With the recent executive order signed by President Donald Trump to lift sanctions on Syria, Damascus finds itself presented with a fresh opportunity for recovery as the U.S. takes its first step towards partial sanction relief, signaling a potential shift in its stance against the ongoing crisis.
This executive order marks the initial phase in dismantling a comprehensive sanctions regime that has targeted Syria since 1979, effectively ending the national emergency declared by the United States regarding Syria in 2004.
Under this new directive, the U.S. Department of State will assess the criteria for suspending the Caesar Act, which had been previously enacted by Congress in 2019, representing a significant move towards loosening restrictions on Syria.
A Pivotal Moment
This decision signifies a crucial juncture in American foreign policy and serves as a major “test moment” for the newly established Syrian government under President Ahmad al-Shara, impacting economic, political, and security dimensions.
The easing of sanctions, particularly the secondary sanctions related to the Central Bank and Syrian banking networks, could reconnect Syria with the global financial system and gradually reintegrate it into both regional and international trade and investment frameworks.
A notable development reflecting this openness was the first electronic financial transfer to and from Syria in over 13 years, which serves as a symbolic yet significant sign of breaking the economic blockade imposed on the country.
A Breath of Fresh Air
This initiative offers substantial opportunities for the Syrian government to revitalize the economy and commence reconstruction efforts, shifting from the restrictive conditions dictated by the Caesar Act and EU sanctions.
It will now be possible for the state to attract investments from neighboring countries, fostering a new environment that might encourage cautious interest from Western companies to explore the Syrian market.
However, this “historic” shift, as characterized by the Syrian Foreign Ministry, is intertwined with a larger challenge: ensuring political reforms and achieving lasting security stability. Although the U.S. has lifted sanctions, Syria remains classified as a “state sponsor of terrorism.”
Furthermore, the U.S. continues to monitor issues pertaining to minority protections, human rights, and political diversity, and indications from the State Department suggest that the decision could be revisited should unacceptable developments arise.
Domestic Arrangements
The Syrian government is expected to intensify its efforts on domestic arrangements and explore new political pathways while addressing security gaps that have been exploited by groups like ISIS, which recently claimed responsibility for a terrorist attack on a church in Damascus.
Trump’s decision resembles a conditional opportunity that remains unvoiced, hinging on tangible internal reforms, stringent security enforcement, and resolution of outstanding human rights issues. U.S. Secretary of State Marco Rubio clearly articulated the possibility of “re-evaluating” the classification of Hayat Tahrir al-Sham as a terrorist organization should a “positive shift” persist.
Syria has been labeled a “state sponsor of terrorism” since 1979, a classification that may take time to lift and significantly deters investment. However, Secretary Rubio mentioned that this designation might change in the near future.
Additionally, it is noteworthy that Israel, which has historically viewed Syria through the lens of Iranian threats, has started to seriously discuss possibilities for normalizing relations with Damascus. Tel Aviv perceives the lifting of sanctions as an opportunity to secure its northern front, particularly if accompanied by new security arrangements that regulate the borders and redefine regional relationships.