Sanctions Relief… An Opportunity That Damascus might Waste

Almost a week after U.S. President Donald Trump’s decision to lift sanctions on Syria from the Saudi-American Forum platform, the European Union decided to follow Washington’s lead by lifting its sanctions as well. This move was met with great joy by many Syrians, including those who supported those sanctions during the Assad regime’s time and now justify their lifting as harmful to all Syrians without exception. All of this occurs amid data indicating that 90 percent of Syrians live below the poverty line, with an estimated 60 percent contraction in GDP since 2011, in addition to the destruction of nearly half of the country’s infrastructure and reconstruction costs estimated at several hundred billion dollars.

However, the process of lifting or easing sanctions appears to be somewhat complex and convoluted, given the nature of the ruling authority, its behavior, and governance style. Furthermore, the lifted sanctions could be renewed or new sanctions imposed if there are serious human rights violations, if the regime’s stability conflicts with the interests of Western powers, or if the government of Ahmad al-Sharaa fails to meet the US demands clearly outlined by Trump.

The lifting of sanctions is not merely a victory for the new authority; rather, it signifies a victory for the emerging regional order that Saudi Arabia seeks to lead, with a high degree of harmony with the United States. This regional order aims to sponsor Syria despite the economic and political costs involved and the potential reversal of perceptions—namely, that “those who lift sanctions decide.” The core issue in integrating Syria into the international financial and commercial system is the need for political, economic, legislative, and judicial reforms that satisfy the external parties involved in the process of reintegrating Damascus into the global economy through opportunities such as lifted sanctions and aid incentives.

From Gradual to Immediate Announcement

Trump’s sudden decision came without coordination with other parties imposing sanctions on Syria, especially the United Nations, the European Union, and the United Kingdom, and without consulting Congress, which is responsible for legislating some sanctions. This bypassed bureaucratic procedures and internal consultations. All of this suggests that Trump’s stance was closer to improvisation, driven by the celebratory financial moment in Saudi Arabia and Trump’s indications of possessing absolute powers.

Evidence of this is that the president himself was not familiar with the schedule, nature, or history of the sanctions. He stated shortly after lifting the sanctions that he “did not know that Syria had been under sanctions for such a long time.” Referring to older sanctions, such as those imposed in 1979, 2004, and 2011, does not exempt the president from consulting the Treasury and State Departments, or even from forgetting—since the latest sanctions, called the “Caesar Act,” were enacted in 2019, during his first term.

Regarding the first visit to Damascus after the fall of the Assad regime, which was initiated by the Biden administration through the sending of Assistant Secretary of State Barbara Leaf, the discussions at the Four Seasons Hotel appeared to focus on “ISIS, terrorism, U.S. sanctions, and governance,” as Leaf mentioned in an interview with Robert Satloff, commenting on her meeting with Al-Sharaa. It was evident that “he studied the details of our sanctions regime, and there was not just one set of sanctions. It wasn’t only about the Foreign Terrorist Organization designation for Hay’at Tahrir al-Sham, nor solely about his own designation as a global terrorist.”

Liv, along with the Biden administration behind her, appeared serious about canceling the financial reward for capturing Al-Sharaa and about how the Sudanese path to lifting sanctions could be inspired by the approach taken by the first Trump administration in 2020. That approach involved drawing a roadmap for Sudan to essentially exit its designation as a state supporting terrorism, which implied a gradual process leading to the approval of lifting sanctions.

This gradual approach would have broadened the scope of US and European demands aligned with Washington’s positions, paving the way for the preparation of a wider political process that includes various components and the cessation of violations. It aimed to maintain the core principle of a transitional government tasked with stabilizing the country and securing the political transition.

Perhaps the human rights issue mentioned in Secretary of State Marco Rubio’s speech from Ankara was more like an adjustment to the conditions Trump had called for in exchange for lifting sanctions.

From a technical standpoint, lifting sanctions requires executive orders from the president or legislation enacted by Congress. Presidential sanctions are lifted through the issuance of waivers or the partial or full lifting of sanctions by the president, meaning the president reverses his or his predecessor’s decisions via executive orders. In contrast, sanctions imposed by congressional legislation fall under Congress’s jurisdiction, which sets a time frame for their implementation. Naturally, such sanctions are subject to bargaining between the president and members of Congress, depending on how persuasive the administration team is in convincing Congress.

However, moving between laws allows the president to issue waivers under the Caesar Act, waive sanctions on individuals and entities based on national security considerations, and suspend the law for a renewable 180-day period if the president certifies to Congress that certain conditions are no longer met. The fall of the Assad regime could serve as a valid justification for such a suspension.

Rubio’s exaggerated statements during a congressional hearing are understandable given the possibility that the new authority could fall within weeks rather than months. The aim is to mobilize Congress and expedite the lifting of remaining sanctions or to prevent objections to the president’s suspension of some of them. Of course, there is no concrete evidence supporting Rubio’s claims about the fall of Al-Sharaa’s authority, as his statements appeared improvised and aligned with the Trumpian style of improvisation in Riyadh.

What does Trump want in return for lifting sanctions?

