A newly signed Executive Order 13224 expands the State and Treasury’s ability to engage financial sanctions against terrorists. With the newly updated executive order, the U.S. can now impose secondary sanctions for any person, business or financial institution found to have handled transactions with all individuals and entities designated as terrorists by the U.S., Ms. Mandelker said in the speech. Of significance is control over foreign financial institutions sanctions include money services businesses, cryptocurrency exchangers and administrators, in addition to banks, she said. Such sanctions would cut off their access to the world’s biggest economy and most-used currency critical to most of the world’s trade and finance.
Under the new rules, the two departments responsible for imposing sanctions no longer need to develop detailed dossiers tying top officials or agents involved in terror groups to specific attacks or acts, said Nathan Sales, the State Department’s top counterterror official. Many of the targets also have operations in Turkey, highlighting a major concern among U.S. officials that lax financial and corporate oversight by the government in Ankara has allowed terror financing and evasion of sanctions to proliferate in the country. The Turkish Embassy in Washington didn’t immediately respond to a request for comment.
E.O. 13224 section 1F(b), gives the secretary of the Treasury, in consultation with the Secretary of State, the ability to take action against bankers and account managers that allow their services to be utilized by terrorists. This new language means that even foreign banks and other companies in the financial industry could lose access to the U.S. dollar if they provide correspondent banking services to terrorists.