Lawmakers warn banks on Russian diesel

Bipartisan lawmakers sent letters to major US banks and port authorities on Tuesday, cautioning them against facilitating the arrival of Russian diesel. The correspondence warns that companies involved in financing, transporting, or unloading the fuel could face civil and criminal investigations. This move challenges President Donald Trump's recent decision to ease sanctions restrictions on Russian fuel imports.

The letters were addressed to chief executives at institutions including Goldman Sachs. They also went to port authorities in Houston, Corpus Christi, and Beaumont in Texas, as well as the New York/New Jersey region. Signatories include Senators Jeanne Shaheen, Ron Wyden, Sheldon Whitehouse, Chris Coons, Elizabeth Warren, and outgoing Senator Thom Tillis. Representative Gregory Meeks, the top Democrat on the House Foreign Affairs Committee, also signed. The group argued that current imports may violate federal law and provide Moscow with revenue to fund its war in Ukraine.

The dispute stems from a deal announced by President Trump on October 9. Under the arrangement, Russia will supply hundreds of thousands of metric tons of diesel to the United States. The Treasury Department issued General License 135, a six-month exemption from certain sanctions. Trump stated that Russia would initially deliver more than 300,000 metric tons. He projected 500,000 tons would arrive in November, followed by 1 million tons. A further 3 million tons may follow, depending on the state of Russian refineries.

The lawmakers urged companies to preserve all records dating back to September 1. This includes contracts, shipping documents, payment records, and communications with suppliers. Recipients were asked to confirm by October 28 that they had done so. They were also asked to state whether they knew of any proposed or actual imports. Vessel-tracking data cited in the letters suggests ships could reach Beaumont and New York/New Jersey as early as the end of October.

The legal core of the dispute involves whether the licensing action fits restrictions set by Congress. The lawmakers pointed to the Ending Importation of Russian Oil Act of 2022. That law generally bars imports of Russian energy products unless the president certifies that Russia has ceased hostilities. They also cited Section 216 of the Countering America's Adversaries Through Sanctions Act. This section requires congressional review of certain licensing actions, a step the administration skipped. The White House maintains the action is lawful and consistent with earlier decisions by the Office of Foreign Assets Control. Spokesperson Taylor Rogers called the effort politically motivated.

Representative Jamie Raskin, the top Democrat on the House Judiciary Committee, sent a separate warning to fuel-industry associations. He stated that importers could face penalties of up to 20 years in prison. Raskin said companies could be held accountable whether in the current administration or the next. The letters do not allege that any specific company has committed a crime.

Experts offer mixed views on the practical impact. Michael Wain of Akin said General License 135 substantially reduces US sanctions risk for foreign firms staying within its terms. However, he noted they must still weigh British and European Union sanctions. Glen Howard of the Saratoga Foundation said the letters could prompt major banks to freeze financing efforts. Rachel Ziemba of the Center for a New American Security called the episode mostly diplomatic theater. She expects most cargoes to go outside the United States, possibly to other markets in the Americas.

Russia began granting exemptions to its diesel export ban on October 1 to allow shipments under the arrangement. Industry sources report that Russian diesel output fell from about 175,000 tons a day in September to 160,000 tons a day in the first half of October. Output recovered toward 180,000 tons a day after new export quotas were set. Democrats could gain additional investigative powers if they win control of one or both chambers in the November midterm elections.