Briefings

EU Imposes Turkey asset freezes

The EU has now made its first designations under the Turkey sanctions.

These are limited to two individuals, both connected with Turkish Petroleum Corporation (TPAO) – see below. TPAO has not been designated at this time, and nor have Yavuz or Fatih, the vessels referred to below.

Our pre-Christmas briefing set out the background to the EU's adoption of a legal framework to impose asset freezing measures against certain individuals and entities in Turkey. The framework was adopted in response to Turkish drilling activities in the Eastern Mediterranean and Aegean Sea.

The effect of the asset freeze is that it is now prohibited to make any funds or economic resources available, directly or indirectly, to or for the benefit of these two individuals. That does not prevent dealing with TPAO itself or the two vessels.

The EU has identified the following grounds for listing:

• Mehmet Ferruh Akalin is Vice-President (Assistant General Manager) and member of the Board of Directors of the Turkish Petroleum Corporation (TPAO). He is the head of TPAO’s Exploration, R&D Centre and Information Technologies Departments.
• In his capacity as TPAO Vice-President and head of its Exploration Department, Mehmet Ferruh Akalin is responsible for planning, directing and implementing TPAO’s offshore hydrocarbon exploration activities. These include TPAO’s drilling activities which have not been authorised by the Republic of Cyprus, as set out below.
• Those unauthorised drilling activities were carried out by: (a) the TPAO drilling vessel Yavuz in the territorial sea of the Republic of Cyprus between July and September 2019; (b) the TPAO drilling vessel Yavuz in an area of the exclusive economic zone of the Republic of Cyprus notified by it to the United Nations and delimited in an agreement with Egypt, between October 2019 and January 2020; (c) the TPAO drilling vessel Fatih in the exclusive economic zone of the Republic of Cyprus notified by it to the United Nations, in close proximity to its territorial sea, since November 2019; (d) the TPAO drilling vessel Fatih in a western area of the exclusive economic zone of the Republic of Cyprus notified by it to the United Nations, between May and November 2019. TPAO has also announced further planned drilling activities to be carried out, without the authorisation of the Republic of Cyprus, by the TPAO drilling vessel Yavuz in an area of the exclusive economic zone of the Republic of Cyprus notified by it to the United Nations and delimited in agreements with Egypt and Israel, between January and May 2020.
• Ali Coscun Namoglu is the Deputy Director of the Exploration Department of the Turkish Petroleum Corporation (TPAO).
• In this capacity, Ali Coscun Namoglu is involved in planning, directing and implementing TPAO’s offshore hydrocarbon exploration activities. These include TPAO’s drilling activities which have not been authorised by Republic of Cyprus as set out below.
• Those unauthorised drilling activities were carried out by: (a) the TPAO drilling vessel Yavuz in the territorial sea of the Republic of Cyprus between July and September 2019; (b) the TPAO drilling vessel Yavuz in an area of the exclusive economic zone of the Republic of Cyprus notified by it to the United Nations and delimited in an agreement with Egypt, between October 2019 and January 2020; (c) the TPAO drilling vessel Fatih in the exclusive economic zone of the Republic of Cyprus notified by it to the United Nations, in close proximity to its territorial sea, since November 2019; (d) the TPAO drilling vessel Fatih in a western area of the exclusive economic zone of the Republic of Cyprus notified by it to the United Nations, between May and November 2019.
• TPAO has also announced further planned drilling activities to be carried out, without the authorisation of the Republic of Cyprus, by the TPAO drilling vessel Yavuz in an area of the exclusive economic zone of the Republic of Cyprus notified by it to the United Nations and delimited in agreements with Egypt and Israel, between January and May 2020.

These asset freeze measures are relatively limited in scope. Nevertheless it is advisable for persons conducting business in Turkey to review their activities and confirm they are not dealing with the two individuals.

If you determine that you are holding funds belonging to or otherwise dealing with designated individuals, you may wish to seek legal advice to ensure compliance with your obligations.

The position is liable to change at short notice, and we recommend that the position is kept under review.

For more information, please contact:

Daniel Martin
Partner, London
T +44 (0)20 7264 8189
E daniel.martin@hfw.com