Syrian sanctions regime

Following the recent unrest in Syria, the EU has this week imposed new sanctions on the Syrian regime, including an arms embargo, the freezing of funds and economic resources, and a travel ban on certain persons said to be responsible for the repression of the civilian population of Syria. The UK has enacted legislation criminalising aspects of the new sanctions. This briefing provides a brief overview of the new sanctions regime.

New EU and UK legislation

On 9 May 2011, the European Union adopted Council Regulation (EU) No 270/2011 (the "EU Regulation") which imposes, amongst other measures, an asset freeze on 13 individuals identified as being responsible for the violent repression of the civilian population in Syria and persons and entities associated with them. The UK enacted the Syria (Asset-Freezing) Regulations 2011 (the "UK Regulations") on 10 May 2011 to give full effect to the financial sanctions aspects of the EU Regulation, which also entered into force on 10 May 2011.

Previous regime

The Lebanon and Syria (United Nations Measures) Order 2005 (the "2005 Order") implemented certain measures contained in UN Security Council Resolution 1636 (2005) (the "UN Resolution"), brought into force following the February 2005 terrorist bombing in Beirut.  The 2005 Order created an offence of dealing with funds or economic resources owned or controlled by persons designated under the UN Resolution or making funds or economic resources available to persons suspected of involvement in the bombing.

To date, however, no persons or entities have been designated under the UN Resolution. The EU and UK Regulations therefore create a new and completely separate sanctions regime in respect of Syria.

Asset freezing and financial sanctions

The UK Regulations follow the normal format for the UK's targeted financial sanctions. They include the following key provisions:

• a person ("P") must not deal with funds or economic resources belonging to, or owned, held or controlled by, a designated person if P knows or has reasonable cause to suspect, that P is dealing with such funds or economic resources;
• a person ("P") must not make funds available (1) directly or indirectly to a designated person or (2) to any person for the benefit of a designated person, if P knows or has reasonable cause to suspect that P is so making funds or economic resources available. Funds or economic resources are made available for the benefit of the designated person only if that person thereby obtains, or is able to obtain, a significant financial benefit;
• no person may intentionally participate in activities knowing that the object or effect of them is (whether directly or indirectly) to circumvent any of the prohibitions or to enable to facilitate the contravention of any such prohibition; and
• a licensing regime and reporting requirements.

The UK Regulations apply extraterritorially to conduct of UK nationals or UK incorporated companies.

The EU Regulation applies to 13 persons, including Mohammad Ibrahim Al-Chaar (Minister for the Interior) and a number of senior officials in the intelligence and security forces.

Trade sanctions - military and internal repression items

The EU Regulation also prohibits the sale, supply, transfer or export of equipment which might be used for internal repression to any person or entity in Syria or for use in Syria. The provision of technical or financial assistance or brokering services related to items that may be used for internal repression and the provision of technical or financial assistance related to items on the EU Common Military List are also forbidden.

Companies should bear these restrictions in mind when considering transactions or financing projects in Syria, as the lists of restricted items comprise certain "dual use" items such as explosives which may be used for a range of activities.

The UK Regulations do not criminalise breach of the trade sanctions provisions in the EU Regulation, but further legislation in this regard would be entirely predictable and, in any event, the EU Regulation is directly applicable in the UK.

Further information

A copy of HM Treasury's notice summarising the new sanctions (which also includes a link to the EU Regulation and reproduces the list of designated persons) is available here.

For advice on issues arising in relation to the sanctions regime against Syria or elsewhere, please do not hesitate to contact a member of our team.