On May 18, 2011, President Obama issued Executive Order 13573, 76 FR 29143, imposing sanctions against the Assad regime in Syria in response to its crackdown of dissidents during the ongoing uprising in the country. The order imposes sanctions against the following individuals:
- Bashar al-Assad: President of Syria
- Farouk al-Shara: Vice President of SyriaAdel Safar: Prime Minister of the Syria
- Mohammad Ibrahim al-Shaar: Interior Minister of Syria
- Ali Habib Mahmoud: Defense Minister of Syria
- Abdul Fatah Qudsiya: Head of Syrian Military Intelligence
- Mohammed Dib Zaitoun: Director of Political Security Directorate
Furthermore, the Executive Order empowers the Secretary of the Treasury to impose sanctions against and block property of any person it determines:
- to be a senior official of the Government of Syria;
- to be an agency or instrumentality of the Government of Syria, or owned or controlled, directly or indirectly, by the Government of Syria or by an official or officials of the Government of Syria;
- to have materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services in support of, any person whose property and interests in property are blocked pursuant to the order; or
- to be owned or controlled by, or to have acted or purported to act for or on behalf of, directly or indirectly, any person whose property and interests in property are blocked pursuant to the order.
The Executive Order is further to Executive Order 13572, 76 FR 24787 (Apr. 29, 2011), which imposed sanctions against certain persons involved in human rights abuses in Syria and empowered the Secretary of the Treasury to further designate such persons.
Together the Executive Orders “block” all property of the sanctioned persons that is located within the United States or in the possession of any United States person, meaning that such property “may not be transferred, paid, exported, withdrawn, or otherwise dealt in.” Furthermore, United States persons are generally prohibited from engaging in any transaction with the specifically designated persons. “United States person” is defined as “any United States citizen, permanent resident alien, entity organized under the laws of the United States or any jurisdiction within the United States (including foreign branches), or any person in the United States.”
The Treasury Department agency that will administer the sanctions, the Office of Foreign Assets Control (“OFAC”), considers a blocked person to have an interest in any property (including entities) in which it owns, directly or indirectly, a 50 percent or greater interest. See “Office of Foreign Assets Control, Guidance on Entities Owned by Persons Whose Property and Interests in Property Are Blocked,” Feb. 14, 2008.
Executive Order 13573 therefore blocks the property of all entities in which the seven listed officials (or other Specially Designated Nationals and Blocked Persons) own a 50 percent or greater interest, and prohibits United States persons from engaging in any transactions with such entities. While the order does not extend the same treatment to the Syrian government as a whole, it does empower the Secretary of the Treasury to designate agencies and instrumentalities of the government and entities in which the government owns a 50 percent or greater interest.
This Executive Order represents another effort by the Obama Administration to use targeted economic sanctions to put pressure on a foreign government to refrain from repressing dissident groups and stifling free political expression. Given the regional situation, and the fact that the Secretary of the Treasury is empowered to impose restrictions on additional entities and agencies of the Syrian government, companies that are either already doing business in Syria or contemplating entering into the Syrian market should exercise great caution, and consider contingency plans and exit strategies.