Earlier this week President Obama issued a new Executive Order enabling the Secretary of the Treasury to impose tight restrictions on entities deemed to be helping the evasion of U.S. sanctions on Syria and Iran.

Sanctions evading has been big business in certain corners of the world for years if not decades.  While U.S. persons evading the sanctions can be penalized by civil and criminal penalties, this new executive order threatens third country as well as Iranian and Syrian entities that have a role in evading sanctions. What can evading sanctions be? Consider banks that cover up payment instructions related to Iran or third country companies that are effective fronts for Syrian and Iranian entities (e.g., a company in say, a third Middle Eastern country that is effectively buying U.S. goods for one of these two sanctioned countries). This could substantially put a damper not just on companies used to skirt sanctions on dual use goods such as computer chips and sensitive machinery but also on companies dealing in comparatively innocuous products.

What this Executive Order will likely lead to is more entities abroad being designated, and therefore preventing that entity from dealings with U.S. persons. It also heightens the responsibilities of third country entities.