An overhead view of the Marota City construction project, from an October 2018 promotional video.
AMMAN: The European Union on Monday announced sanctions against 11 prominent Syrian businessmen and five business entities, many of them connected to a controversial reconstruction project already underway in southwestern Damascus, for “supporting and benefiting from the Assad regime including through the use of expropriated property.”
The news comes as a delegation of Syrian businesspeople, including a prominent government-linked figure previously sanctioned by the US government, gathered in Abu Dhabi in the United Arab Emirates (UAE) this week, where they are reportedly discussing trade relations as well as redevelopments in government-held areas of Syria.
Several of the individuals sanctioned by the European Union (EU) are known investors in the “Marota City” project, ostensibly a reconstruction development in southwestern Damascus that analysts and human rights groups anticipate will see formerly working-class, pro-opposition communities replaced by shining skyscrapers and malls.
Included in the EU sanctions list is Samer Foz, chairman of the Aman Group that has already invested millions into the Damascus development, and Mazen al-Tarazi, a Syrian businessman with ties to Kuwait known to have invested some $320 million into the project through a deal with the Damascus Cham Holding Company.
Many of the names are nominally from Syria’s private sector, although with close ties to key officials in the government and its security apparatus.
The EU announced Monday that it was placing sanctions on leading businessmen “making large profits through their ties with the regime and [who] are helping to finance the regime in return,” including through joint ventures “formed by certain prominent businessmen and entities with State-backed companies to develop expropriated land.”
“Those businessmen and entities are supporting and benefiting from the Assad regime including through the use of expropriated property,” the announcement added.
The Marota development, widely criticized by rights groups, is currently being built over the former neighborhood of Basateen a-Razi—a working-class informal settlement that was the site of early protests against Assad’s government.
The EU sanctions list concerning Syria “now includes 270 persons and 72 entities targeted by a travel ban and an asset freeze,” a press release said Monday.
Existing sanctions also include an oil embargo, restrictions on certain investments, a freeze of Syrian central bank assets held in the EU as well as export restrictions on equipment and technology that could be used for internal repression, the EU statement added.
UAE private sector talks to ‘open new horizons’
The latest sanctions come as a delegation of Syrian businessmen headed to the UAE this week, seemingly in an attempt to reopen business ties between the two former trading partners.
The meetings point to an ever-growing rapprochement between Syria and Gulf states, a month after the UAE announced its intention to reopen its embassy in Damascus.
Analysts suggest that the Syrian government may be looking to diversify revenue for redevelopment that has—until now—been made more difficult as a result of sanctions and diplomatic isolation following years of brutal repression and conflict.
According to Syrian state news agency SANA, Syrian delegates arriving to UAE talks on Sunday emphasized the importance of “reactivating and opening new horizons for investments and trade,” adding that “Syria’s [recovery] from terrorism provides a stable investment environment” for the future.
A construction vehicle bearing the Aman Group logo at the Marota City construction site, in an October 2018 promotional video.
Presented as a timely and welcome conference between Syrian and Emirati businesspeople from the two countries’ respective private sectors, the delegation includes at least one government-linked business figure part of the inner circle of Syrian President Bashar al-Assad. Heading this week’s delegation was Mohammad Hamsho, one of Syria’s most prominent business figures, who has ties to key players in Damascus, including President Assad, his brother Maher and increasingly—according to reports—Syria’s Iranian allies.
In 2011, the US Treasury Department imposed sanctions on Hamsho, founder of the Hamsho Group business empire that comprised cement, contracting and other branches, following the outbreak of the anti-government uprising.
The Treasury Department’s statement said it placed sanctions on Hamsho for “providing services in support of, and for acting for or on behalf of Syrian President Bashar al-[Assad]” and acting on behalf of Assad’s brother, Fourth Division commander Maher al-Assad.
Hamsho was a significant figure both for the Syrian government and business community. Not long before the eve of the uprising, Hamsho’s company was contracted to construct the luxury Yasmeen-Rotana Hotel project in southwestern Damascus’ al-Mezzeh district, in part through contracts with Syrian and UAE companies.
Syria Direct could not independently verify if any of the individuals newly sanctioned by the EU on Monday headed to the UAE as part of this week’s delegation.
Regional rapprochement with Damascus
More and more states in the region are making positive noise about reopening ties with Damascus, after Sudanese President Omar al-Bashir travelled to Damascus to meet with Assad earlier this month.
Amid this week’s Arab Economic Summit in Lebanon, speculation has also grown about the possibility of Syria being readmitted to the Arab League for the first time since 2011.
At the end of December, both the UAE and Bahrain announced that they would reopen their embassies in Damascus for the first time in years.
