As Syria begins to look at debt restructuring amid thawing relations with the United States the Senate has voted to repeal the Caesar Act sanctions placed on the former Assad government. This welcome move provides a massive, much needed boost and is another step towards repair for Syria’s economy.
The 2019 Caesar Act restricted US and international co-operation or engagement with the Assad government, seriously hampering the efforts to rebuild Syria’s economy.
The lifting of these restrictions will help the country’s industries – specifically oil – which all but collapsed during the conflict, encouraging the return of foreign companies and investment.
The planned move follows former Middle East advisor and President Trump’s son-in-law Jared Kushner’s comments at the Future Investment Initiative (FII8) Summit in May where he discussed potential economic incentives to encourage countries, namely Syria, to join the Abraham Accords.
While Kushner acknowledged Syria may face potential complications joining the agreement, which aims to improve relations between Arab nations and Israel, he emphasised the significant economic potential and suggested that investors would support such a move if a deal was reached.
Previously, international investors were understandably cautious about the situation in Syria and threat of repercussions from the US government, but the repeal will boost confidence throughout the business community which until now has been strangle-held because so many Syrian business leaders remain sanctioned.
In a bid to move forward regardless Syria’s interim Islamic HTS government has turned its attention to weeding out corruption and illegal activity amongst the corporate empires of ousted Assad’s allies. New president Ahmed al-Sharaa has set up a committee examining these businesses including those of high-profile tycoons Samer Foz and Mohammad Hamsho, whose wide-ranging business interests include pharma, trading, petrochemicals and television production.
Assad-linked companies, specifically those on the US sanctions list, have reportedly had their assets frozen, with the government pressuring businesses to relinquish 40-80% of their company to be redeemed.
Reports suggest Foz and Hamsho returned to Syria and met with senior HTS figures in Damascus earlier this year, agreeing to cooperate with government demands and therefore becoming exempt from any sanctions and being seen as reformed characters.
However it is reported that any businesses who refuse to co-operate will remain on the sanctions list and face thorough examination by the government, or worse, Katerji being a well publicized example.
For the time being, officials and the business community alike are tentatively positive the economy will recover, with Syrian Finance Minister Yisr Barnieh expressing hope repeal will be swift and that sanctions implemented under the Caesar Act will be permanently removed by the end of the year.
Barnieh also believes Syria needs to focus on restoring trust in both the private and public sectors, regaining fiscal credibility, streamlining the country’s complex tax structure and addressing its heavy debt.
It’s estimated Syria will need tens of billions of dollars to rebuild infrastructure, boost the economy and encourage the return of refugees. The lifting of sanctions will go a long way in encouraging foreign investment and aiding the rebuilding of the country as it slowly recovers from 13 years of war.
