After much media attention regarding the imposition of a new round of sanctions against Syria, President Obama issued a new executive order which not only blocked all property and transactions in blocked property that comes within U.S. jurisdiction owned or controlled by the Government of Syria, but also implements a tailored country based trade ban against Syria.
The country based trade ban is interesting as many practicing in this field thought that the days of broad based country wide sanctions programs were over and that the U.S. would only rely on specifically targeted sanctions. However, this is clearly not the case in this latest round of Syria sanctions.
I have highlighted the new country based restrictions below.
1. No new investment in Syria by U.S. persons. This includes no new investment in Syria by U.S. persons outside of the United States.
2. No exportation or reexportation of services to Syria of U.S.-origin services.
3. No importation into the United States of petroleum or petroleum based products of Syrian origin.
4. No transactions for whatsoever by U.S. persons related to petroleum or petroleum based products of Syrian origin.
5. No facilitation of any transactions which would violate the prohibitions contained in the new executive order. Facilitation in the U.S. economic sanctions context is generally considered to be the carrying out of some act that allows for two foreign persons to engage in a transaction which would have been prohibited had a U.S. person been directly involved.
This new round of sanctions is obviously tailored to cut off the financial lifeline of the Syrian Government: oil revenues. This type of hybrid sanctions program may prove to be very effective. Generally, country based programs are too broad and impact too many innocent parties, while specific programs are harder to enforce and perhaps easier to evade. This latest round of sanctions by the U.S. looks to have the best of both worlds: the expansiveness of a country based program and the specificity of a targeted sanctions program. With that said, there will be a lot of work to do in coming weeks for compliance officers and U.S. persons to ensure that these new sanctions are not being violated.
The author of this blog is Erich Ferrari, an attorney specializing in OFAC matters. If you have any questions please contact him at 202-280-6370 or email@example.com.