The bill adds a new section (28 U.S.C. 1660) that bars private parties (other than the United States or its agents) from bringing civil actions in federal or state court to recognize or enforce foreign judgments or foreign arbitral awards when those awards arise from claims tied to attempts to comply with U.S. sanctions or where the foreign tribunal asserted jurisdiction based on U.S. sanctions or export controls. It also allows any defendant to remove such enforcement actions to federal district court and requires dismissal.
This is a structural protection for U.S. persons engaged in sanction-sensitive commerce: it makes enforcement of many foreign judgments or awards unavailable in the United States, defines “United States sanctions” to include IEEPA authority and export controls (excluding import duties), preserves specific carve-outs (including certain terrorism and torture victim claims and disputes already agreed to be litigated or arbitrated in the United States), and applies to cases pending on enactment. The bill shifts litigation risk away from U.S. courts and toward foreign enforcement forums, with immediate implications for international arbitration, cross-border contracts, insurers, banks, and counsel handling sanction-related disputes.
At a Glance
What It Does
Creates 28 U.S.C. 1660 to prohibit private parties (except the U.S. government) from bringing actions in U.S. federal or state courts to recognize or enforce foreign judgments or arbitral awards that stem from conduct taken to comply with U.S. sanctions or where the foreign tribunal asserted jurisdiction based on U.S. sanctions; authorizes removal of such actions to federal court and mandates dismissal.
Who It Affects
Foreign claimants and holders of foreign judgments or arbitral awards seeking U.S. enforcement; U.S. companies, banks, and contractors that altered performance to comply with U.S. sanctions; arbitration providers and counsel who handle sanction‑related disputes; U.S. courts that would receive removal petitions and dismissal orders.
Why It Matters
The bill protects U.S. persons from being penalized in foreign fora for following U.S. law, but it also reduces the practical value of foreign judgments and awards for recovering losses tied to sanctions, raising comity, treaty, and enforcement-of-arbitral-awards issues that affect cross‑border contracts and risk allocation.
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What This Bill Actually Does
The core change is procedural and substantive: the bill inserts a new statute (28 U.S.C. 1660) that says private parties cannot use U.S. courts to enforce foreign judgments or arbitral awards when those awards are rooted in disputes caused by a party’s effort to comply with U.S. sanctions or when the foreign tribunal took jurisdiction based on U.S sanctions or export controls. That covers two different scenarios—(1) where compliance with sanctions impeded contract performance and produced the underlying claim, and (2) where a foreign court or arbitration panel asserted jurisdiction because of U.S. sanctions or export controls (or foreign laws enacted in response).
In either scenario, enforcement actions in the U.S. are off-limits.
Procedurally, the bill gives any defendant the right to remove an enforcement action that falls under this rule to federal district court, and the district court must dismiss it. The statute explicitly excludes the United States and its agents from the ban—so the U.S. government can still bring actions—and preserves several narrow substantive exceptions.
Those exceptions include certain terrorism/torture/hostage‑taking victim causes of action, statutory sanctions schemes tied to Iran and Syria, and disputes where parties had contractually chosen U.S. courts or U.S.-based arbitration to resolve disputes. The statute also says it does not apply to import duties.The bill’s definition of “United States sanctions” is broad: it includes prohibitions and restrictions imposed under IEEPA section 203 and other federal laws, including export controls.
Because the statute reaches both federal and state courts and applies to pending matters, it immediately alters the enforcement landscape: foreign claimants who obtained judgments or awards abroad will find U.S.-based enforcement blocked in many sanction‑related cases, and defendants in the U.S. can remove and secure dismissal. That changes how parties draft contracts, where they choose fora, how insurers and banks assess recoverability, and how arbitration counsel advise clients about enforcement risk.
The Five Things You Need to Know
The bill creates a new federal statute, 28 U.S.C. §1660, specifically limiting enforcement of foreign judgments and foreign arbitral awards in the United States when tied to U.S. sanctions or export controls.
It operates on two triggers: (A) the dispute arose because a party took actions to comply with U.S. sanctions that impeded contractual performance; or (B) the foreign tribunal asserted jurisdiction based in whole or in part on the imposition of U.S. sanctions or related foreign laws.
Any defendant may remove an enforcement action covered by §1660 to federal district court, and the district court must dismiss the action rather than recognize or enforce the foreign judgment or award.
The statute expressly excludes the United States (and its agents) from the bar and preserves specific causes of action—e.g.
certain terrorism/torture/hostage‑taking victim claims and disputes already agreed to be litigated or arbitrated in the United States.
The bill defines ‘United States sanctions’ to include measures imposed under IEEPA (sec. 203) and other laws including export controls, but it explicitly excludes import duties; the law applies to cases pending on enactment.
Section-by-Section Breakdown
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Short title
Declares the Act’s short title as the “Protecting Americans from Russian Litigation Act of 2025.” This is purely nominal but signals the bill’s policy focus on preventing enforcement of foreign judgments tied to sanctions regimes.
Statement of policy
Sets out congressional policy that U.S. persons should not be disadvantaged for complying with U.S. sanctions and that foreign actors should not be able to recover against U.S. persons for good‑faith compliance. While not legally operative, the statement frames statutory interpretation and will likely be cited by courts evaluating intent and scope when interpreting the new enforcement bar.
