On October 14, 2019, President Trump issued a broad executive order targeting the Government of Turkey in response to Turkey’s military offensive in northeast Syria. The executive order followed President Trump’s statement earlier in the day that, “I am fully prepared to swiftly destroy Turkey’s economy if Turkish leaders continue down this dangerous and destructive path.”
The executive order authorizes the Secretary of the Treasury to sanction (1) persons determined to be responsible for, or complicit in, actions or policies threatening the peace, security, stability, or territorial integrity of Syria, or the commission of serious human rights abuses; (2) current or former Turkish government officials; (3) Turkish government departments and agencies; (4) entities operating in the Turkish economy; and (5) any person providing material assistance and financial or technological support for persons blocked pursuant to the executive order.
With respect to such persons who are designated by the Secretary, the executive order blocks transactions involving their property interests in the United States or that are in the possession or control of US persons. US companies, for example, may not perform contracts with a designated person without a license or other authorization. The blocking action extends to entities that are 50% or more owned by designated persons.
Importantly, the executive order authorizes the imposition of secondary sanctions (i.e., sanctions on foreign companies in retaliation for activities that support sanctioned governments or entities) on foreign persons involved in the prevention of a ceasefire and political solution in Syria, prevention of displaced persons from voluntarily returning to Syria, or forcible repatriation of refugees to Syria, among other actions. The secondary sanctions include a ban on US government procurement, denial of visas, financial transactions within the jurisdiction of the US, and blocking sanctions. Further, the executive order authorizes prohibiting foreign financial institutions that knowingly conduct or facilitate “significant financial transactions” with persons sanctioned pursuant to the executive order from maintaining correspondent accounts in the US.
Concurrent with the issuance of the executive order, the Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated the Turkish Ministers of Energy and Natural Resources, Interior, and National Defense, as well as the Turkish Ministry of Energy and Natural Resources, and Ministry of National Defense. These persons and ministries are now included on the Specially Designated Nationals and Blocked Persons list.
OFAC also issued three general licenses authorizing transactions related to official business of the US Government, official activities of certain international organizations with the Turkish Ministry of Energy and Natural Resources, and Ministry of National Defense, and most importantly, a 30-day period for US persons to wind down existing operations and contracts involving the two sanctioned ministries.
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