The US Office of Foreign Assets Control first issued the Syrian Sanctions on April 5, 2005, implementing Executive Order 13338, “Blocking Property of Certain Persons and Prohibiting the Export of Certain Goods to Syria.” On June 6, 2024, OFAC once again amended the Regulations implementing the foreign sanctions evaders provisions relating to Syria contained in Executive Order 13608 and certain relevant provisions from the Iran Threat Reduction and Syria Human Rights Accountability Act of 2012, the Countering America’s Adversaries Through Sanctions Act, and the Caesar Syria Civilian Protection Act of 2019. These changes come as the White House maintains that its position is to oppose Arab normalization with Bashar al-Assad.
The amendments include the incorporation of provisions related to blocked persons, definitions of certain relevant terms, new interpretive sections, one new general license (GL), and amendments to six existing general licenses. The US Office of Foreign Assets Control (OFAC) also published a list of areas in Northeast and Northwest Syria where activities are permitted by 31 CFR 542.533, which authorizes activities in certain economic sectors in “non regime held areas.”
Simultaneously, OFAC issued one new frequently asked question. Below, we provide a summary of some of these updates.
Updates to Subpart B—Prohibitions
The Regulations, specifically sections 542.201 and 542.212, have been updated to include various provisions from the Iran Threat Reduction and Syria Human Rights Accountability Act of 2012 (SHRAA), Countering America’s Adversaries Through Sanctions Act (CAATSA), the Caesar Syria Civilian Protection Act of 2019 (Caesar Act), and Executive Order (EO) 13608.
SHRAA
From SHRAA, the regulations now provide for sanctions against persons determined to have been responsible for or complicit in (1) human rights abuses committed against citizens of Syria or their family members, (2) the transfer of goods or technologies to Syria that are likely to be used to commit human rights abuses, and (3) persons who engage in censorship or other forms of repression in Syria.
CATSAA
From CAATSA, the regulations now provide for sanctions against foreign persons who knowingly transfer, export, or otherwise provide to Syria significant financial, material, or technological support that contributes materially to the ability of the Government of Syria to acquire or develop (among other things) ballistic or cruise missile capabilities or destabilizing numbers and types of advanced conventional weapons.
Caesar Act
From the Caesar Act, the regulations now provide for sanctions against foreign persons who knowingly engage in (among other things) a significant transaction with the Government of Syria, engage with a foreign person subject to sanctions with respect to Syria, or knowingly sell goods that support the expansion of the Government of Syria.
EO 13608
From EO 13608, the regulations now provide for sanctions against foreign persons who violate, attempt to violate, conspire to violate, or cause a violation of any license, order, regulation, or prohibition contained in or issued pursuant to the rules referenced.
These changes do not represent a change in the sanctions program or a shift in policy. Rather, they are administrative in nature—an attempt to centralize many of the various sanctions provisions relating to Syria.
Updates to Subpart C—Defined Terms
The definitions section of the Regulations has been updated to include the following terms.
“Knowingly”
As used in the context of transactions involving blocked property (i.e., sanctioned persons) and other sanctionable conduct, “knowingly” has been defined to mean, with respect to conduct, a circumstance or a result, a person who has actual knowledge or should have known of the conduct, the circumstance, or the result. This definition, which tracks that in other sanctions programs, is incorporated from that in the SHRAA.
“Construction or engineering services”
“Construction or engineering services,” targeted by the Caesar Act, have been defined as services for the construction of buildings or structures, or for the production, procurement, devising, framing, or arranging in Syria of parts or materials to fabricate, shape, or form buildings or structures, and assistance, advisory, consultative, design, and recommendation services concerning engineering matters or during any phase of an engineering project, including the on-site design, development, assembly, or construction of residential, commercial, or institutional buildings in Syria. This definition is also similar to that used in other sanctions programs, including those that have been imposed on Iran.
“Sensitive technology”
“Sensitive technology,” the transfer of which to the Government of Syria can be sanctionable, has been defined as hardware, software, telecommunications equipment, or any other technology, that the Secretary of the Treasury, in consultation with the Secretary of State, determines is to be used specifically to restrict the free flow of unbiased information in Syria or to disrupt, monitor, or otherwise restrict speech of the people of Syria. This definition is incorporated from that in the SHRAA.
Updates to Subpart D—Interpretations
The Regulations were also updated to include new interpretive sections. Most notably, Section 542.414 now provides guidance on how OFAC will determine whether a transaction is “significant,” a threshold term commonly used across OFAC’s various sanctions programs to determine whether a specific transaction is sanctionable. The regulations now state that in determining whether a transaction is significant in the context of the Syria-related sanctions program, its consideration will include but is not limited to size, number, frequency, and nature (i.e., type or complexity) of the transaction(s); level of awareness/pattern of conduct; nexus; and impact on the objectives of the sanctions.
Updates to Subpart E— General Licenses
In conjunction with these amendments to the Regulations, OFAC also issued one new GL at Section 542.534. This new GL authorizes any transaction prohibited by the newly added prohibitions from EO 13608 located at Section 542.212, to the same extent such transaction would be authorized for a person whose property and interests in property are blocked pursuant to the newly added prohibitions from SHRAA, CAATSA, and the Caesar Act (Section 542.201), by a GL issued pursuant to this part.
The amended GLs consist of the following:
Section 542.511
Section 542.511, which authorizes the exportation of certain services incident to internet-based communications, was updated to reflect changes in the technologies that underlie modern communication tools, including listing additional technologies that are deemed incident to the exchange of communications online; an expansion of the scope of the authorization to cover exportation/reexportation of services incident to the exportation or reexportation of software or hardware not subject to the Export Administration Regulations incident to the exchange of communications over the internet.
Section 542.513
Section 542.513, which authorizes transactions of certain international organizations, was updated to include new international organizations and to terminate the requirement that contractors or grantees provide a copy of their contract or grant and identifying additional international organizations and entities covered.
Less significant updates were made to other existing GLs, including Section 542.507, Section 542.508, Section 542.516, and Section 542.531. Finally, Section 542.533, which authorizes activities in certain economic sectors in non-regime held areas of northeast and northwest Syria, was incorporated into the regulations alongside a list of the authorized areas.
New and Amended FAQs
Concurrently, OFAC released new FAQ 1180 summarizing the June 6, 2024 Regulation amendments without providing any significant clarification. OFAC characterizes its amendments as:
What’s Next?
While most of the changes to the Regulations are administrative in nature, OFAC has expanded the scope of certain general licenses, in essence easing some of the restrictions on certain Syria-related transactions. At the same time, many of the provisions incorporated into the Regulations are “secondary sanctions” targeting activities by non-US persons that the United States believes do not align with its foreign policy goals—here, normalization with the Assad regime. It remains to be seen whether the Biden administration will enforce these sanctions as there has been some reporting that indicates the Administration will push back against legislation pending before Congress that would expand sanctions on the reconstruction and rehabilitation of the Assad regime.
Legal Practice Assistant Kate Curcio significantly contributed to this LawFlash.
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