The US is lifting sanctions on Syria: what does this mean?

The US is lifting sanctions on Syria: what does this mean?

The US Treasury Department announced last Friday that it would immediately ease broad sanctions on Syria.

This decision was made against the backdrop of the overthrow of Syrian dictator Bashar Assad in December 2024 and the establishment of a transitional government led by Ahmed al-Sharaa, who is on the US terror watch list due to his links to al-Qaeda.

Sharaa met with US President Donald Trump at a high-level summit in Saudi Arabia earlier this month, a meeting that many observers saw as a turning point in the US's shift in stance on Syria.

On May 23, the US Treasury Department issued General License No. 25, authorizing transactions with the new Syrian government, the Central Bank of Syria, and a number of state entities.

Meanwhile, Secretary of State Marco Rubio announced a 180-day waiver of the Caesar Syria Civilian Protection Act, paving the way for new investments and humanitarian projects in critical infrastructure such as water, electricity, and sanitation.

Stopping Caesar's law

The Caesar Act, passed in 2019, is named after a Syrian war refugee who smuggled thousands of photographs documenting mass killings, torture, and abuses in Assad's prisons. The law was designed to punish individuals and organizations that provided material support to the Assad regime and to block foreign investment in any post-war reconstruction that might help him consolidate power.

It has become a key part of US efforts to economically isolate Damascus and limit international actors' re-engagement with Syrian state institutions.

The 180-day waiver announced by Rubio is not a repeal of the Caesar Act, but a temporary suspension of its implementation. It allows foreign governments and businesses to participate in reconstruction efforts and invest in Syria without being subject to U.S. sanctions.

Rubio called the decision a "first step," adding that the administration expects "the Syrian government to take swift action to ensure stability and prevent a return to conflict." He also warned that without support, Syria could "face destruction and a full-scale civil war of epic proportions within weeks."

Who will no longer be subject to sanctions?

The general license includes 28 Syrian individuals and entities that were removed from the sanctions list. These include major state institutions such as the Central Bank of Syria, Syrian Arab Airlines, Cham Wings Airlines, the General Oil Corporation, and the Syrian Radio and Television Commission. Many of these organizations were already cut off from the international financial system. Their removal from the US "blacklist" is considered necessary by the Treasury Department to facilitate financial transactions, resume banking services, and accelerate economic recovery.

It also allows US financial institutions to communicate with their Syrian counterparts. The Financial Crimes Enforcement Network (FinCEN) has granted special privileges to American banks to operate correspondent accounts for the Central Bank of Syria - a step unprecedented since the start of the Syrian conflict.

Economic consequences

Years of conflict, international sanctions, and economic crisis have devastated Syria's economy. Hyperinflation, mass unemployment, and the devaluation of the Syrian pound have made even basic services unreliable.

In response to the new US policy, the International Monetary Fund (IMF) has announced its readiness to provide technical assistance. “Our staff stands ready to support the international community’s efforts to help Syria rebuild its economy as soon as possible,” said Julie Kozak, the IMF’s communications director. The IMF has not issued a formal assessment of the Syrian economy since 2009.

Domestically, the new transitional government led by Sharaa has promised an inclusive approach to governance by appointing ministers from different ethnic and religious communities. Officials have also announced plans to implement reforms to stabilize the currency, restore public services, and reopen trade routes.

The resumption of banking operations and access to international credit have already sparked cautious optimism among business leaders in Damascus and Aleppo.

US conditions and regional dynamics

The lifting of sanctions is conditional. According to the Trump administration, continued relief will depend on Syria removing foreign militants from control and cooperating with international counterterrorism initiatives.

The Treasury Department said the sanctions relief does not apply to individuals or entities associated with the Assad regime, terrorist organizations, or those involved in persistent human rights abuses.

Rubio emphasized the point, saying "we are not giving Syria unlimited freedom" and that any retreat from commitments to reforms or security cooperation would lead to new sanctions. Observers say Sharaa's past, including allegations of involvement in extremist financing, could complicate efforts to fully normalize Syria's position.

The Syrian government and global reactions

The Syrian Foreign Ministry welcomed the US decision, describing it as "a positive step towards alleviating humanitarian and economic hardships." The ministry stressed Damascus's readiness to "strengthen ties with international partners and create a favorable environment for economic recovery and sustainable development."

The international community cautiously supported the move. The European Union and Britain announced partial lifting of their sanctions in line with Washington's move. European Union foreign policy chief Kaia Kallas said the bloc wanted to "help the Syrian people rebuild a new, inclusive and peaceful Syria" but warned that "continued instability or repression cannot be tolerated."

Prepared based on materials from TheNewArab media network