On August 18, 2011, President Obama issued Executive Order 13582, imposing new economic sanctions on Syria in response to the Syrian government's violent crackdown on anti-government protests. These new sanctions:

  • Block all property and interests in property of the government of Syria (including its agencies, instrumentalities and controlled entities) which comes within the United States or comes into the possession or control of any U.S. person (including U.S. citizens, U.S. resident aliens, U.S.-incorporated entities and their overseas branches, or any person located in the U.S.);
  • Prohibit U.S. persons from providing funds, goods or services to the government of Syria, or receiving the same;
  • Prohibit new investment in Syria by any U.S. person, wherever located;
  • Prohibit U.S. persons, wherever located, from exporting, selling, or supplying, directly or indirectly, any services to Syria;
  • Prohibit the importation of petroleum products of Syrian origin into the U.S.;
  • Prohibit U.S. persons from dealing in or transacting with respect to petroleum products of Syrian origin; and
  • Prohibit U.S. persons, wherever located, from approving, financing, facilitating or guaranteeing a transaction by a foreign person of any of the foregoing.  

The new sanctions significantly broaden the pre-existing sanctions imposed on Syria. Not only are transactions with the government of Syria prohibited, but U.S. persons may not provide or receive services from persons or entities located in the geographic territory of Syria. "New investment" in Syria is also prohibited, although the executive order contains no definition of that term.

In addition, similar to other sanctions programs by the U.S. Treasury Department's Office of Foreign Assets Control (OFAC), U.S. persons may not assist foreign persons by facilitating activities which would violate the Syrian sanctions. This means that U.S. directors and officers of a U.S. company's foreign subsidiaries cannot authorize transactions with Syria which would be prohibited for the U.S. parent.

Although OFAC has issued ten general licenses permitting certain activities with respect to Syria, those licenses are limited and should be narrowly construed. Until OFAC issues regulations clarifying the scope of the Syrian sanctions under the executive order, U.S. businesses and their foreign branches should consider the new sanctions as a comprehensive embargo against Syria. This embargo applies to ongoing transactions and agreements with Syria which pre-date the issuance of the new executive order, and U.S. persons have until November 25, 2011, to wind down all such pre-existing transactions.