europe Act of 2025 (PEACE Act). This is the operative short-title clause and has no substantive effect beyond labeling the statute for reference in reports, rulemakings, and implementation documents.
Congressional findings
Summarizes recent hostilities and presidential statements as congressional findings to justify the statute’s objectives. Findings do not create legal obligations but frame the statute’s purpose and may be used in executive branch materials to explain why aggressive financial measures are being pursued.
Correspondent and payable-through account restrictions
Directs Treasury to promulgate regulations within 180 days banning or imposing strict conditions on U.S. correspondent/payable-through accounts for foreign financial institutions that knowingly provide significant services to specified Russia-linked persons, including entities designated under EO 14024 and CAATSA Title II as well as those Treasury finds are in Russia’s energy sector. The provision creates a broad rulemaking mandate and attaches civil and criminal penalties for violations, signaling that Treasury will use both administrative and criminal enforcement tools against noncompliant institutions.
Required Treasury determination on major Russian energy firms
Requires a 90-day report to congressional banking committees on whether Gazprom, Rosneft, and Lukoil fall within the Act’s definition of energy-sector foreign persons for purposes of section 3(a)(4). That determination will be a pivotal administrative decision because treating these firms as in-scope would trigger downstream correspondent-account restrictions for any foreign bank knowingly servicing them.
Presidential waiver for correspondent-account rules
Authorizes the President to temporarily waive section 3(a)’s requirements for up to 180 days at a time, provided the President reports to Congress that the waiver advances the resolution of the national emergency identified in the referenced Executive Order or is important to U.S. national interest and includes detailed reasoning. The waiver mechanism provides diplomatic and tactical flexibility while preserving a congressional notification requirement.
Seizure and transfer of covered Russian sovereign resources
Obliges the Secretary of the Treasury to seize, confiscate, transfer, or vest specified Russian sovereign assets in U.S. financial institutions and deposit proceeds into the Ukraine Support Fund, using authorities comparable to those previously granted under REPO for Ukrainians Act section 104(b). The provision defines covered resources by cross-reference to Executive Order directive 4 and REPO reporting, sets which U.S. financial institutions are in scope, and includes a presidential waiver authority (up to 180 days at a time, cumulative to one year) tied to Russian conduct or national interest.
Termination and sunset
Provides two alternative triggers that end the Act’s force: 30 days after the President reports that Russia has ceased destabilizing activities against Ukraine, or five years after enactment. The dual trigger combines a behavior-based early termination with a plain statutory sunset to limit indefinite application.
This bill is one of many.
Codify tracks hundreds of bills on Foreign Affairs across all five countries.
Explore Foreign Affairs in Codify Search →Who Benefits and Who Bears the Cost
Every bill creates winners and losers. Here's who stands to gain and who bears the cost.
Who Benefits
- Ukraine and Ukrainian defense procurement: Receives an expanded, statutory source of funds via the Ukraine Support Fund for assistance and defense purchases funded by seized covered Russian resources.
- U.S. policymakers seeking leverage: Gains a non-military instrument to increase economic pressure on Russia by constraining counterparties’ access to U.S. dollar clearing.
- Domestic and allied defense contractors: Stand to benefit if seized funds are used to purchase defense articles for Ukraine, expanding procurement opportunities tied to those appropriations.
Who Bears the Cost
- Foreign financial institutions with U.S. correspondent relationships: Face new compliance burdens and potential denial of U.S. correspondent access if they provide significant services to in-scope Russian entities, increasing de-risking pressure and potential loss of dollar clearing for clients.
- U.S. banks that hold frozen or covered Russian resources: Must assist in custody, potential legal transfers, and compliance actions and may face operational and litigation costs related to asset seizure and vesting.
- Treasury and enforcement agencies: Will shoulder rulemaking, enforcement, classification determinations (e.g., whether Gazprom/Rosneft/Lukoil qualify), and litigation risks without explicit new appropriations in the text, increasing agency workload and potential resource strain.
Key Issues
The Core Tension
The bill pits the desire to maximize economic pressure on Russia by choking dollar access and repurposing sovereign assets against the risk that broad enforcement and unclear definitions will prompt indiscriminate de-risking, disrupt legitimate financial flows, invite litigation over asset seizures, and transfer heavy implementation burdens to Treasury and U.S. banks without explicit funding — a trade-off between coercive leverage and controllable, rule-based enforcement.
The Act bundles structural correspondent-account limits with aggressive sovereign-asset transfers; both raise implementation and legal questions. For correspondent-account restrictions, the central operational challenge is the term “knowingly provides significant financial services.” Treasury will need tight definitions to avoid sweeping de-risking that severs dollar access for non-Russian commercial actors.
Banks will request granular safe harbors, look-through standards, and phased compliance timelines; absent those, the market may respond with broad de-risking that disrupts legitimate trade and humanitarian flows.
On asset transfers, the statute depends on identifying covered resources that are both within U.S. control and lawfully seizable. That raises litigation risk from foreign sovereign immunity claims, ownership disputes, and questions about the interplay with existing freezes and international law.
The Act also delegates substantial discretion to the executive branch on which institutions count as U.S. financial institutions and on waiver use — discretion that could produce inconsistent application across administrations and complicate interbank coordination. Finally, the waiver authorities create a recurring political decision point: each waiver can be framed as tactical diplomacy or as undermining enforcement credibility, complicating the signal the statute is meant to send to Moscow.
Try it yourself.
Ask a question in plain English, or pick a topic below. Results in seconds.