WASHINGTON (Reuters) - Legislation from two U.S. senators from both parties introduced on Wednesday establishes a fund to enforce sanctions on the so-called ghost fleet of tankers Russia relies on to carry oil to avoid Western sanctions over its war on Ukraine.

The bill from Senators Joni Ernst, a Republican, and Richard Blumenthal, a Democrat, creates a fund to enforce sanctions on vessels, which sometimes also carry crude exports from Iran, a trade President Donald Trump says he wants to bring down to zero to prevent it from getting a nuclear weapon.

WHY IT'S IMPORTANT

Russia and Iran have used the shadow fleet to avoid sanctions and send oil to big customers like China and India. If Russian oil is under a $60 per barrel price cap set by Western economies, that trade is not under sanctions, provided the tankers have not been designated. The bill also establishes an export enforcement coordination center operated by the secretary of Homeland Security.

BY THE NUMBERS

The bill establishes a Russian Sanctions Enforcement Fund at the U.S. Treasury with an initial $150 million in 2025.

Any oil seized by the U.S. would be sold and the funds over certain levels would eventually help pay down the U.S. debt, though the amount raised would be tiny compared to the $36 trillion debt.

KEY QUOTES

"Russia is continuing its malign actions by operating a 'ghost fleet' to evade U.S. sanctions, enrich its own war machine, and even aid Iranian oil smuggling," said Ernst. 

The legislation will enhance intelligence sharing and equip law enforcement with the tools to go after "illicit" trade networks, Ernst said. "In addition to disrupting Moscow's malign efforts to undermine U.S. law, this bill will also arm our nation to utilize the seized assets and pay down our own debt."

Blumenthal said: "This measure will give our export controls real bite."

WHAT'S NEXT?

It's uncertain what is next for the bill in Congress, though measures on Russia and Iran are something that many lawmakers from both parties agree.