S. 2904, Sanctioning Harborers and Dodgers of Western Sanctions Act of 2026

S. 2904 would authorize the appropriation of $260 million over the 2026-2027 period to assist Ukraine and other allies and to increase the capacity of the Departments of State and the Treasury to administer sanctions on Russia. The bill also would require the President to impose sanctions on foreign persons involved in Russian energy projects, in the Russian defense industrial base, and in shipping Russian petroleum products. Finally, S. 2904 could affect the timing of foreign military sales and direct commercial sales of defense articles and services to Ukraine.

The costs of the legislation, detailed in Table 1, fall within budget functions 150 (international affairs) and 800 (general government).

Spending Subject to Appropriation

S. 2904 would authorize the appropriation of the following amounts for 2026 and 2027:

• A total of $200 million for assistance to Ukraine and other allies threatened by Russia;
• $15 million annually to increase staffing and resources for the Office of Sanctions Coordination in the Department of State; and
• $15 million annually to increase staffing and resources for the Office of Foreign Assets Control in the Department of the Treasury.

Altogether, CBO estimates that implementing S. 2904 would cost $234 million over the 2026-2031 period. Such spending would be subject to the appropriation of the specified amounts.

Direct Spending and Revenues

S. 2904 would require the President to impose sanctions on certain foreign persons. In addition, the bill could affect certain sales of defense articles and services to Ukraine. Enacting S. 2904 would have insignificant effects on direct spending and revenues, and would, on net, reduce deficits by less than $500,000 over the 2026‑2036 period, CBO estimates.

Sanctions. S. 2904 would require the President to impose sanctions on foreign persons who are involved in Russian energy projects, in the Russian defense industrial base, or in shipping Russian petroleum products.

The Administration has existing authority to impose such sanctions. If enactment of S. 2904 leads the Administration to broaden the application of currently authorized sanctions, additional persons would be subject to sanctions. More people would be denied visas by the Department of State, resulting in an insignificant decrease in revenues from fees. Although most visa fees are retained by the Department of State and spent, some collections are deposited into the Treasury as revenues. Denying foreign nationals entry into the United States also would reduce direct spending on federal benefits (emergency Medicaid or federal subsidies for health insurance, for example) for which those people might otherwise be eligible.

In addition, the bill would block transactions involving certain assets and property that are in the United States or that come under the control of people in the United States. People who violate those sanctions would be subject to civil or criminal monetary penalties. Those penalties are recorded as revenues, and a portion can be spent without further appropriation.

Using data about similar sanctions, CBO estimates any additional sanctions would affect a small number of people; thus, imposing them would have insignificant effects on revenues and direct spending, and would, on net, reduce deficits by less than $500,00 over the 2026- 2036 period.

Sales of Defense Articles. Enacting S. 2904 could affect the timing of foreign military sales and direct commercial sales of defense articles and services compared with such activity under current law and thus affect the timing of the collection and spending of associated fees. CBO estimates that the net change in direct spending would be less than $500,000.

Both types of sales affect direct spending. U.S. defense articles and services are exported or transferred to foreign countries through the Foreign Military Sales (FMS) program, which is managed by the Department of Defense. Those countries pay all costs associated with such sales, and the amounts received in the FMS trust fund are available for obligation without further appropriation. Cash flows to and from that trust fund are classified as direct spending. The Department of State manages the Direct Commercial Sales program and requires defense manufacturers, exporters, and brokers of defense articles and services to register with its Directorate of Defense Trade Controls. The directorate charges registration fees and can spend those fees without further appropriation.

Mandates

S. 2904 would impose a private-sector mandate as defined in the Unfunded Mandates Reform Act (UMRA) by expanding the scope of authority for the Administration to regulate transactions between entities in the United States and foreign entities who would be subject to sanctions under the bill. That expansion would result in additional burdens on individuals and entities, such as banks, in the United States that are required to monitor and report on foreign transactions and to block access to certain assets owned by sanctioned entities. The bill also would prohibit transactions between entities in the United States and sanctioned parties that otherwise would be permitted under current law.

The cost of the mandate would be any income or profit lost as a result of the bill’s enactment. CBO expects that because a small number of people or entities would be affected, the loss of income from any incremental increase in restrictions imposed by the bill would be small as well. CBO estimates that the cost of the mandate would fall well below the annual threshold established in UMRA for private-sector mandates ($214 million in 2026, adjusted annually for inflation).

S. 2904 contains no intergovernmental mandates as defined in UMRA.

The CBO staff contacts for this estimate are Sunita D’Monte (for spending subject to appropriation), Caroline Dorminey (for sales of defense articles), Emma Uebelhor (for sanctions), and Lucy Marret (for mandates). The estimate was reviewed by Christina Hawley Anthony, Deputy Director of Budget Analysis.