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As Syria embarks on fragile transition, sanctions stand in the way

The Assad regime is gone, but sanctions on Syria remain. As the country embarks on a long and costly road to recovery, should they be lifted?


15 January 2025

MARSEILLE — Riding a wave of euphoria, thousands of displaced Syrians rushed home after the Assad regime fell nearly six weeks ago. Many found only ruins, their houses razed or heavily damaged and their communities lacking basic services.

The resources needed for Syrians to return home and rebuild are enormous after nearly 14 years of revolution and war. International sanctions, initially imposed on the Assad regime, remain a major obstacle. 

Syria has been under international sanctions for 45 years, and ranks among the most-sanctioned countries in the world. In 2011, the United States (US) and European Union (EU) imposed additional sanctions in response to then-President Bashar al-Assad’s bloody repression of the Syrian uprising. 

Steadily strengthened over the years, US sanctions on Syria reached new heights in 2019 with the passage of the Caesar Act targeting individuals affiliated with the Syrian regime, economic sectors and financial institutions—as well as third parties if they do not respect US sanctions. The legislation was renewed for another five years last month by President Joe Biden.

The Assad regime, targeted by the sanctions that remain in place, ceased to exist on December 8, 2024. Following an 11-day lightning offensive spearheaded by Hayat Tahrir al-Sham (HTS), Assad fled and HTS leader Ahmad al-Sharaa (Abu Muhammad al-Jolani) became the country’s de facto leader. Al-Sharaa appointed a caretaker government to manage the country until March of this year. 

Assad is gone, but the sanctions remain. While the US issued a partial sanctions waiver this month, experts and local authorities say it is not enough, as it is a temporary move that excludes the private investment needed for economic recovery and reconstruction. The EU has yet to issue any sanctions relief, though several member states have called for some—on the transportation, energy and banking sectors—to be temporarily suspended.

Impact of sanctions

While sanctions do not directly target the health, education, agriculture, shelter, water and sanitation sectors, they have indirect negative impacts, according to a 2024 study by the United Nations (UN). Sanctions make it difficult for these sectors to import needed goods and equipment, often leading to shortages or lower quality and costlier imports. Due to sanctions on the energy sector, fuel shortages affect all service sectors.

Sanctions also have drastic effects on the economy and trade. “The strongest impact is by limiting private sector investment,” Syrian economist Karam Shaar told Syria Direct. They also limit the “flow of funds from abroad because of sectoral sanctions on the banking sector,” rendering trade “more difficult,” he explained. The recent US sanctions waiver stops short of lifting sanctions on both sectors, with the exception of non-commercial bank transfers. 

US sanctions relief is “very limited in scope,” Shaar continued. “It focuses basically on humanitarian exemptions” and for the first time allows the funding of Syrian state institutions. Exempted sectors include electricity and oil, which are critical for providing basic services. 

In a country where public services are crumbling, this is a much needed reprieve. Much of Syria only receives electricity from the public grid for two or three hours a day. The new caretaker government has announced plans to increase this to eight hours a day within two months with Qatari and Turkish support.

The US waiver does not allow for “investment in general, be it by the private sector or other countries trying to provide aid for reconstruction,” Shaar said. A 2022 World Bank assessment estimated damages across key cities to be $8.7-11.4 billion.

The US waiver is “necessary, but far from sufficient,” Shaar added. With US President Donald Trump set to take office this month, “this is what the current administration could do without handcuffing the next administration,” he said. 

Even transactions that are not subject to sanctions are often hindered by overcompliance, Syrian humanitarian expert Mohamad Katoub told Syria Direct. Actors in all sectors, including aid organizations, apply sanctions beyond what is legally mandated due to their complexity and the fear of repercussions. 

The “international private sector, businesses [and] banks do a lot of overcompliance, which makes any transaction to Syrian people—whether they live inside Syria or outside Syria—very complicated,” he explained. 

For the humanitarian sector, this means extra vetting, monitoring and reporting, which “causes delays and [requires] more administrative capacity,” Katoub added. As a result, operating costs rise for humanitarian organizations with limited resources due to repeated funding cuts.

