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Legal Update

European Union Tightens Sanctions Against Syria, Including an Oil Embargo

7 September 2011
Mayer Brown Legal Update

The European Union has adopted new sanctions against Syria, including an oil embargo, that entered into force on 3 September 2011 and build upon EU sanctions that became effective on 10 May 2011. The United States strengthened its sanctions against Syria on 18 August 2011.

As of 10 May 2011, EU Council Regulation 442/2011 implemented restrictions on:

  • The sale, supply, transfer or export, directly or indirectly, of equipment listed in Annex I of the Regulation, which could be used for internal repression, as well as restrictions on the provision of technical assistance or brokering services for this equipment;
  • The provision of technical assistance related to goods and technology on the EU’s Common Military List or related to the provision, manufacture, maintenance and use of the same, to any person or entity in Syria or for use in Syria;
  • The provision of direct or indirect financing or financial assistance related to goods on the Common Military List or the equipment listed in Annex I; and
  • The provision of funds or economic resources to certain listed persons and entities identified by the EU Council as being responsible for the repression of the Syrian population, or persons associated with such persons and entities. The list of designated persons and entities has been amended several times since Regulation 442/2011 came into force.

The new Council Regulation 878/2011 adds an embargo that prohibits importation into the European Union any crude oil or petroleum products that originate, or have been exported, from Syria (regardless of origin), or the purchase of such crude oil or petroleum products if they are located in or originated from Syria. Purchases of crude oil or petroleum products that were exported from Syria before 2 September 2011 are permitted, as is the export of crude oil and petroleum products before 15 November 2011, if executed pursuant to a contract that was concluded before 2 September 2011.

As a result of this oil embargo, a Council Decision (2001/523/EU), published on 2 September 2011, has partially suspended those Articles of the EU-Syria Cooperation Agreement that relate to the free movement of crude oil and petroleum products into the European Union, and the purchase, transport and provision of financial assistance for the same.

It is not only the purchase and export of crude oil or petroleum products from Syria that are prohibited, but also the transport of crude oil or petroleum products that originate in Syria or that are being exported from Syria to any (EU or non-EU) country. The EU sanctions regime is applicable within EU territory and also to (i) any vessel under the jurisdiction of an EU Member State, (ii) any EU national wherever located and (iii) any entity incorporated or constituted under the law of a Member State. Thus, the sanctions regime effectively bars EU entities and persons from transporting Syrian oil even when the end destination is not the European Union. This is expected to have a larger effect than the US sanctions regime against Syria as more than 90 percent of Syria’s petroleum-related exports are reported to be exported via Europe.

Under the new Regulation, financial institutions and the insurance and re-insurance industry are no longer permitted “to provide, directly or indirectly, financing or financial assistance, including financial derivatives, as well as insurance and re-insurance” related to the prohibition on the transport, import or purchase of crude oil and petroleum products from Syria. However, contractual obligations in existence before 2 September 2011 can be executed until 15 November 2011, as long as the competent Member State authority is notified seven working days in advance.

For more information about the EU sanctions against Syria, please contact or . For information about the US sanctions, please contact or .

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