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Rebuilding Syria: The easing of sanctions after Assad

Posted on 8 July 2025

As Syria begins to rebuild after the fall of President Bashar al-Assad's regime, the question of whether, when, and how to ease the sanctions that were imposed while President Assad was in power has been debated by Western governments. Current sanctions across the UK, EU and US consist of an arms embargo, asset freezing, travel bans, trade sanctions and director disqualifications. Lifting sanctions could play a crucial role in the country's reconstruction and provide economic opportunities both in and outside Syria.  

Steps towards easing sanctions 

Syria's interim President, Ahmed al-Sharaa, faces a major challenge as he looks to restore Syria's much-diminished economy, with the World Bank estimating an 83% contraction in the economy between 2010 and 2024. Rebuilding is made even more difficult as Western sanctions limit foreign investment in the country and Syria's access to the international banking system. These sanctions involve the designation of over 300 persons, which means freezing their funds and economic resources and prohibiting the making of funds or economic resources available to them or for their benefit. 

Recognising the importance of supporting economic recovery and stability in Syria, some countries have begun easing sanctions. On 6 March 2025, the UK removed 24 Syrian entities from its sanctions list, including the Central Bank of Syria and other state-owned bodies such as the Cotton Marketing Organisation and the General Organisation of Tobacco. On 24 April 2025, a further 12 government and media entities were removed from the targeted Syria sanctions list, meaning that they are no longer subject to an asset freeze. 

Similarly, the EU has also taken steps to ease some sanctions, although it continues to monitor the situation in Syria. On 27 January 2025, a 'roadmap' was agreed upon between Member States following a meeting of the Foreign Affairs Council to lift sanctions on Syria. The High Representative of the European Union for Foreign Affairs and Security Policy confirmed that this approach was designed to boost the Syrian economy. Following this, on 24 February 2025, the European Council decided to suspend restrictive measures on the Syrian energy and transport sectors, indefinitely extend existing humanitarian sanctions exemptions, and lift asset freezes over five Syrian entities and the Syrian Central Bank. Most recently, on 28 May 2025, the EU lifted most sanctions on Syria, particularly in relation to its financial system. 

The US has also begun taking steps to ease sanctions, with President Donald Trump announcing on 13 May 2025 that US sanctions on Syria would be lifted and then signing an executive order on 30 June 2025 ending US sanctions against Syria. Since the initial announcement, the Treasury Department lifted regulations banning US citizens and companies from making most financial transactions with Syrian citizens and the State Department announced it was suspending for six months sanctions imposed under the 2019 Caesar Syria Civilian Protection Act.  

Roadblocks to easing sanctions 

However, whilst the West seems to be extending an olive branch, there is still a degree of wariness. President Sharaa's prior membership in al-Qaeda and lack of current electoral mandate gives Western democracies reason to pause before too readily removing barriers to foreign investment entering the country. Even as President Trump indicates a willingness to look past this, senators such as Lindsey Graham have demanded hard evidence that Syria will no longer be a state sponsor of terrorism.  

Sectarian violence also gives cause for concern. Hundreds were killed in March 2025 in clashes between Sunni fighters and members of the Alawite sect. While President Trump has been able to overlook this in announcing the removal of sanctions, if sectarian violence worsens, it may put political pressure on the West to maintain sanctions. This can also be seen in the EU's recent announcement of restrictive measures against groups accused of "targeting civilians and especially the Alawite community".  

Who might benefit from relaxation of sanctions 

  1. The rebuild: The permitting of transactions between Syrian banks and EU companies for reconstruction purposes, and the easing of UK and EU restrictions on the energy sector, stands to benefit entities that can invest in the rebuilding of Syria. Foreign contractors should remain cautious, however, as not all UK and EU restrictions have been lifted, particularly those aimed at individuals and entities supporting the Assad regime and specific sectors such as chemical weapons and cultural heritage goods, etc. 
  2. Exporters and importers: The food and cotton sectors will benefit from the easing of sanctions on state-owned suppliers, such as the Cotton Marketing Organisation. The reintroduction of Syria into the global banking system, and the lifting of restrictions on financial entities such as the Central Bank of Syria, will also make it easier for those engaging in exports and imports to facilitate payments.  
  3. Trading partners: Syria's neighbours Turkey and Lebanon, as well as its major trading partner the United Arab Emirates, all stand to benefit from the reopening of their supply chains with Syria. The Syrian economy will also benefit from the opening up of global trade, although it remains to be seen how much the country will be affected by the current volatility following President Trump's announcement of US foreign import tariffs (which are set at 10% for Syrian goods, reduced from an initial 41%).  

Syria's future 

Despite sanctions approaches beginning to relax across US, EU and UK jurisdictions, doing business in Syria will continue to pose challenges. The position may also change and could revert to harsher measures, as we have seen with Iranian sanctions, depending on which direction President Sharaa takes the country, whether further violence breaks out, and what political developments take place in the West. 

Individuals and companies will need to remain compliant with continuing sanctions restrictions and stay carefully abreast of the latest updates in this area. 

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