On October 23, 2019, the US Treasury Department Office of Foreign Assets Control (“OFAC”) announced that it had deleted two Turkish ministries and three Turkish individuals from the list of Specially Designated Nationals and Blocked Persons (“SDN List”). These five parties had been designated to the SDN List on October 14, 2019 pursuant to Executive Order 13894 (“EO 13894”) for contributing to Turkey’s military offensive in northern Syria. Please see our blog post regarding EO 13894 here.

OFAC’s removal of these parties from the SDN List followed a statement from President Trump that he had instructed the Secretary of the Treasury to lift all sanctions imposed on Turkey on October 14th in response to the Government of Turkey’s agreement to adhere to a permanent ceasefire. President Trump indicated that sanctions targeting Turkey would be lifted, “unless something happens that we’re not happy with.” There are no remaining SDNs designated pursuant to EO 13894. The executive order itself remains in effect, however, thus providing the Secretary of Treasury with ongoing authority to designate individuals or entities under EO 13894.

Certain members of Congress have put forward their own sanctions proposals to respond to the broader context of President Trump’s decision to withdraw US troops from northern Syria, and the subsequent military operation by Turkey. This week, the House is scheduled to consider a bipartisan bill (H.R. 4695) introduced by House Foreign Affairs Committee Chairman Eliot Engel (D-NY) and Ranking Member Michael McCaul (R-TX) that would impose sanctions against Turkey.  The “Protect Against Conflict with Turkey Act” or “PACT Act” would sanction senior Turkish officials and Turkish financial institutions involved in the defense sector, prevent the sale of arms to Turkey for use in Syria, and require the Administration to impose sanctions under the Countering America’s Adversaries Through Sanctions Act (“CAATSA”) for Turkey’s purchase of Russian-made S-400 missile systems. OFAC resources on CAATSA can be found here and our blog post on the passage of CAATSA can be found here.

Other pending legislative measures include:

  • the “Countering Turkish Aggression Act of 2019” ( 2644), a bipartisan bill led by Sens. Lindsey Graham (R-SC) and Chris Van Hollen (D-MD) that would prevent the sale of arms to Turkey and apply sanctions on the U.S. assets of the Turkish political leadership, military transactions with Turkey, and the Turkish energy sector, as well as impose CAATSA sanctions for Turkey’s purchase of the S-400;
  • a House companion measure (R. 4692) from Rep. Liz Cheney (R-WY) that currently has 116 cosponsors; and
  • the “Promoting American National Security and Preventing the Resurgence of ISIS Act of 2019” (S. 2641), a comprehensive bipartisan measure by Senate Foreign Relations Committee Chairman James Risch (R-ID) and Ranking Member Robert Menendez (D-NJ) that would direct the President to oppose loans to Turkey from international financial institutions, restrict arms sales to Turkey, and apply sanctions on senior Turkish officials and persons providing arms to Turkish forces in Syria, as well as impose sanctions against Russia in connection with its support for President Assad.

Baker McKenzie is closely following the progress of these legislative measures.

The authors acknowledge the assistance of Bruce Linskens in the preparation of this blog post.

 

Author

Paul Amberg is a partner in Baker McKenzie’s Amsterdam office, where he handles international trade and compliance issues. He advises multinational companies on export controls, trade sanctions, antiboycott rules, customs laws, anticorruption laws, and commercial law matters. Paul helps clients assess and address compliance risks presented by export controls, trade sanctions, antiboycott rules, customs laws, and anticorruption laws. His practice especially focuses on internal reviews, voluntary disclosure filings, and enforcement actions brought by, the US Government in relation to the Export Administration Regulations (EAR), International Traffic in Arms Regulations (ITAR), trade and economic sanctions programs, and US customs laws.

Author

Ms. Test advices clients on issues relating to licensing, regulatory interpretations, enforcement actions, internal investigations and compliance audits, as well as the design, implementation and administration of compliance programs. She also advises clients on the extra-territorial application of trade compliance-related regulations in cross-border transactions.

Author

Callie C. Lefevre is an associate in the Washington, DC office where she is a member of the International Practice Group. Her practice is focused on all aspects of International Trade law, particularly compliance with US export controls, trade and economic sanctions, and US foreign investment restrictions. *Admitted in New York only. Practice limited to matters and proceedings before US courts and federal agencies.