The Gulf could provide Damascus with much needed political, as well as economic capital, as Syria increasingly pushes a narrative of a county victorious emerging from several years fighting what it calls “terrorist” groups.
According to analyst Thomas Pierret, Senior Researcher at CNRS-IREMAM, Aix-en-Provence, the UAE in particular could be a starting place for Damascus to reopen diplomatic and businesses ties, because of the Gulf state’s historically pragmatic policy towards Syria compared with some of its neighbors.
While the UAE backed opposition groups fighting Assad’s forces after 2011, Pierret said that support was “less about opposing Assad than opposing Assad’s opponents,” in other words to “counter the influence of Qatari and Turkish clients [in the Syrian opposition], and in particular the Muslim Brotherhood and any group related to the [them].”
“That was the main rationale for their involvement in the process,” Pierret told Syria Direct.
The Syrian business delegation in Abu Dhabi on Sunday. Photo courtesy of SANA.
At the same time, though, the Emirati government never completely severed ties with Damascus, with Syrian consular staff remaining in place in the UAE. And Dubai has been an important conduit for financial assets of Syrian government officials and government-linked individuals in recent years.
However, Gulf states like the UAE could soon play more of a role in Syria’s controversial reconstruction efforts.
The international community has routinely hinged support for reconstruction on a political solution in Syria. Meanwhile, Syria’s main allies—Iran and Russia—likely lack the domestic economic clout and stability to support a rebuilding effort that the World Bank previously estimated could cost as much as $350 billion.
Private sector investments from neighboring countries with an interest in a stable Syria could provide a stopgap for real estate, construction and reconstruction projects in the short-term.
Several senior members of the delegation currently in the UAE are linked to the Damascus Cham Holding Company that is funding the “Marota City” development in southwestern Damascus—including Damascus Cham chief executive Nasoub a-Nabulsi and Waseem al-Qattan, head of the Outer Damascus Chamber of Commerce, which is also involved in the project.
Damascus Cham was established in late 2016 to fund the Marota project. It has already signed contracts with several companies, not least Samer Foz’s Aman Group.
Foz, one of the 11 businessmen sanctioned by the EU on Monday, reportedly signed a deal with Damascus Cham to build several glass-fronted high rises on the southwestern Damascus site.
The Foz-owned TV channel Lana TV also routinely airs advertisements for the project, referring to it as a new “landmark” for the Syrian capital.
A Lana TV ad for the Marota Project.
“Marota City,” as it’s now known in government circles, was once Basateen a-Razi—a plot of farming land and informal housing in southwestern Damascus that developed over decades leading up to the 2011 uprising.
The area was typical of the kind of informal settlements that developed in and around Syrian cities after the 1970s, due to a lack of consistent urban planning and spiralling rural-urban migration in the decades afterwards.
A site of protests against Assad’s government between 2011 and 2012, and then early clashes between the Syrian army and rebels, Basateen a-Razi’s original residents were later evicted—with promises of compensation or shares in future developments—in line with Decree 66 for the year 2012, signed by President Assad in September of that year.
Farmland and then housing were later razed, before construction began. Using a new network of dust roadways where once there were homes, construction vehicles ferry building materials back and forth across the site.
Decree 66 would become the blueprint for a later piece of legislation, Law 10 for the year 2018, which human rights groups have warned legalizes the dispossession and possibly permanent displacement of countless Syrians from their pre-war homes.
“Much of these urban development projects that we’re seeing emerging now around Damascus are also highly political projects,” concerned with redesigning city spaces and urban communities with an interest in control, while directing a “great deal of punishment against pro-opposition communities, some of which will be permanently displaced,” Pierret told Syria Direct.
Law 10 developments in several suburbs of the Syrian capital are set to begin later this year.
The latest EU sanctions will likely make it significantly harder for prohibited individuals and entities to implement ongoing redevelopment plans for skyscrapers, malls and high-end residences largely aimed at upper middle-class Damascene families.
Even so, some analysts suggest that Gulf investment in construction projects could provide the beginnings of much-needed capital for Syrian businesses looking to cash in on the destruction and reconstruction of whole swathes of the country, not just in southwestern Damascus.
According to Swiss-Syrian academic and activist Joseph Daher, who has researched the patronage networks forming around Syria’s reconstruction, “what might be an early investment is real estate, and what Syria and the whole region is more and more looking to in terms of economic policies is PPPs [private-public partnerships],” that effectively “open up infrastructure [projects] to investors.”
In the current economic framework pursued by the government, Daher said, “major projects need raw and private capital—they can’t do it otherwise.”