The US can either undertake major sanctions relief that allows for significant cash flow and economic normalisation for the new Syria or utilise it as leverage against the new HTS-led government
REUTERS
Children eat bread on a street near a flag adopted by the new Syrian rulers after the ousting of Syria's Bashar al-Assad, in Damascus, Syria, December 24, 2024.
The surprise late November offensive in Syria that—within a matter of days—brought decades of al-Assad rule to its knees was a welcome change for the US and its partners. The regime’s departure not only brought an end to a pattern of hostile, maximalist, and inhumane behaviour that proved intolerable for Washington but also suffered a blow to America's greatest adversaries in the region: Iran and Russia.
Yet, while Washington has celebrated the end of al-Assad’s brutal rule, it has done so with caution. For the US, the arrival of an HTS-led transitional government has not translated into a definitive ‘end’ to Syria’s nearly 14-year-long civil war, but a new chapter that encompasses as many risks for security as there are opportunities for long-term stability.
Some of these risks have obvious policy responses, such as dissuading foreign actors like Turkey and Israel from encroaching into contested territory such as Syria’s northeast or Golan Heights. Other risks have proven to be more challenging, even enigmatic, for Washington—chief among them being how to engage with a new Syrian government led by Hay'at Tahrir al-Sham—an organisation that has put on a new ‘face’ as the leader of Syria, but is a still US-designated terrorist organisation.
The prospect of unwinding sanctions against Damascus would be the beginning of a major pivot in US policy towards Syria. For over four decades, Washington has incrementally designed a complex series of wide-ranging sanctions on Syria’s economic sectors, companies, and individuals, tailored to encourage a change in Damascus’ behaviour.
In 1979, Washington designated Syria as a ‘State Sponsor of Terrorism', adding the country to a list that included Iraq, Libya, and South Yemen (now Yemen). The US built upon this approach in 2004, amidst its war in Iraq, signing Executive Order 13338 into law that added further sanctions and restrictions to the Syrian government in response to its support of Hezbollah and encroachment in Lebanon.
The US will likely rely on Arab and European partners to test the waters with HTS first before totally lifting sanctions
The advent of the Arab Spring and the Assad regime's brutal crackdown on protesters—a campaign that quickly transformed into a systematic, discriminatory campaign against its citizens nationwide—marked a new moment for US economic restrictions on Syria. In fact, it began to wield economic sanctions as one of the most popular tools in its toolkit in response to a growing list of the regime's war crimes, strengthened ties with Russia and Iran, engagement in illicit drug production and trafficking, and maximalist behaviour with its neighbours.
Just a month after protests broke out in southern Syria's Daraa against the regime and were met with widespread suppression by the regime, the US issued Executive Order 13572 in April 2011, initiating property blocks against regime officials who were implicated in human rights abuses. Additional steps were taken in May and August of that year, when the Obama administration passed Executive Orders 13573 and 13582, sanctioning higher-level Syrian officials (such as President Bashar al-Assad himself), the Syrian government's property, and beginning restrictions on new investments, importations of Syrian oil, and sale of services by US persons.
The next year, Washington continued to build upon this sanctions regime, imposing additional restrictions in April and May 2012—on the first anniversary of the Syrian revolution—that targeted additional regime-aligned individuals and commercial entities that played roles in the regime's crackdown against its own citizens and sought to evade international sanctions.
After August 2013, economic sanctions were perceived as a way to compensate for the non-interventionist approach set by the Obama administration, following the non-enforced "red line" that President Obama and his advisors put into play.
The largest round of sanctions came with the December 2019 "Caesar Syria Civilian Protection Act," designed after years of regime impunity and continued adversarial behaviour to isolate the regime economically and politically, placing heavy restrictions on regime officials as well as potential players in reconstruction.
Fighters affiliated with Syria's Hayat Tahrir al-Sham (HTS) display Captagon pills seized at a checkpoint they control in Daret Ezza, in northern Aleppo, on April 10, 2022.
Additional sanctions were imposed by the US with the "Captagon Act" of 2022 and "Illicit Anti-Captagon Trafficking Suppression Act" of 2024, designed to restrict Syrian and Lebanese companies and individuals affiliated with the Assad family, the regime's Fourth Armored Division and intelligence apparatus, Hezbollah, and business sector that have contributed to captagon production and/or trafficking.
