OFAC Sanctions 271 Employees of Syria’s Scientific Studies and Research Center

Yesterday (April 24, 2017), the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated 271 employees of Syria’s Scientific Studies and Research Center (SSRC). This surprisingly large set of designations was in response to the April 4, 2017 sarin gas attack by the Syrian government on civilians in Khan Sheikhoun, Syria.  The designations were made pursuant to Executive Order 13582, “Blocking Property of the Government of Syria and Prohibiting Certain Transaction With Respect to Syria,” which was issued by President Obama on August 17, 2011.

April 24 Designations on Employees of the SSRC

According to the Treasury, the SSRC, an agency of the Syrian government, is responsible for research and production of non-conventional weapons and the delivery thereof.  In addition, the designated individuals were targeted for 1) having expertise in chemistry and related disciplines and/or 2) working in support of SSRC’s chemical weapons program.

U.S. economic sanctions have become part of the U.S. government’s toolkit for economic statecraft. As such, sanctions designations often advance foreign policy and national security policy interests of the U.S. In large designations such as the one yesterday, the use of sanctions often include policy goals beyond mere law enforcement objectives (which are common in programs such as the narcotics trafficking sanctions programs.)

Yesterday, the U.S. government’s “sweeping sanctions” are attempting to accomplish several things:

1. The U.S. government is sending a strong message that the U.S. will respond to blatant human rights violations, with this action more than doubling the number of persons sanctioned under Syria-related sanctions.
2. The U.S. government is showing that it is willing to target the staff of entire departments of foreign government agencies.
3. The U.S. government is showing that in egregious cases, it has sufficient information on foreign nationals and governments to issue broad sanctions designations.

Authority for the Designations

The authority for the designations is derived from E.O. 13582 (2011), which was issued by President Obama pursuant to the powers delegated to the President in the International Emergency Economic Powers Act (IEEPA), the National Emergencies Act, and 3 USC 301.  E.O. 13582 was issued to take additional steps based on the national emergency initially declared in E.O. 13338 (2004) pertaining to Syria, and as further modified by E.O. 13399 (2006); E.O. 13460 (2008), E.O. 13572 (2011), and E.O. 13573 (2011).

In particular, yesterday’s designations are derived from the power delegated in E.O. 13582 (2011) to the Secretary of Treasury, in consultation with the Secretary of State, to block property belonging to any persons:

• Determined “to have materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services in support of,” the Government of Syria; (E.O. 13582 (2011) Section 1(b)(i)) and
• Determined “to have acted or purported to act for or on behalf of, directly or indirectly,” the Government of Syria.  E.O. 13582 (2011) Section 1(b)(ii).

Effect of the Sanctions Against the 271 Designees

The individuals designated in yesterday’s action are considered blocked persons, and all property and/or interests in property belonging to the designated persons are also blocked. This means that no U.S. persons can engage in any transaction with the designated persons, their property, or their property interests. As a result, even transactions where the designated persons are third parties may be blocked by U.S. persons or by any person if they enter the United States.

Financial institutions, international businesses, and life insurance third party administrators should all review their compliance procedures to ensure that the recent designations are reflected in their programs and that existing clients are screened.

With that said, as the designated persons are likely located in Syria, the sanctions will likely have a limited impact on their lives within Syria’s borders. This is because Syria is already subject to a broad country-based embargo, and U.S. persons are generally prohibited from engaging in most activity with persons within the geographic area of Syria.

However, if the designated persons had plans to leave Syria, or if they have already left Syria and only worked at the SSRC years ago, yesterday’s sanctions will likely have a strong and immediate impact on their lives. Financial institutions, even outside the U.S., may close bank accounts with designated persons in order to minimize risk of sanctions liability. As a result, yesterday’s sanctions arguably serve as a powerful deterrence to future chemists and other scientists contemplating working for the Syrian government, or for other governments developing chemical weapons.

It is still not clear whether yesterday’s designations accurately targeted persons involved in the development of weapons in Syria, or whether OFAC cast the net so wide that individuals with no relation to weapons development are now going to face the experience of becoming an SDN person.

Process for Delisting and Removal from the SDN List

The process for removal from the Specially Designated Nationals and Blocked Persons (SDN) List is complex, although it has improved substantially over the last several years.  It can be a long process, that may take years to resolve.  OFAC is open to petitions for SDN removal in cases involving mistaken identity and changes in circumstance.