Coordination between Washington, Brussels, and London might have proposed gradual and flexible approaches to support both the emerging authority in Damascus and Syrian society as a whole. However, despite Trump’s announcement of an immediate lifting of sanctions, he called on Damascus to fulfill five conditions that could potentially alter the trajectory of Syrian power. According to Caroline Levitt, the White House press secretary, Trump’s demands were as follows:

1. Sign the Abraham Accords with Israel.
2. Deport all foreign terrorists from Syria.
3. Deport Palestinian terrorists.
4. Assist the United States in preventing the resurgence of ISIS.
5. Take responsibility for the detention centers holding ISIS fighters in northeastern Syria.

Trump’s demands appear to be a mixture of two things: stopping certain actions and committing to undertake others. While the obligation to sign the Abraham Accords requires some time and Israel’s approval regarding the presence of this new and suspicious neighbor, deporting Palestinian leaders seems relatively straightforward given their weak presence in Syria and the lack of Syrian voices opposing such deportation.

In contrast, the pledge to prevent the resurgence of ISIS and to assume responsibility for detention centers rests on two points that work in Shraa’s favor. First, ISIS poses a potential threat to Sharaa’s authority and is a rival with an ideological background that is difficult to contain. Second, fulfilling this demand would facilitate networking with the SDF and coalition forces, as well as enabling a quiet withdrawal of U.S. troops according to timelines that align with Trump’s withdrawal agenda.

Beyond that, Trump’s most challenging demand seems to revolve around the dilemma posed by foreign jihadists. Aside from the links between foreign jihadists and the authorities and societies that have sheltered them over the past decade, their active role within HTS (Hayat Tahrir al-Sham) and the attempt to crudely integrate them into Syrian society and the military—by granting some of their leaders high ranks—complicate the situation further. Sharaa’s dilemma in this regard centers on two issues: the difficulty of repatriating them to their home countries, where they are wanted, especially given the lack of a third country capable of hosting them; and the challenge of engaging in an open military confrontation with the foreign jihadist bloc, estimated at a few thousand fighters, while also risking the possibility of shifting their loyalties toward Sharaa’s opponents, especially ISIS.

Challenges Ahead for Damascus

From the very first days that Sharaa and his team were able to seize control of Damascus, the issue of lifting sanctions was placed high on the agenda. The layers of sanctions were not only imposed on the previous regime but also targeted opposition factions, entities, and individuals, including many who are now in positions of power. Therefore, regional actors supporting Sharaa’s authority—particularly Saudi Arabia and Turkey—had to persuade Trump and the European Union to lift the sanctions as quickly as possible.

It remains uncertain how capable Syrian institutions will be in handling the process flexibly and in facilitating the work of international parties seeking to ensure a smooth implementation of the sanctions relief. Priority will likely be given to funding institutions in the development sector, provided by donor countries to achieve economic stability and oversee the reconstruction process. While Gulf states are expected to be the most prominent and significant donors, the European Union is also expected to play an influential role in providing grants.

Although initial statements by the foreign ministers of Germany and France clarified that they would not support the establishment of Islamic governance structures, it is anticipated that Western oversight will be exercised over the spending process, the nature of development projects, and the rehabilitation of infrastructure.

A key challenge may lie in the Syrian government’s ability to set priorities and balance the development, rehabilitation, and reconstruction efforts across different regions of Syria—without bias or punishing those areas that have conditions for cooperation with Damascus. Managing this delicate balance will be crucial to ensuring equitable and effective recovery.

Additionally, the abundance of funds and the flow of money may lead to misuse and misappropriation, turning many projects into opportunities for individuals to profit through monopolies, clientelism, and cronyism. This could give rise to a new oligarchy that consolidates around the emerging power.

This suggests that undermining financial transparency, delaying institutional reforms, and exploiting aid and grants could hinder the delivery of further assistance, complicate regulation, and reduce oversight by international financial and banking institutions.

Beyond financial concerns, the issues of respecting human rights and halting violations, sectarian and ethnic discrimination remain closely linked to the continuation and sustainability of sanctions relief. There are no guarantees that Damascus will demonstrate sufficient tolerance towards the diverse components of Syrian society, which keeps the threat of renewed armed conflicts alive.

The inclusion of various groups and national reconciliation has already been on the Western agenda—but without success. On the contrary, Damascus continues to push for transforming the state into a factionalized entity that lacks tolerance, equality, and pluralism.

There are other challenges related to international coordination between Washington, Brussels, and London in monitoring money transfer systems and banking operations. Syria still hosts a jihadist bloc and armed groups that the West does not trust, requiring close surveillance. This will make the Syrian banking and financial system subject to ongoing scrutiny and accountability.

Adding to the list of challenges is the issue of legal legislation and the integrity of the judiciary, which must safeguard the rights of investors—both Syrians and foreigners—in legal disputes. This is contingent upon Syria transitioning from a phase of reconstruction to one of development and investment attraction.

The historic opportunity presented by the lifting of sanctions could become a chance for significant social, economic, and political transformations awaiting Syria. However, the behavior of the authorities—its outward openness contrasted with internal rigidity—may cause Syria to miss out on substantial international aid, prosperity, and development opportunities.

In other words, it seems that the new regime may be unable to act wisely with these opportunities, based on the experience of the past six months and its insistence on centralizing decisions and policies within a narrow circle, seeking to control all of the country’s institutions and resources.