“Sanctions will prevent the recovery of our economy and leave the country dependent on foreign aid,” Katoub emphasized. By exclusively financing the aid sector, the state would be circumvented and remain weak, with aid and services—including education, health, water and sanition—left to humanitarian organizations, as has long been the case.

“With the demise of the Assad regime, which was the main reason for imposing these sanctions…it is necessary to fully lift the sanctions to give Syrians a real opportunity to rebuild their country and achieve stability and development,” Eyad Najaz, a spokesperson at the caretaker government’s Ministry of Economy, told Syria Direct. 

While the US sanctions waiver will “facilitate the flow of essential goods and services,” its impact remains “limited due to the temporary nature of the license,” Najaz said. Procurement can take months or even years, especially for infrastructure, meaning the waiver could prevent traders from delivering if they only have short-term visibility. 

Sanctions as leverage

While sanctions were initially conceived to extract concessions from the Assad regime, they have been leveraged for other means in recent weeks. 

EU foreign policy chief Kaja Kallas announced last Sunday that European foreign ministers would meet on January 27 to discuss sanctions relief, adding that any decision would be conditional on inclusion of women and “different groups”—referring to Syria’s religious and ethnic minorities—and “no radicalization.” 

The US has not clarified, at least publicly, what conditions Damascus would need to meet for sanctions to be fully lifted.

“I’m against economic sanctions on my country. This was my position [before] and this is still my position,” Katoub stressed. While he is in favor of targeted sanctions against regime personnel and others involved in war crimes, “the countries who are imposing the [sectoral] sanctions are using them as a political tool rather than as an accountability tool,” he added.

Syrian human rights lawyer Anwar al-Bunni described sanctions on the Assad regime as “great,” saying they contributed to its fall. But now, like Katoub, he believes they should be lifted. “We’re not saying there is a legitimate government in Syria that represents all Syrians. However, the main concern now is the living and economic situation. If this isn’t dealt with quickly, it will affect security,” he said.

Al-Bunni pointed to Lebanon, saying Syria should not remain under sanctions due to Western concerns about HTS. “Hezbollah is on the list of terrorist organizations and it was part of the Lebanese government, but not all of Lebanon was sanctioned because of Hezbollah,” he said.

He believes there are other ways besides sanctions for the international community to exercise pressure, such as withholding recognition by tying Syria’s membership in the United Nations to the establishment of an inclusive interim government.

Still, economic and financial sanctions should only be fully lifted once a transitional government “with support from all Syrians” is formed, though elections need not be a prerequisite, al-Bunni said. “Currently, it’s an interim government that took power through military control, not by virtue of representing the Syrian people,” he said. 

Recent statements by German Foreign Minister Annalena Baerbock have not been clear as to whether her country believes a “new Syrian administration” that is “inclusive and peaceful” must be democratically elected or not. Al-Sharaa has said it could take up to four years for elections to be held.

“It’s impossible for there to be elections now,” al-Bunni stressed. “Currently you can buy the highest number of votes with a food basket. People must be allowed “to rest a little…to eat…to discuss politics…to discuss [political] parties.” 

Like al-Bunni and Katoub, Shaar believes sectoral sanctions must be lifted, as they were imposed for “a set of practices that are no longer in place.” On the other hand, he believes sanctions against regime personnel should remain in place so that the money they stole can “at least in part be returned to the Syrian people.” 

HTS-specific sanctions are another matter. “Counterterrorism sanctions tend to be enforced more stringently and they are also extremely complex,” Shaar explained. HTS, now the leading force within the Military Operations Department controlling most of Syria, is designated as a terrorist organization by the UN, EU and US as a former Al Qaeda affiliate.

Lifting these sanctions should be “contingent upon promises from the caretaker government to deliver on agreed-upon standards for inclusivity, for democratic transition [and] for continuing to denounce the terrorist history of the organization,” Shaar added. “They can later on be lifted permanently if the organization actually delivers on its promises.”

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