Last month, the US and the EU announced the relaxation of sanctions on Syria.
“It’s their time to shine. We’re taking them all off,” said US President Donald Trump in a speech that sparked an outburst of joy in Damascus.
After 14 years of war, 90% of the Syrian population live beneath the poverty line. Since the Assad regime fell in December, removing the sanctions to kickstart the economy has been a top priority of transitional President Ahmed al-Sharaa, the leader of the victorious rebellion; but Syria has been under severe US restrictions since 1979 and lifting them won’t be simple.
The principal strictures are the 2019 Caesar Syria Civilian Protection Act and the 2003 Syria Accountability and Lebanese Sovereignty Restoration Act (SALSA). Only Congress can fully repeal them, and that will take months, at best. The executive branch can issue temporary waivers, as the Treasury Department did in May, but the real impact on Syrian corporates and finan- cial institutions remains limited.
“Only the full cancellation of US Caesar and SALSA laws, and not just their temporary suspension, could open the door for long-term investment,” argues Samir Aita, president of the Circle of Arab Economists, a Paris-based think tank.
For Syrian banks, which remain largely cut off from global financial networks, rejoining the Swift system for transfer and reporting correspondent banking relationships is first on the agenda. “The Syrian market is very promising; it is almost virgin,” says Ali Awdeh, head of research at the Union of Arab Banks, “but honestly, no banks from the Arab region or elsewhere will dare to enter this market until there is a full lifting of US sanctions.” In Europe, the process is less complicated. Last month, the European Council lifted sanctions on several Syrian companies operating in key sectors like oil production, agriculture, finance, construction, telecoms, and media. Depending on how the situation in Syria develops, other companies could be delisted in the coming months. Restrictions will remain, however, for industries that pose security concerns, such as weapon sales.
