financial institution designated by the Secretary of 
the Treasury to have facilitated the trade of Azer-
baijani 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 fi-
nancial institutions subject to prohibitions or 
conditions pursuant to paragraph (1). 
(3) EXCEPTION FOR SALES OF AGRICULTURAL 
COMMODITIES, FOOD, MEDICINE, AND MEDICAL DE-
VICES.—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 med-
ical devices to Azerbaijan. 
(4) APPLICABILITY
OF
SANCTIONS
WITH
RE-
SPECT
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 
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petroleum or petroleum products to or from Azer-
baijan 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
SANC-
TIONS
WITH
RESPECT
TO
PETROLEUM
TRANS-
ACTIONS.—Sanctions imposed pursuant to para-
graph (1) shall not apply with respect to a financial 
transaction conducted or facilitated by a foreign fi-
nancial institution if— 
(A) the financial transaction is only for 
trade in goods or services between the country 
with primary jurisdiction over the foreign finan-
cial institution and Azerbaijan; and 
(B) any funds owed to Azerbaijan as a re-
sult of such trade are credited to an account lo-
cated 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 
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sanctions described in subsection (c) of this section 
against that person. 
SEC. 5. FURTHER EXCEPTIONS TO SANCTIONS AND WAIV-
ER. 
(a) EXCEPTIONS.—The sanctions described in section 
4 shall not apply to the following: 
(1) Any activity subject to the reporting re-
quirements under title V of the National Security 
Act of 1947 (50 U.S.C. 3091 et seq.), or to any au-
thorized 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 be-
tween 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, medi-
cine, or medical devices to the Republic of Azer-
baijan or for the provision of humanitarian assist-
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ance to the people of the Republic of Azerbaijan, in-
cluding engaging in a financial transaction relating 
to humanitarian assistance or for humanitarian pur-
poses or transporting goods or services that are nec-
essary to carry out operations relating to humani-
tarian 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. 
SEC. 6. 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 
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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 ac-
tions against the Republic of Armenia for a pe-
riod of not less than one year after the applica-
tion of sanctions under section 4; and 
(2) any foreign financial institution upon the 
President’s certification that the Republic of Azer-
baijan has ceased all hostile actions against the Re-
public 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 certifi-
cation under subsection (a)(2) with respect to a for-
eign financial institution, the President may author-
ize the release of any funds to Azerbaijan which 
were owed but had been instead credited to an ac-
count pursuant to section 4(d)(5). 
(2) REPORT.—Not later than 15 days after the 
date on which funds have been released to Azer-
baijan under this subsection, the President shall 
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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 fa-
cilitation of hostile actions against the Republic of 
Armenia; and 
(4) the President’s determination that the per-
son does not pose a substantial risk of re-engaging 
in hostile actions against the Republic of Armenia. 
SEC. 7. 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 
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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 ef-
fectiveness of the sanctions. 
SEC. 8. SUNSET. 
The provisions of this Act shall expire on the date 
that is 7 years after the date of the enactment of this 
Act. 
SEC. 9. SEVERABILITY. 
If any provision of this Act, or the application there-
of, is held invalid, the remainder of this Act and the appli-
cation of such provision to other persons or circumstances 
shall not be affected thereby. 
Æ 
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