Short title

This Act may be cited as the

Preventing Escalation and Advancing Caucasus Engagement Act

or the

PEACE Act

Statement of policy

It is the policy of the United States to— (1)support the sovereignty, territorial integrity, and independence of the Republic of Armenia and the Republic of Azerbaijan; (2)support direct negotiations between the governments of the Republic of Armenia and the Republic of Azerbaijan to conclude a comprehensive, fair, and durable peace agreement between the two countries; (3)utilize sanctions and related measures to deter the use of force as an alternative to constructive negotiations; and (4)welcome and support initiatives of the Armenian Government, led by Prime Minister Nikol Pashinyan, to secure a long-standing peace agreement with the Republic of Azerbaijan, expel malign Russian influence from the Republic of Armenia, and strengthen ties between the Republic of Armenia and the United States.

Definitions

In this Act— (1)the term agricultural commodity has the meaning given such term in section 102 of the Agricultural Trade Act of 1978 (7 U.S.C. 5602); (2)the term appropriate congressional committees means— (A)the Committee on Foreign Affairs of the House of Representatives; and (B)the Committee on Foreign Relations of the Senate; (3)the term foreign person means any individual or entity that is not a United States person; (4)the term good means any article, natural or man-made substance, material, supply, or manufactured product, including inspection and test equipment and excluding technical data; (5)the term hostile action means an act of military aggression taken by a country that results in significant loss of life, the disabling of military systems, materiel, or personnel, the incapacitation of major utility or transportation infrastructure, or a material breach of another country’s sovereignty, territorial integrity, or political independence; (6)the term immediate family members has the meaning given the term immediate relatives in section 201(b)(2)(A)(i) of the Immigration and Nationality Act (8 U.S.C. 1201(b)(2)(A)(i)); (7)the term knowingly, with respect to conduct, a circumstance, or a result, means that a person has actual knowledge, or should have known, of the conduct, the circumstance, or the result; (8)the term medical device has the meaning given the term device in section 201 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 321); (9) the term medicine has the meaning given the term drug in section 201 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 321); (10)the term military aggression means the deliberate initiation of armed force or other coercive military conduct by a country, not undertaken in response to an armed attack, that is reasonably expected to cause substantial harm to the territorial integrity and sovereignty of another country; and (11)the term United States person means— (A)a United States citizen or an alien lawfully admitted for permanent residence to the United States; (B)an entity organized under the laws of the United States or any jurisdiction within the United States, including a foreign branch of such an entity; or (C)any person within the United States.

Imposition of sanctions

(a)

In general

If the President determines that the Republic of Azerbaijan has engaged in hostile actions against the Republic of Armenia, the President— (1)shall immediately issue a certification to Congress to that effect; and (2)upon issuance of such certification— (A)shall impose against each person described in subsection (b) the sanctions described in subsection (c); and (B)shall impose sanctions against foreign financial institutions as described in subsection (d). (b)

Persons described

A person described in this subsection is any person that— (1)is— (A)a senior Azerbaijani Government official responsible for the policy and operations of branches of the Azerbaijani Government directly involved in hostile actions against the Republic of Armenia; or (B)an immediate family member of an individual described in subparagraph (A); (2)is an Azerbaijani military unit or civilian agency that has engaged in hostile actions against the Republic of Armenia; or (3)is a foreign person that has substantially and knowingly aided, abetted, taken part in, or otherwise facilitated hostile actions taken by persons described in paragraph (1) or (2) against the Republic of Armenia. (c)

Sanctions on persons described

The sanctions described in this subsection are the following: (1)

Blocking of property

The President shall exercise all of the powers granted to the President under the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.) to the extent necessary to block and prohibit all transactions in property and interests in property of the foreign person if such property and interests in property are in the United States, come within the United States, or are or come within the possession or control of a United States person. (2)

Ineligibility for visas, admission, or parole

(A)

Visas, admission, or parole

An alien described in subsection (a) is— (i)inadmissible to the United States; (ii)ineligible to receive a visa or other documentation to enter the United States; and (iii)otherwise ineligible to be admitted or paroled into the United States or to receive any other benefit under the Immigration and Nationality Act (8 U.S.C. 1101 et seq.). (B)

Current visas revoked

(i)

In general

An alien described in subsection (a) is subject to revocation of any visa or other entry documentation regardless of when the visa or other entry documentation is or was issued. (ii)

Immediate effect

A revocation under clause (i) shall take effect immediately and automatically cancel any other valid visa or entry documentation that is in the alien’s possession. (d)

Imposition of sanctions with respect to foreign financial institutions

(1)

In general

Except as specifically provided in this subsection, beginning on the date that is 60 days after the President’s certification to Congress under this section, the President shall prohibit the opening, and prohibit or impose strict conditions on the maintaining, in the United States of a correspondent account or a payable-through account by a foreign financial institution that the President determines has knowingly conducted or facilitated any significant financial transaction with any Azerbaijani financial institution designated by the Secretary of the Treasury to have facilitated the trade of Azerbaijani petroleum or petroleum products. (2)

Designation

The Secretary of the Treasury shall— (A)publish a list of Azerbaijani financial institutions determined to have facilitated the trade of Azerbaijani petroleum or petroleum products; and (B)publish a list of designated foreign financial institutions subject to prohibitions or conditions pursuant to paragraph (1). (3)

Exception for sales of agricultural commodities, food, medicine, and medical devices

