Imposition of Sanctions Against Turkish Entities and Persons Under CAATSA (“Countering Americas Adversaries Through Sanctions Act”)

By: Olga Torres and Matt Lapin
Date: 12/15/2020

On December 14, 2020, the U.S. announced sanctions against the Republic of Turkey’s Presidency of Defense Industries (SSB), pursuant to Section 231 of CAATSA, for procuring the S-400 surface-to-air missile system from Russia’s Rosoboronexport. SSB is Turkey’s primary defense procurement entity and has responsibilities in defense industrial development.

Sanctions against SSB were announced as following (see complete announcement here):

  • a prohibition on granting specific U.S. export licenses and authorizations required for any goods or technology transferred to SSB;
  • a prohibition on loans or credits by U.S. financial institutions to SSB totaling more than $10 million in any 12-month period;
  • a ban on U.S. Export-Import Bank assistance for exports to SSB; and
  • a requirement for the United States to oppose loans benefitting SSB by international financial institutions (Section 235(a)(4)).

With respect to the prohibition on specific U.S. export licenses and authorizations, we understand the prohibition applies across multiple U.S. agencies that grant export licenses, including, but not limited to, the Department of State (ITAR – defense articles), the Department of Commerce (EAR – dual use items), and the Department of the Treasury, Office of Foreign Assets Control (OFAC).

Note that further guidance may be required regarding the extent of the prohibition on U.S. export licenses and authorizations (such as Technical Assistance Agreements) potentially applying to subsidiary entities or other entities owned or controlled by SSB. Additionally, at this time this prohibition is not intended to apply retroactively to previously granted export licenses or authorizations, although further guidance may be forthcoming from the individual licensing agencies.

As part of this action, the United States also imposed full blocking sanctions and visa restrictions on Ismail Demir, the President of SSB; Faruk Yigit, SSB’s Vice President; Serhat Gencoglu, SSB’s Head of the Department of Air Defense and Space; and Mustafa Alper Deniz, Program Manager for SSB’s Regional Air Defense Systems Directorate. These sanctions were published under a new sanctions list issued by OFAC (found here).

As a reminder, OFAC sanction regulations generally prohibit all transactions by U.S. persons or within (or transiting) the United States that involve any property or interests in property of designated or otherwise blocked persons and any entities owned, in aggregate 50% or more by such designated or blocked parties.

As a result of these sanctions, we advise companies conducting business in Turkey, particularly in the defense, intelligence, law enforcement, or aerospace sectors, to assess their exposure with respect to business involving SSB, with emphasis on any transactions in one of these sectors in Turkey where an export license or authorization was utilized. For questions regarding the recently issued Turkey sanctions and other sanctions compliance matters, feel free to contact the attorneys at Torres Law.

Browse by Type

Browse by Practice Area