New Act Shields U.S. Businesses from Foreign Lawsuits Over Sanctions Compliance

The newly proposed Protecting Americans from Russian Litigation Act of 2025 is essentially a legal firewall designed to shield U.S. persons and companies from getting sued abroad just for following Uncle Sam’s rules. The core idea, laid out in Section 2, is simple: If you comply in good faith with U.S. sanctions or export controls—say, by cutting ties with a sanctioned Russian entity—you should not be penalized for it, especially by foreign courts.

The Legal No-Fly Zone for Foreign Judgments

Section 3 is where the rubber meets the road, creating a massive change in how U.S. courts handle international disputes related to sanctions. If a foreign court or arbitration panel issues a ruling against a U.S. company because that company complied with U.S. sanctions, that foreign judgment is now dead on arrival in the United States. You can’t bring a lawsuit in a state or federal court here to enforce it.

Think of it this way: A U.S. tech company pulls out of a contract with a foreign partner because that partner gets hit with U.S. sanctions. The foreign partner sues and wins a judgment in their local court for breach of contract. Under this Act, the U.S. company can easily get that enforcement lawsuit thrown out of a U.S. court. This drastically reduces the legal and financial risk for any U.S. entity—from a massive oil company to a small software firm—that operates internationally and has to make tough compliance decisions.

Who Gets the Protection and Who Doesn’t

This Act isn't a blanket pass, though. It’s highly specific about what it blocks and what it leaves alone. Importantly, it doesn't touch lawsuits filed by victims of international terrorism, torture, or other serious abuses (Section 3). So, the rights of people seeking justice against bad actors remain protected, often under existing laws like those related to state sponsors of terrorism. It also doesn't affect contracts where both parties already agreed to settle disputes exclusively through U.S. courts or arbitration.

However, the bill explicitly states that “United States sanctions” do not include tariffs or duties on imported goods. This means if a foreign entity gets a judgment against a U.S. company related to a trade dispute over tariffs, this new law won't help block the enforcement of that judgment. It's a precise tool aimed squarely at protecting national security and foreign policy compliance, not general trade protectionism.

The Real-World Impact: Less Risk, More Certainty

For the average person working for a multinational company, this bill offers a layer of legal certainty. When U.S. policy dictates that your company must sever ties with a foreign client due to sanctions, this law ensures that the legal fallout stays outside the U.S. judicial system. It’s designed to make U.S. sanctions more effective by eliminating the financial penalty for compliance.

On the flip side, this introduces complexity for foreign plaintiffs. If they win a legitimate judgment against a U.S. entity abroad, they lose a crucial avenue for collecting that money if the judgment is deemed to be “affected by” U.S. sanctions. The law is written broadly enough—stating the foreign decision just has to be “based on” compliance—that there could be courtroom fights over how tangential the link to U.S. sanctions actually is. This is where the legal fine print will matter most, as U.S. courts will have to decide exactly how much a foreign judgment needs to hinge on sanctions compliance to be blocked under this new rule.