H.R. 5632 — PEACE Act

This section establishes 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.

This section defines 11 terms for purposes of the Act: (1) agricultural commodity, as given in 7 U.S.C. 5602; (2) appropriate congressional committees, meaning the House Committee on Foreign Affairs and Senate Committee on Foreign Relations; (3) foreign person, meaning any individual or entity that is not a United States person; (4) good, meaning any article, natural or man-made substance, material, supply, or manufactured product (including inspection and test equipment, excluding technical data); (5) hostile action, meaning an act of military aggression by a country resulting in significant loss of life, disabling of military systems or infrastructure, or material breach of another country's sovereignty; (6) immediate family members, as given in 8 U.S.C. 1201(b)(2)(A)(i); (7) knowingly, meaning a person has actual knowledge or should have known of the conduct, circumstance, or result; (8) medical device, as given for "device" in 21 U.S.C. 321; (9) medicine, as given for "drug" in 21 U.S.C. 321; (10) military aggression, meaning deliberate initiation of armed force or coercive military conduct by a country (not in response to an armed attack) reasonably expected to cause substantial harm to another country's territorial integrity or sovereignty; and (11) United States person, meaning a U.S. citizen, lawful permanent resident, U.S.-organized entity (including foreign branches), or any person within the United States.

This section requires the President, upon determining that Azerbaijan has engaged in hostile actions against Armenia, to certify Congress immediately and impose sanctions as follows: (1) blocking all property and interests in property in U.S. jurisdiction and rendering inadmissible/revoking visas for senior Azerbaijani government officials responsible for such actions (or their immediate family), Azerbaijani military units/civilian agencies involved, and foreign persons who knowingly aided or facilitated those actions; and (2) beginning 60 days after certification, prohibiting the opening or imposing strict conditions on U.S. correspondent or payable-through accounts for foreign financial institutions that knowingly conducted significant transactions with Azerbaijani financial institutions designated by Treasury for facilitating Azerbaijani petroleum or petroleum products trade (with Treasury required to publish relevant lists, exceptions for agricultural commodities/food/medicine/medical devices, delayed applicability to foreign central banks until 180 days after certification, and a conditional exemption for certain bilateral trade). This section further authorizes the President to impose the property-blocking and visa sanctions on any person whom the Secretary of State determines has knowingly attempted to delay or thwart a peace agreement during implementation of the Joint Declaration signed by Armenia and Azerbaijan on August 8, 2025.

This section establishes exceptions to the sanctions described in section 4 for (1) any activity subject to reporting requirements under title V of the National Security Act of 1947 (50 U.S.C. 3091 et seq.) or authorized U.S. intelligence activities; (2) admission of an alien to the United States as required by U.S. obligations under the UN Headquarters Agreement of 1947, the Vienna Convention on Consular Relations of 1963, or other applicable international obligations; (3) transactions for the sale of agricultural commodities, food, medicine, or medical devices to Azerbaijan or for humanitarian assistance to the people of Azerbaijan (including related financial transactions or transportation of necessary goods or services); and (4) sanctions on the importation of goods. The section further authorizes the President to waive such sanctions with respect to any person upon a determination that the waiver is in the U.S. national interest, with a report to the appropriate congressional committees justifying the waiver.

This section authorizes the President to terminate sanctions with respect to (1) any person who has taken genuine and verifiable steps to end participation in or facilitation of hostile actions against Armenia for at least one year after sanctions are imposed under section 4 and whom the President determines poses no substantial risk of re-engaging in such actions for at least one year thereafter; and (2) any foreign financial institution upon the President's certification that Azerbaijan has ceased all hostile actions against Armenia for at least one year after sanctions are imposed under section 4. It further authorizes the President, upon such certification for a foreign financial institution, to release any funds owed to Azerbaijan but previously credited to an account under section 4(d)(5), with a report to appropriate congressional committees required within 15 days after release. Additionally, at least 15 days prior to terminating sanctions on a person, the President must report to appropriate congressional committees on the person's name and nationality, prior hostile actions, steps taken to cease involvement, and determination of no re-engagement risk.

This section requires the President to submit reports to the appropriate congressional committees on two matters. (1) Not later than 30 days after enactment and every 90 days thereafter, a determination as to whether Azerbaijan has engaged in hostile actions against Armenia's sovereign territory (in unclassified form, with a possible classified annex). (2) Not later than one year after sanctions imposition under this Act and annually thereafter, the status of those sanctions, including their effectiveness.

This section provides a severability clause stating that if any provision of the Act, or its application, is held invalid, the remainder of the Act and the application of that provision to other persons or circumstances remains unaffected.