PEACE Act
The Preventing Escalation and Advancing Caucasus Engagement Act (PEACE Act) would authorize the President to respond to renewed Azerbaijani aggression against Armenia with targeted sanctions. If the President determines Azerbaijan has engaged in hostile actions, the bill requires a formal certification to Congress and imposes sanctions on designated Azerbaijani officials, military units, and foreign individuals or entities that aided or participated in such actions. It also authorizes sanctions on foreign financial institutions that knowingly transact with Azerbaijani banks involved in petroleum trade, with extensive licenses for humanitarian and certain ordinary trade activities. The bill emphasizes supporting Armenia’s sovereignty and a negotiated peace, while pressuring Azerbaijan to reduce malign Russian influence and advance a lasting settlement. It includes waivers, a sunset (7 years), and a framework for reporting and potential termination of sanctions if progress toward peace is made. Key provisions frame sanctions as tools to deter force and promote negotiations, while creating detailed definitions to guide implementation and carve-outs for humanitarian aid and essential trade. A central aim is to incentivize direct Armenia–Azerbaijan talks toward a durable peace, with ongoing oversight by Congress and periodic assessments of effectiveness.
Key Points
- 1Sanctions trigger and targets: The President must certify that Azerbaijan engaged in hostile actions against Armenia, then impose sanctions on (a) senior Azerbaijani officials and their immediate family members, (b) Azerbaijani military units or civilian agencies involved in hostile actions, and (c) foreign persons who knowingly aided such actions.
- 2Financial sanctions and oil-trade focus: The Act authorizes blocking property and visa bans for those designated, and, starting 60 days after certification, sanctions on foreign financial institutions that knowingly transacted with Azerbaijani banks designated by Treasury for facilitating Azerbaijani oil/petroleum trade. There are specific lists to be published by Treasury and several exceptions, including humanitarian and certain trade.
- 3Humanitarian and other exceptions: The bill provides exemptions for humanitarian aid, the sale of agricultural commodities, food, medicine, and medical devices, and permits certain central-bank and petroleum-related transactions under defined conditions. It also preserves obligations and activities related to United Nations/consular operations.
- 4Additional sanctions tied to peace progress: If someone knowingly tries to delay or thwart the Aug. 8, 2025 Joint Declaration on peace between Armenia and Azerbaijan, the President may impose additional sanctions on that person.
- 5Waivers, termination, and reporting: The President can waive sanctions for national-interest reasons with Congressional notification. Sanctions can be terminated for individuals who take verifiable steps to end hostile actions for at least a year, and for foreign financial institutions once Azerbaijan ceases hostile actions for at least a year. The bill mandates regular reporting to Congress (initially within 30 days, then every 90 days; annual reviews on effectiveness) and imposes a 7-year sunset. Severability ensures the rest of the law stands if a provision is struck down.