On October 14, 2019, President Donald Trump announced U.S. economic sanctions directed at the government of Turkey in response to Turkey’s military action in northeast Syria, “including but not limited to indiscriminate targeting of civilians, targeting of civilian infrastructure, targeting of ethnic or religious minorities, or targeting or other actions that undermine the continued counterterrorism activities of the Syrian Democratic Forces.” In issuing an executive order to implement the sanctions, Trump added in a formal statement that the United States will again increase Section 232 tariffs on steel imports from Turkey from 25 percent to 50 percent, its level in May 2019. He also announced that ongoing negotiations on a $100 billion trade deal with Turkey will be halted. The president stated that he has been “perfectly clear” with Turkish President Recep Erdogan that Turkey’s actions are precipitating a humanitarian crisis and setting conditions for possible war crimes. He added, “I am fully prepared to swiftly destroy Turkey’s economy if Turkish leaders continue down this dangerous and destructive path.”
As a result, the Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated and blocked two ministries and three senior Turkish government officials and placed them on the Specially Designated Nationals (SDN) List. OFAC has designated Turkey’s Ministry of National Defence and the Ministry of Energy and Natural Resources, as well as the Minister of National Defence, Hulusi Akar, Minister of Energy and Natural Resources, Fatih Donmez, and the Minister of the Interior, Suleyman Soylu.
Additionally, OFAC issued three General Licenses authorizing certain activities and/or allowing for the winding down of other activities involving these Turkish ministries. General License 1 authorizes the conduct of the official business of the U.S. government by employees, grantees or contractors that would otherwise be prohibited by the sanctions. General License 2 authorizes a 30-day wind-down period (until November 13, 2019) for all transactions and activities that are ordinarily incident and necessary to conclude operations, contracts or other agreements involving the Ministries of National Defence or Energy and Natural Resources of the Turkish government. General License 3 authorizes official activities of the United Nations and certain related agencies and organizations involving these two Turkish ministries.
In announcing the sanctions, Treasury Secretary Steven Mnuchin said, “The United States is holding the Turkish Government accountable for escalating violence by Turkish forces, endangering innocent civilians, and destabilizing the region,” and is prepared to impose additional sanctions, as necessary.
Because of these actions, all property and interests in property of these ministries and the individual Turkish ministers – and of any entities that are owned, directly or indirectly, 50 percent or more by the designated entities – that are in the United States or in the possession or control of U.S. persons must be blocked and reported to OFAC. Because U.S. persons are generally prohibited from dealing with entities on the SDN List, persons who engage in certain transactions with these designated persons and entities may themselves be exposed to designation. OFAC has indicated that any foreign financial institution that knowingly facilitates a significant financial transaction for or provides significant financial services to these entities could be subject to U.S. correspondent account sanctions or payable-through account sanctions.