President Trump has issued a new Executive Order setting out a framework by which the US Treasury’s Office of Foreign Assets Control (OFAC) can impose sanctions against the Turkish state, key government officials and businesses deemed to be materially assisting Turkey’s actions in north-eastern Syria. It continues a recent trend by the Trump administration of utilising financial sanctions as a tool of US foreign policy.

Accompanying the order, OFAC has sanctioned two government ministries – the Ministry of National Defence and the Ministry of Energy and Natural Resources, and three senior government officials. The officials sanctioned are the Minister of National Defence, the Minister of the Interior and the Minister of Energy. OFAC’s measures freeze their assets in the United States and ban US or US-related transactions with them.

In a further penalisation, President Trump announced that the sanctions would be accompanied by a hike on tariffs on Turkish steel up to 50%, along with the “immediate” freezing of negotiations on a $100bn US-Turkey trade deal.

The sanctions set out in the Executive Order have the ability to attach to individuals, entities or associates of the Turkish government deemed to be involved in "actions that endanger civilians or lead to the further deterioration of peace, security and stability in northeast Syria".

The order also exposes foreign financial institutions to sanctions risk, as it gives the Secretary of State powers to designate any foreign financial institution that knowingly facilitates any significant financial transactions for or on behalf of the sanctioned entities or individuals. OFAC’s recent enforcement actions have shown them willing to adopt a strong stance in relation to jurisdiction against financial institutions and businesses that fail to abide by US sanctions legislation.

OFAC has issued three General Licenses alongside the Executive Order. General License 1 authorises the conduct of the official business of the United States Government by employees, grantees, or contractors otherwise prohibited by the order. General License 2 authorises a 30-day wind down period for all transactions and activities that are ordinarily incident and necessary to the wind down operations, contracts, or other agreements involving the Ministries of National Defence or Energy and Natural Resources of the Government of Turkey. General License 3 authorises official activities of the United Nations involving the Ministry of National Defence or the Ministry of Energy and Natural Resources of the Government of Turkey.

The US Congress has indicated that further bipartisan legislation may be on its way in relation to Turkish sanctions.