Treasury Sanctions Companies for Aiding the Syrian Regime
7/9/2014
Action Targets a Petroleum Products Company for Supplying Materials to the Government of Syria, and Two Cover Companies Linked to Syria’s Weapons Programs
WASHINGTON – The U.S. Department of the Treasury today took action to increase pressure on the Syrian regime and those providing support that could aid its military efforts. The Treasury Department designated United Arab Emirates-based Pangates International Corporation Ltd. (Pangates) pursuant to Executive Order (E.O.) 13582 for providing material support for, and goods and services to, the Government of Syria, including SYTROL, a Syrian state oil company sanctioned by the United States. The Treasury Department also designated Syria-based front companies Expert Partners and Megatrade pursuant to E.O. 13382 for acting for or on behalf of the U.S.-sanctioned entity Scientific Studies and Research Center (SSRC), Syria’s government agency responsible for developing and producing non-conventional weapons and ballistic missiles. Both SYTROL and SSRC have been sanctioned by the European Union.
“The Syrian government’s continued violence against its own people is abhorrent,” said Under Secretary for Terrorism and Financial Intelligence David S. Cohen. “Alongside other administration efforts, we remain committed to applying economic and financial pressure on those providing support to the Assad regime.”
From at least 2012 to April 2014, Pangates supplied the Government of Syria, including SYTROL, with a large amount of specialty petroleum products. Although these products can be used for military or civilian purposes, they have limited civilian application in Syria. In January 2012, Pangates arranged to supply the Government of Syria, including SYTROL, with various specialty petroleum products, including automotive gear box oil, turbine oil additives, and marine engine oil. Between January 2012 and April 2012, Pangates supplied the Government of Syria with, among other things, 155 metric tons of the fuel additive MMT, 3,300 metric tons of lubricant oil additives, and 1,000 kilograms of a static dissipator additive (Stadis 450). In early 2012, Pangates participated in providing the Government of Syria with over 4,000 metric tons of base oil (SN900 and SN150). In September 2013, Pangates arranged to have 272 cubic meters of the aviation fuel (AVGAS 100LL) delivered to the Government of Syria. And in April 2014, Pangates helped arrange for 1,000 metric tons of aviation fuel (AVGAS 100LL) to be delivered to the Government of Syria.
Expert Partners and Megatrade are two cover companies used by the SSRC. Expert Partners has been used by the SSRC to procure material that could be used in Syria’s chemical and biological warfare programs and materials intended for elements of the SSRC involved in ballistic missile programs. The SSRC was listed in the Annex to E.O. 13382 in June 2005 for its ties to Syria’s weapons of mass destruction-proliferation activities.
U.S. persons are generally prohibited from engaging in any transactions with the persons identified today, and any assets of those persons subject to U.S. jurisdiction are frozen. From the onset of unrest in Syria to date, the United States has imposed sanctions on nearly 200 individuals and entities, including the Government of Syria, its Central Bank, and affiliated oil companies.
[...]
1) Refer to Introductory Note Common to all Derivative Designation Notices Included in the Research System (System Ed. Note). That note explains the specific criteria used for determining which designation notices are included.
2) The designation of Pangates International Corporation appears to satisfy the criteria described in the Introductory Note. It is possible that the activity resulting in the designation involved a degree of evasive conduct, but OFAC has, subsequent to this designation, made relatively clear that it will "aggressively target for designation any person who provides support to the [Assad] regime, for example by facilitating exports to or imports from the Government of Syria, including government-owned entities, unless such exportation or importation is otherwise exempt or authorized." See OFAC Advisory to the Maritime Petroleum Shipping Community: Sanctions Risks Related to Petroleum Shipments involving Iran and Syria (March, 2019). In practice, oil, arms and major financial services have been the only type of international trade transactions resulting in derivative designations pursuant to EO 13582, but EO 13582 is used a quasi-secondary sanctions authority, at least to cover particularly sensitive transactions.