On 14 October 2019 the US imposed sanctions on certain Turkish ministries and senior government officials in response to Turkey’s military offensive in northern Syria. The relevant Executive Order provides for the imposition of asset freezing measures which US persons must comply with. It also authorises the imposition of sanctions against:
- non-US persons engaging in certain sanctionable conduct, and
- any person who materially assists or sponsors, or provides financial, material or technological support for, or goods or services to or in support of a person who is blocked pursuant to the EO. (Section 1 of EO)
The latter prohibition suggests that non-US persons are at risk of sanctions if they engage in activities with designated persons which the US categorises as assistance/sponsorship, financial, material or technological support, or goods or services.
Certain foreign financial institutions are prohibited from conducting or facilitating significant financial transactions for persons blocked under the EO (Section 3).
There is a general license allowing performance of transactions and activities up to 13 November 2019 which are ordinarily incident and necessary for winding down contracts with the 2 designated ministries if they had been entered into prior to 14 October 2019.
Section 1 of the Executive Order sets out primary sanctions which provide for the blocking of property by US persons of any person determined by OFAC:
- to be responsible for or complicit in, or to have directly or indirectly engaged in, or attempted to engage in actions or policies that further threaten the peace, security, stability, or territorial integrity of Syria or the commission of serious human rights abuse;
- to be a current or former official of the Government of Turkey;
- to operate in such sectors of the Turkish economy as may be determined; or
- to be owned or controlled by or to have acted for or on behalf of, directly, or indirectly, any person whose property and interests in property are blocked pursuant to this order.
Section 2 authorises the imposition of sanctions against a foreign person who engages in
- the obstruction, disruption, or prevention of a ceasefire in northern Syria;
- the intimidation or prevention of displaced persons from voluntarily returning to their places of residence in Syria;
- the forcible repatriation of persons or refugees to Syria; or
- the obstruction, disruption, or prevention of efforts to promote a political solution to the conflict in Syria.
OFAC is also authorised to impose sanctions on persons responsible for or complicit in, or who have directly or indirectly engaged in, or attempted to engage in the expropriation of property, for personal gain or political purposes in Syria.
Section 3 authorises the imposition of sanctions against foreign financial institutions engaging in any significant financial transactions for a person who is blocked pursuant to Section 1 of the EO. “Foreign financial institution” is defined as an entity engaging in certain specific types of activities such as deposit business, giving of loans and credits, and securities brokering.
Concurrently, OFAC has made the following designations:
INDIVIDUALS:
- AKAR, Hulisi, Turkey; DOB 1952; POB Kayseri, Turkey; Gender Male (individual) [SYRIA-EO].
- DONMEZ, Fatih, Turkey; DOB 1965; POB Bilecik, Turkey; Gender Male (individual) [SYRIA-EO].
- SOYLU, Suleyman, Turkey; DOB 21 Nov 1969; POB Istanbul, Turkey; Gender Male (individual) [SYRIA-EO].
ENTITIES:
- REPUBLIC OF TURKEY MINISTRY OF ENERGY AND NATURAL RESOURCES, Ankara, Turkey [SYRIA-EO].
- REPUBLIC OF TURKEY MINISTRY OF NATIONAL DEFENCE, Ankara, Turkey [SYRIA-EO].
OFAC has issued 3 general licenses. Of particular relevance is GL2 which provides for a winding down period up to 13 November 2019 in respect of contracts or other agreements with the Ministry of National Defense or Ministry of Energy and Natural Resources that were in effect prior to 14 October 2019.
This GL does not authorise financial transactions with the designated ministries which would have a US nexus.