Over the years, as the hardship of sanctions on Syrian civilians became more and more severe, the US Treasury Office of Foreign Assets Control (OFAC) issued a series of export waivers and licensing policies to counteract the costs of sanctions for everyday Syrians unaffiliated with the regime and its crimes. These initiatives sought to create flexibility in reviewing cases where US individuals and corporations could deliver necessary resources and engage in economic activities in Syria that would not provide support—whether direct or indirect—to the Syrian regime.
The road ahead
The years of civil war and financial ruin in Syria have imposed detrimental effects on the country's basic infrastructure and economic sectors, all of which serve as obstacles to a smooth transition process and revival of Syrian civic engagement. The outsized need for immediate financial relief in Syria has sparked a robust discussion in Washington and in partner capitals about the gradual unwinding of years of complex individual and sectoral sanctions that have been imposed against Syria in response to the regime's malign behaviour.
In its final days, the Biden administration made it clear that sanctions relief was indeed a consideration amongst its agencies. However, how to design, time, and execute this process was still under debate and will likely continue to be under the second iteration of the Trump administration.
Ultimately, Washington's sanctions conundrum has been described as a 'catch-22'. The US can either undertake major sanctions relief that allows for significant cash flow and economic normalisation for the new Syria—something that would support a smooth political transition but risk rewarding HTS too early on. Or alternatively, it could utilise sanctions relief as leverage against the new HTS-led government and reward Damascus only until it has determined that HTS has, in fact, distanced itself from its more hardline terrorist past.
The head of Al-Nusra Front in Syria, Abu Mohammed al-Jolani, giving a speech from an undisclosed location on July 28, 2016.
In the immediate months, the US will likely walk the line between both approaches, largely relying upon its partners in Europe and the region to test the waters with HTS first. Thus far, the US has quietly encouraged countries like the UK and Jordan, the United Nations, and civil society organisations to gauge HTS behaviour, explore its planned policies, and begin discussions about how Damascus plans to revive Syria's economy, set its transition principles, civil society, and comply with international rules.
After a series of engagements to gauge the new Syrian caretaker government, the EU announced that its 27 ministers reached a consensus to begin lifting sanctions on Syria through a 'step-by-step' roadmap, starting with restrictions on Syria's banking, transport, and energy sectors.
This is not to say that the US has not made its own moves. On 19 December, the US State Department's Bureau for Near Eastern Affairs sent a delegation, led by Under Secretary of State Barbara Leaf, to Damascus to meet HTS leader Ahmed al-Sharaa in person.
While their discussion was largely limited to subjects only appropriate for engagements with a designated terrorist entity, such as the release of Austin Tice, who has been missing in Syria for over 12 years, the meeting was significant, marking the first point of contact between the US and a new Syria.
Leaf also outlined what a pathway to normalisation would look like with al-Sharaa, though the exact 'rules of the road' have not been publicly disclosed. To support this meeting, the U.S. formally removed the $10mn bounty placed on HTS leader Ahmed al-Sharaa (who was formally known as Abu Mohammed al-Jolani). The bounty was removed not as a reward for HTS but as a confidence-building measure to allow the US to engage with Syria's new transitional government in the first place.
Days before Trump took office, Biden's administration issued General License 24, relaxing sanctions by opening a six-month window for limited economic transactions, remittances, and energy sales with the new Syrian government.
Syria's new leader, Ahmed al-Sharaa (R), welcomes Saudi Arabia's Foreign Minister Faisal bin Farhan, in Damascus on January 24, 2025.
The US has also issued a waiver to the Foreign Assistance Act, which allows countries such as Oman, Lebanon, Iraq, Kuwait, Jordan, Qatar, Ukraine, the UAE, Turkey, and Saudi Arabia to begin supporting Syria's economic recovery while receiving US assistance—something that was formerly prohibited by the designation of Syria as a State Sponsor of Terrorism.
However, with a new administration led by a president who posted, "This is not our fight. Let it play out. Do not get involved" just two days after the Assad regime fell, it's uncertain whether US governmental agencies will seek to sustain the momentum of engagement and sanctions relief.
With a large batch of American sanctions imposed by the Caesar Act set to 'sunset' this year, the US will refrain from imposing additional sanctions on Syrian individuals, companies, and industries, largely holding onto the potential of delisting organisations and the Syrian government as the biggest 'carrot' to dangle in front of the new HTS-led government.
Damascus may find Washington waiting in the wings for longer than it may like to delist Syria and lift remaining sanctions—even tailoring relief as a tool of leverage to incentivise long-term behavioural change. Ultimately, the US thinks it can throw the 'ball' of economic revitalisation in Syria to the court of its European and Middle Eastern counterparts, encouraging them to test the waters first and begin the groundwork for recovery.
