OFAC Issues Sanctions, General Licenses as Congress, Europe Respond to Turkey's Actions

The Treasury’s Office of Foreign Assets Control sanctioned Turkey’s government and issued three general licenses as Congress called for harsher restrictions on Turkey for its military activities in Syria (see 1910140005). OFAC’s sanctions -- issued after President Donald Trump announced an executive order granting the Treasury and State departments new power to sanction Turkey -- target Turkey’s defense ministry, energy ministry, defense minister (Hulusi Akar), energy minister (Fatih Donmez) and interior minister (Suleyman Soylu). Treasury said more sanctions may be coming.

“We are prepared to impose additional sanctions on Government of Turkey officials and entities, as necessary,” the agency said.

Trump’s Oct. 14 executive order extends beyond Turkey’s government, allowing Treasury to sanction any person or entity involved with Turkey’s military actions in Syria or that operates in Turkey’s economy. The order blocks U.S. banks from making loans to sanctioned entities or people “totaling more than $10,000,000 in any 12-month period” except for humanitarian reasons. It also blocks transactions, transfers of credit and investments with a sanctioned person or entity, and gives Treasury the authority to impose “strict conditions” on maintaining “a correspondent account or a payable-through account” that belongs to a foreign bank but is located in the U.S.

Treasury issued three general licenses and said it is “prepared” to issue more authorizations to ensure the sanctions do “not disrupt Turkey’s ability to meet its energy needs.” General License 1 allows transactions conducted by U.S. government employees that would otherwise be blocked by the executive order. General License 2 authorizes a 30-day wind-down period until Nov. 13 for all “operations, contracts, or other agreements” with Turkey’s defense and energy ministry and any entities they own by more than 50 percent. General License 3 authorizes “official business” by the United Nations with Turkey’s defense and energy ministries.

The sanctions stopped short of a framework proposed by Sens. Lindsey Graham, R-S.C., and Chris Van Hollen, D-Md., on Oct. 9 and which Graham said would have bipartisan support from Congress (see 1910100049). Unlike OFAC’s sanctions, the framework calls for sanctions against a range of top Turkish officials, including its president, vice president and ministers of foreign affairs, treasury and trade.

Similarly, House legislation expected to be introduced by Reps. Eliot Engel, D-N.Y., and Michael McCaul, R-Texas, would sanction additional Turkish officials, including senior military officials, and ban exports of defense items to Turkey.

House Speaker Nancy Pelosi said more sanctions are needed, saying Trump “unleashed an escalation of chaos and insecurity” in Syria. “His announcement of a package of sanctions against Turkey falls very short of reversing that humanitarian disaster,” Pelosi said in an Oct. 14 press release.

The European Council condemned Turkey’s actions in Syria, calling on EU member states to “immediately halt arms exports licensing to Turkey.” The Council said it plans to convene a working group this week to coordinate among member states and solidify their position. “The continued efforts of the international community, including at the UN Security Council, in order to stop this military unilateral action are urgently needed,” the Council said in a statement.

Several EU countries, including France and the Netherlands, announced intentions to tighten export restrictions to Turkey as the country continues military operations in Syria. The Netherlands said it is holding all new export license applications for military goods to Turkey, according to an unofficial translation of its release, and will issue no new licenses “until further notice.”