The President may not impose sanctions under paragraph (1) with respect to any person for conducting or facilitating a transaction for the sale of agricultural commodities, food, medicine, or medical devices to Azerbaijan. (4)

Applicability of sanctions with respect to foreign central banks

Except as provided in paragraph (5), sanctions imposed under paragraph (1) shall apply with respect to a central bank of a foreign country, only insofar as it engages in a financial transaction for the sale or purchase of petroleum or petroleum products to or from Azerbaijan conducted or facilitated on or after that date that is 180 days after the President’s certification to Congress under this section. (5)

Conditional exemption from sanctions with respect to petroleum transactions

Sanctions imposed pursuant to paragraph (1) shall not apply with respect to a financial transaction conducted or facilitated by a foreign financial institution if— (A)the financial transaction is only for trade in goods or services between the country with primary jurisdiction over the foreign financial institution and Azerbaijan; and (B)any funds owed to Azerbaijan as a result of such trade are credited to an account located in the country with primary jurisdiction over the foreign financial institution. (e)

Additional sanctions

If, at any time during the implementation of Joint Declaration signed on August 8, 2025, by Armenia and Azerbaijan, the Secretary of State determines that a person has knowingly attempted to delay, frustrate, or thwart the successful conclusion of a peace agreement consistent with the principles of such Joint Declaration, the President may impose one or more sanctions described in subsection (c) of this section against that person.

Further exceptions to sanctions and waiver

(a)

Exceptions

The sanctions described in section 4 shall not apply to the following: (1)Any activity subject to the reporting requirements under title V of the National Security Act of 1947 (50 U.S.C. 3091 et seq.), or to any authorized intelligence activities of the United States. (2)The admission of an alien to the United States if such admission is necessary to comply with United States obligations under the Agreement between the United Nations and the United States of America regarding the Headquarters of the United Nations, signed at Lake Success June 26, 1947, and entered into force November 21, 1947, or under the Convention on Consular Relations, done at Vienna April 24, 1963, and entered into force March 19, 1967, or other applicable international obligations of the United States. (3)The conduct or facilitation of a transaction for the sale of agricultural commodities, food, medicine, or medical devices to the Republic of Azerbaijan or for the provision of humanitarian assistance to the people of the Republic of Azerbaijan, including engaging in a financial transaction relating to humanitarian assistance or for humanitarian purposes or transporting goods or services that are necessary to carry out operations relating to humanitarian assistance or humanitarian purposes. (4)The requirement to block and prohibit all transactions in all property and interests in property under this Act shall not include the authority or a requirement to impose sanctions on the importation of goods. (b)

Waiver

The President may waive application of sanctions described in section 4 with respect to a person if the President— (1)determines that the waiver is in the national interests of the United States; and (2)submits to the appropriate congressional committees a report on the waiver and the reasons for the waiver.

Termination

(a)

In general

The President may terminate the application of such sanctions with respect to— (1)any person that— (A)has taken genuine and verifiable steps to end their participation in or facilitation of hostile actions against the Republic of Armenia for a period of not less than one year after the application of sanctions under section 4; and (B)the President determines does not pose a substantial risk of re-engaging in hostile actions against the Republic of Armenia for a period of not less than one year after the application of sanctions under section 4; and (2)any foreign financial institution upon the President’s certification that the Republic of Azerbaijan has ceased all hostile actions against the Republic of Armenia for a period of not less than one year after the application of sanctions under section 4. (b)

Release of credited funds

(1)

In general

Upon a Presidential certification under subsection (a)(2) with respect to a foreign financial institution, the President may authorize the release of any funds to Azerbaijan which were owed but had been instead credited to an account pursuant to section 4(d)(5). (2)

Report

Not later than 15 days after the date on which funds have been released to Azerbaijan under this subsection, the President shall transmit to appropriate congressional committees a report on the release of such funds. (c)

Report

Not later than 15 days prior to the termination of sanctions with respect to a person under subsection (a), the President shall submit a report to the appropriate congressional committees that includes— (1)the name and nationality of the person against whom sanctions are being terminated; (2)the hostile actions previously committed or facilitated by such person that led to the imposition of sanctions against the person; (3)the genuine and verifiable steps taken by the person to end the person’s participation in or facilitation of hostile actions against the Republic of Armenia; and (4)the President’s determination that the person does not pose a substantial risk of re-engaging in hostile actions against the Republic of Armenia.

Reporting requirements

(a)

Presidential reporting

(1)

In general

Not later than 30 days after the date of the enactment of this Act, and every 90 days thereafter, the President shall submit a report to the appropriate congressional committees that contains a determination as to whether the Republic of Azerbaijan has engaged in hostile actions against the sovereign territory of Armenia. (2)

Form

The report submitted pursuant to paragraph (1) shall be submitted in unclassified form but may contain a classified annex. (b)

Annual review

Not later than one year after the imposition of sanctions pursuant to this Act, and no less frequently than annually thereafter, the President shall submit a report to the appropriate congressional committees describing the status of any sanctions imposed pursuant to section 4, including an assessment of the effectiveness of the sanctions.

Sunset

The provisions of this Act shall expire on the date that is 7 years after the date of the enactment of this Act.

Severability

If any provision of this Act, or the application thereof, is held invalid, the remainder of this Act and the application of such provision to other persons or circumstances shall not be affected thereby.