United States Imposes Broad New Sanctions Against Syria

In response to the escalating violence in Syria, President Obama issued today an Executive Order imposing broad new sanctions that could significantly disrupt business that was permissible under preexisting U.S. sanctions. This action follows a U.N. Security Council condemnation of the violence and less restrictive European Union sanctions. The new U.S. sanctions, which are effective immediately, will likely have the greatest effect on U.S. companies that provide services relating to Syria, invest in Syria or are closely involved with their non-U.S. affiliates' business with Syria.

The following summarizes the activities the new sanctions prohibit:

  1. Dealings in certain property and property interests of the Syrian government and persons the U.S. government determines have aided or are associated with the Syrian government.
  1. New investment in Syria by U.S. companies.
  1. Exporting, reexporting, selling or supplying any services to Syria by U.S. companies.
  1. U.S. imports and certain U.S. company activities relating to Syrian petroleum products.
  1. Facilitation of foreign person transactions by a U.S. company that would be prohibited if conducted by a U.S. company.

The prior U.S. sanctions against Syria had prohibited exports and reexports by anyone of most goods and technologies that were of U.S. origin or were produced outside the United States with more than de minimis U.S. content. Those sanctions also prohibited dealings in certain property and property interests of several members of the Syrian government. The new sanctions significantly expand those prohibitions.

Several interpretative issues are likely to arise in connection with the new Syrian sanctions. For example, companies will likely have difficulty in determining whether a U.S. company involved with non-U.S. companies making sales to Syria might also be providing services to Syria. In addition, the scope of the prohibition on new investment is uncertain. New regulations will likely be promulgated to provide further details on the scope of these sanctions. In the meantime, U.S. companies will need to proceed with additional caution should their business involve Syria.

For more information, please contact: Corey L. Norton, at 202-434-4303 or norton@khlaw.com, or Johny Chaklader, at (202) 434-4116 or chaklader@khlaw.com.

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