New Russia sanctions proposed in the Senate could pose severe challenges for financial and energy companies in the U.S. and Europe.

A bipartisan Senate coalition has sought to boost economic pressure on Russia amid growing concerns about the Kremlin’s attempts to influence the midterm elections.

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The bill, from Sens. Lindsey Graham Lindsey Olin GrahamSteele Dossier sub-source was subject of FBI counterintelligence probe Hillicon Valley: Subpoenas for Facebook, Google and Twitter on the cards | Wray rebuffs mail-in voting conspiracies | Reps. raise mass surveillance concerns Key Democrat opposes GOP Section 230 subpoena for Facebook, Twitter, Google MORE (R-S.C.) and Bob Menendez Robert (Bob) MenendezKasie Hunt to host lead-in show for MSNBC's 'Morning Joe' Senators ask for removal of tariffs on EU food, wine, spirits: report VOA visa decision could hobble Venezuela coverage MORE (D-N.J.), seeks to put Putin in an economic vise by limiting foreign investment, business and trade with Russian energy companies and banks.

But there are growing fears among energy firms and investors about the burdens of complying with the sweeping proposed sanctions and over the potential it could hurt their businesses.

Firms that violate the sanctions could face debilitating consequences and risk being frozen out of the U.S. financial system.

Russian officials have called the proposed sanctions a “declaration of economic war,” and the Treasury Department privately warned lawmakers against similar measures earlier this year.

“These sanctions could have a very broad sweeping effect not only on Russian energy companies but also their partners from countries that are key U.S. allies,” said Barbara Linney, a sanctions lawyer at Miller & Chevalier.

Senate committees plan to hold hearings on new Russia sanctions later this summer, but it’s unclear if Republicans have the time or desire to pass the bill before the November elections. The Graham-Menendez proposal could also be watered down before it clears the Senate to assuage concerns from business groups.

Many Republican senators are also skeptical that further sanctions on Russia will halt Putin’s attempts to influence the midterm elections or carry out other acts of aggression.

But the White House and Congress have been eager to prove their mettle in taking on Russia ahead of the November elections, inspiring the new push for sanctions, and building momentum.

Graham and Menendez released what they called a “crushing” sanctions plan with Sens. Cory Gardner Cory Scott GardnerBillionaire who donated to Trump in 2016 donates to Biden The Hill's Morning Report - Sponsored by Facebook - Trump previews SCOTUS nominee as 'totally brilliant' Cook Political Report shifts Colorado Senate race toward Democrat MORE (R-Colo.), Ben Cardin Benjamin (Ben) Louis CardinPelosi hopeful COVID-19 relief talks resume 'soon' Congress must finish work on popular conservation bill before time runs out PPP application window closes after coronavirus talks deadlock MORE (D-Md.), John McCain John Sidney McCainAnalysis: Biden victory, Democratic sweep would bring biggest boost to economy The Memo: Trump's strengths complicate election picture Mark Kelly: Arizona Senate race winner should be sworn in 'promptly' MORE (R-Ariz.) and Jeanne Shaheen Cynthia (Jeanne) Jeanne ShaheenSenate Democrats introduce bill to sanction Russians over Taliban bounties Trump-backed candidate wins NH GOP Senate primary to take on Shaheen Democratic senator urges Trump to respond to Russian aggression MORE (D-N.H.) last month following President Trump Donald John TrumpSteele Dossier sub-source was subject of FBI counterintelligence probe Pelosi slams Trump executive order on pre-existing conditions: It 'isn't worth the paper it's signed on' Trump 'no longer angry' at Romney because of Supreme Court stance MORE’s controversial Helsinki summit with Putin.

“The next step in tightening the screws on the Kremlin,” Menendez said.

Experts say the sanctions go far deeper than previous penalties imposed by the U.S. on Russia and other countries and risk raising tensions with EU allies, despite language calling for the U.S. and EU to be closer.

“It seems to me that this legislation would simply provoke quite the opposite rather than unity and coordination. It would provoke a pretty stern response from the EU,” Linney said.

The bill proposes severe penalties for firms that sell critical oil production equipment to Russian state-owned energy companies or link with Kremlin-connected drillers on joint ventures.

Russia’s government derives about 40 percent of its income from the oil and gas industry. The country is in the top three oil producers worldwide and is dominated by state-owned companies and firms allied with the government.

The legislation would significantly step up existing sanctions on oil and gas that Congress enacted last year, including by making it easier to punish companies when they do business with Russian firms in other countries.

Sanctions that previously only targeted foreign companies that invest in certain types of Russian oil and gas projects would be expanded to other projects as well.

“It’s much, much stronger. It goes much deeper, too. And it even gets personal,” said Gabriel Collins, an energy fellow at Rice University’s Baker Institute for Public Policy.

A number of major oil companies that could be affected, such as such as Exxon Mobil Corp. and Chevron Corp., didn’t return requests for comment on the legislation.

Oil companies have been active in voicing their concerns about Russia sanctions proposals. The industry’s concerns about the impacts of punishing policies ended up being front and center in how lawmakers crafted last year’s Russia sanctions bill.

A similar debate could play out over the Graham-Menendez bill.

David Goldwyn, an international energy policy consultant and former top State Department official for energy policy, said strengthening restrictions on U.S. companies investing in projects abroad could hurt American firms, with little upside.

“It really inadvertently enables the Russians to push U.S. companies out of investment simply by participating in them,” Goldwyn said.

“It’s a completely laudable objective on the part of the sponsors, but it’s a very clumsy, and probably counterproductive, tool,” he continued.

Richard Nephew, an adjunct professor at Columbia University’s Center on Global Energy Policy, though, said lawmakers are going in the right direction.

“Going a little deeper on energy and leveling the playing field a little bit is probably the right step to take at this point,” he said.

Nephew said that while previous sanctions have reduced the growth in Russia’s oil production, the new bill could be even more effective.

“By some point in the not too distant future, it’s, at a minimum, going to cap Russian production,” he said. “But it could even start to run them down.”

The bill also targets major Russian banks, many of which have ties to the Kremlin, with new prohibitions on U.S. and European deals in the country. Eight of Russia’s largest banks would be barred from the U.S. financial system, effectively killing their business with American firms.

That could have a spiraling effect, hampering even legal financial dealings.

European companies and banks operating in Russia could also be scared off from doing business with the targeted firms, even for permitted transactions, to avoid being entangled in U.S. sanctions.

“There’s very few banks who want to take on that kind of risk,” Linney said.

The bill would also ban U.S. persons from investing in or trading Russian sovereign debt, closing a potential source of financing for the Kremlin.

There are also misgivings about the proposal in the administration.

The Treasury Department warned Congress against imposing such restrictions in a February memo to lawmakers over concerns it could backfire on the U.S. economy and national security.

“The magnitude and scope of consequences from expanding sanctions to sovereign debt and derivatives is uncertain and the effects could be born by both the Russian Federation and U.S investors and businesses,” the memo read.

It remains to be seen if the bill will pass Congress this year, but the anxiety over the proposed changes is already evident.

“Any time that companies in an industry or sector start to change their habits in a big way, whether to avoid sanctions or otherwise, you’re going to see impacts on the market,” Linney said.