Substantive bar on enforcement
Adds the substantive hook: no person other than the United States (or its agents) may bring a civil action in federal or state court to enforce a foreign judgment or foreign arbitral award when the claim arose because of actions to comply with U.S. sanctions that impeded performance, or where the foreign tribunal based jurisdiction in whole or in part on U.S. sanctions or responsive foreign law. This provision reaches both court recognition and award enforcement domestically, removing U.S. enforcement as a recovery pathway in covered circumstances.
Removal and dismissal procedure
Authorizes any defendant in a covered enforcement action to remove the case to an appropriate U.S. district court and requires that court to dismiss the action. That makes the bar self‑executing at the defendant’s option and funnels disputes into federal courts for a mandatory dismissal rather than permitting piecemeal state‑court rulings that might create inconsistent enforcement outcomes.
Exceptions and preserved remedies
Contains multiple express carve-outs: it preserves U.S. government authority to bring actions; preserves specific victim‑oriented causes of action (terrorism, torture, extrajudicial killing, aircraft sabotage, hostage taking) for certain U.S. nationals and related parties; preserves contractually chosen U.S. forums or U.S.-based arbitration; and leaves intact other State or Federal remedies that are not enforcement of a covered foreign judgment or award. These exceptions narrow the sweep of the ban and create bright lines that courts will need to apply.
Definitions, clerical amendment, and application
Defines ‘United States sanctions’ to include prohibitions under IEEPA sec. 203 and other laws, including export controls, but expressly excludes import duties; amends the chapter table of sections; and makes the new section applicable to cases pending on or after enactment. The retroactivity clause means pending enforcement efforts must be tested against the new standard, producing immediate practical effect.
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Every bill creates winners and losers. Here's who stands to gain and who bears the cost.
Who Benefits
- U.S. companies and individuals who acted to comply with U.S. sanctions — they gain a federal shield against foreign‑sourced judgments or arbitral awards that would otherwise be enforced in the U.S., reducing exposure to liability for sanction‑compliance decisions.
- Banks and financial institutions processing transactions subject to sanction restrictions — the statute reduces the chance that foreign courts can use monetary awards to reach assets or compel compliance through U.S. enforcement mechanisms.
- U.S. contractors and exporters who altered performance or refused transactions because of sanctions — they can point to a statutory bar when facing enforcement attempts tied to those decisions.
- The U.S. government and agencies enforcing sanctions — the bill preserves executive authority and clarifies that private enforcement in the U.S. will not undercut foreign policy tools used by the executive branch.
- Defense counsel for U.S. defendants in sanction‑related enforcement cases — obtains a straightforward procedural route (removal + dismissal) to neutralize many foreign enforcement attempts.
Who Bears the Cost
- Foreign plaintiffs and judgment creditors (including Russian entities or their claimants) — lose a key venue for collecting awards when those awards are connected to sanctions‑related conduct, shrinking enforceable remedies.
- Arbitration claimants and arbitration institutions — awards rendered abroad that rely in part on jurisdictional theories tied to U.S. sanctions may become effectively unenforceable in the U.S., reducing the practical value of awards for claimants.
- Insurers and trade credit providers who underwrite sanction‑related commercial risk — face higher claims uncertainty and potential premium increases because recovery through U.S. courts is limited.
- U.S. firms operating abroad — may see foreign courts impose judgments against them that cannot be remedied in the U.S., increasing counterparty risk and potentially prompting contractual and pricing changes.
- Foreign investors and litigation funders pursuing recovery through hostile foreign forums — encounter reduced ability to realize value from foreign awards via U.S. enforcement, potentially curtailing cross‑border litigation financing.
Key Issues
The Core Tension
The bill resolves the real problem of foreign judgments being used to punish U.S. persons for following U.S. sanctions by removing U.S. enforcement, but in doing so it sacrifices predictability and cross‑border enforceability—protecting one set of actors (U.S. sanction‑compliant parties) while undermining the value of the international judgment-and-arbitration system that many commercial actors rely on.
The statute creates important implementation questions and trade‑offs. First, courts must decide how to prove the causal link: what does it mean for the ‘underlying conduct or circumstances’ to have 'resulted from actions to comply' with sanctions?
The bill does not set a burden of proof or define a temporal or causal threshold, so fact-intensive inquiries into contract performance, timing of sanctions, and the decision‑making behind nonperformance will land on judges and generate litigation over evidentiary standards. That invites satellite litigation before the mandatory‑dismissal rule applies and raises the risk of inconsistent fact‑finding between foreign and U.S. courts.
Second, the statute intentionally treads into international comity and treaty territory. By limiting enforcement of foreign judgments and arbitral awards—even where the foreign tribunal reached a contrary conclusion—the law could clash with U.S. obligations under the New York Convention and provoke reciprocal measures.
The carve-outs for U.S. forum choice and for certain victim‑oriented statutes mitigate some risks, but the broad definition of covered sanctions actions and the retroactive application to pending cases create immediate friction with existing arbitral strategies and enforcement expectations. Finally, because the bill preempts enforcement across both federal and state courts, it shifts the burden of determining exceptions and scope to the federal judiciary without allocating resources or guidance to coordinate with OFAC and other agencies, potentially producing uneven application across circuits.
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