On June 3, 2020, the U.S. Department of Treasury’s Office of Foreign Assets Control (“OFAC”) issued new regulations under 31 CFR Part 569 to implement Executive Order (E.O.) 13894 issued by President Trump on October 14, 2019.  The President issued E.O. 13894 in response to the situation in and around Syria, in particular, the military action taken by Turkey against Kurds in Syria.  OFAC stated that it expects to supplement these regulations with further, more detailed regulations.  The notice was published in the Federal Register and the regulations are effective on June 5, 2020.

When it was issued, E.O. 13894 added some persons to the Specially Designated Nationals and Blocked Entities (“SDN”) list.  The E.O. authorizes the Secretary of Treasury, upon findings by the Secretary of State to impose a number of sanctions against additional persons meeting the criteria in the E.O.  Critically, the E.O. also authorized the Secretary of Treasury to impose secondary sanctions against foreign financial institutions, in the form of prohibitions or restrictions on correspondent accounts or payable-through accounts, that engaged in significant financial transactions with persons sanctioned under this E.O.

The June 3 iteration essentially implements the prohibitions stated in the E.O., adding definitions and standard interpretive guidance.  For example, the regulations stated that a transfer of property in violation of the E.O. is null and void, except in certain specified circumstances.  The regulations also add OFAC reporting requirement for those holding property blocked pursuant to this order.  In addition, they provide certain standard limited exceptions related to personal communications, information or informational materials, and travel.  Finally, the regulations also authorize the provision of certain legal services and emergency medical services to persons listed under the order.