H.R. 4346 — Preventing the Escalation of Armed Conflict in Europe Act of 2025 (PEACE Act of 2025)

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What It Does

This bill attempts to pressure Russia into a ceasefire with Ukraine by weaponizing access to the U.S.

financial system and seizing Russian sovereign assets held in the United States. It was introduced by a bipartisan pair — Rep. Nunn (R-IA) and Rep. Gottheimer (D-NJ) — and explicitly frames itself as implementing the kind of banking sanctions President Trump himself publicly called for in March 2025 but had not yet imposed.

Requires the Secretary of the Treasury to issue regulations within 180 days prohibiting or placing strict conditions on U.S. correspondent/payable-through accounts for foreign banks that knowingly provide significant financial services to sanctioned Russian entities, Russian energy-sector operators, or institutions blocked under existing Executive Order 14024 directives

Targets foreign financial institutions — not just Russian ones — that serve as conduits for sanctioned Russian entities, including banks in China, India, Turkey, UAE, and other third countries that have continued trading with Russia

Requires Treasury, within 90 days, to report to Congress determining whether Gazprom, Rosneft, and Lukoil qualify as Russian energy-sector operators subject to sanctions under Section 3(a)(4)

Mandates seizure and transfer of covered Russian sovereign assets held by U.S. financial institutions — specifically assets of the Central Bank of Russia, Russian National Wealth Fund, and Russian Ministry of Finance — within 90 days, depositing proceeds into the existing Ukraine Support Fund (established under the REPO for Ukrainians Act) for reconstruction or defense articles

Sets civil penalties up to $377,700 or twice the transaction value, and criminal penalties up to $1,000,000 and 20 years imprisonment for willful violations

Grants the President a renewable 180-day waiver authority on both the financial institution sanctions and the asset seizure, requiring a written report to Congress justifying each waiver

Sunsets automatically 5 years after enactment, or 30 days after the President certifies Russia has ceased destabilizing Ukraine — whichever comes first

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Who Benefits

• Ukraine — receives direct material benefit through defense articles and reconstruction funds derived from seized Russian sovereign assets • U.S.

financial institutions with legitimate Russia-related compliance exposure — a clear statutory framework reduces ambiguity about what is required

European allies — secondary sanctions pressure on third-country banks reduces Russia's ability to circumvent Western sanctions through non-Western intermediaries

U.S. defense contractors — Ukraine Support Fund can be used to purchase defense articles, creating a procurement channel

Members of Congress pushing for a harder U.S. line on Russia — bill gives legislative teeth to what the executive branch has so far only threatened rhetorically

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Who Gets Hurt

• Foreign banks in China, India, Turkey, UAE, and other non-sanctioning countries that currently process Russia-related transactions — face exclusion from U.S.

dollar correspondent banking if they don't cut off Russian clients

Russian energy sector — Gazprom, Rosneft, and Lukoil face direct determination of sanctions eligibility within 90 days; downstream effect on global energy supply chains

U.S. companies with residual licensed Russia-related business — secondary sanctions pressure raises compliance costs and counterparty risk

Global commodity markets — potential supply disruptions if Russian energy exports are further squeezed through third-country bank exclusions

Russian sovereign wealth — the Central Bank of Russia, National Wealth Fund, and Ministry of Finance assets held in the U.S. are subject to mandatory confiscation, not merely freezing

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Hidden Riders

Section 6 authorizes outright seizure and permanent transfer (not just freezing) of Russian sovereign assets to a third party — this is a legally and diplomatically significant escalation from the existing REPO for Ukrainians Act, which authorized reporting and freezing, and it raises unresolved questions under international law about seizing sovereign central bank assets

The Ukraine Support Fund transfer authority explicitly includes purchase of 'defense articles for the Government of Ukraine' — this is a new and separate spending authorization that bypasses normal foreign military assistance appropriations processes

The waiver in Section 6(b) caps cumulative waivers at 1 year total, but the waiver in Section 5 (financial institution sanctions) has no cumulative cap — the President could theoretically roll over 180-day waivers on sanctions indefinitely while the asset seizure provision remains harder to waive away

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Framing Analysis

Titled the 'PEACE Act' — the mechanism is financial warfare and asset confiscation, not a peace negotiation framework; there is no diplomatic engagement component, no mediation structure, and no incentive for Russia beyond the threat of economic pain

Findings section (Sec. 2) extensively quotes President Trump calling for banking sanctions and criticizing Putin — frames the bill as implementing Trump's own stated policy, strategically making it politically difficult for Republicans to oppose; whether the administration actually wants Congress to mandate what it has chosen not to do unilaterally is a different question

Described as 'securing a peaceful resolution' — the bill's enforcement mechanism (secondary sanctions on third-country banks) has historically been one of the most aggressive and friction-generating tools in U.S. sanctions policy, risking retaliation from major trading partners like India and China

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Red Flags

• Mandatory asset seizure of Russian sovereign property (Sec.

6) raises serious international law questions — sovereign immunity doctrines and customary international law have historically protected central bank assets from confiscation; the U.S. has never done this to a major economy and litigation risk is substantial

⚑Secondary sanctions on foreign banks (Sec. 3) could provoke retaliatory moves by China, India, and others to accelerate de-dollarization — the bill contains no analysis of this systemic risk to U.S. financial dominance

⚑The 90-day timeline for Treasury to seize sovereign assets and the 180-day timeline for financial institution regulations are operationally aggressive — Treasury's OFAC would need to identify, value, and legally process assets on a timetable that may be faster than due process allows

⚑'Significant financial services' in Sec. 3(a) is not defined in the bill — Treasury has discretion to define this, creating regulatory uncertainty for any foreign bank with any Russia exposure

⚑Waiver authority in Sec. 5 has no cumulative cap, meaning the President can indefinitely defer the sanctions on foreign financial institutions with renewable 180-day waivers; this potentially transforms a mandatory congressional directive into an advisory one

⚑The bill sunsets in 5 years (Sec. 7) but the transferred and spent assets cannot be returned — the sunset only stops future enforcement, not permanent disposition of already-seized Russian property

⚑'Defense articles' purchase authorization in Sec. 6(b) is written as a purpose of the Ukraine Support Fund without an appropriations ceiling or oversight mechanism beyond the existing REPO Act framework, which was not originally designed for ongoing military procurement

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Current Status

H.R.

4346 was introduced in the U.S. House of Representatives on July 10, 2025, referred to the House Committee on Financial Services, and reported out of committee with an amendment on October 3, 2025 (Report No. 119-324). It has been committed to the Committee of the Whole House on the State of the Union and ordered printed, meaning it is awaiting floor action in the House. It has not passed the full House, been considered by the Senate, or been signed into law.

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