U.S. and EU Sanctions against Syria

The EU policy of sanctions against the Syrian Arab Republic lacks the time-proven complex practices honed by the U.S. government against Damascus. However, the unique feature of the EU sanctions against Syria is the speed at which they are imposed. The EU has been looked upon as a rather cumbersome organization, especially given its enlargement and the consensus rule. In the past, EU sanction regimes were enforced and tightened very slowly. However, the speed at which the entire package of sanctions against Syria was agreed upon is astonishing by EU standards. In addition, the EU is legitimizing its actions by referring to the policy of the Arab League that shut the door on the possibility of a Syrian official to attend the organization’s meetings, and to the fact that the sanctions are imposed in unison with the United States. Thus, the EU showed “Atlantic unity” and supported the “democratic revolutions” in the Middle East.

The vagueness and breadth of the sanctions permeated an atmosphere of over-compliance that also affected donor governments, businesses and NGOs, causing many of them to shun even small projects. Some Gulf Arab states have signaled that they might be willing to support reconstruction, perhaps hoping to get Syria out of Iran’s orbit. But for now, they are hesitant to take the risk. For the same reason, Damascus’ other allies—Russia and Iran—which, however, have already done a lot to preserve the Syrian statehood, are constrained. Despite proposals to adjust and clarify the position of the U.S. and EU in terms of Damascus taking certain steps in exchange for the easing of the sanction regime, such efforts have never been made by either side.

At this point, the Syrian issue is far from the core of global politics. Meanwhile, the situation in the country could be on the downward path again if there is inadequate care towards the ceasefire, the political process and settlement as well as post-conflict reconstruction. What’s more, cholera cases have been reported increasingly often in recent weeks. Says Geir Pedersen, the UN Special Representative for Syria: “The situation in Syria is getting more difficult every day in terms of economic conditions, ... nine out of 10 Syrians living in poverty and more than 14 million people being in need of humanitarian assistance.” In addition to the direct effects of the war and mismanagement, Syria’s economy is also affected by U.S. and EU sanctions.

Igor Matveev:
Settling the Syrian Conflict Amid the Ukrainian Crisis: Political Economy Perspective

The EU policy of sanctions against the Syrian Arab Republic lacks the time-proven complex practices honed by the U.S. government against Damascus [1] . U.S. sanctions were first imposed on Syria in 1979, when the U.S. recognized Syria as a state sponsor of terrorism (this move was caused by the dynamics in Arab-Israeli affairs at that time). The second wave of U.S. sanctions rolled over Syria in 2003, when the U.S. Congress passed the Syria Accountability and Restoration of Lebanese Sovereignty Act (SALSRA).

The SALSRA Act and decree were adopted in response to the Syrian government’s “support of terrorist groups, continued military presence in Lebanon, aspiration for weapons of mass destruction and attempts at undermining the U.S. and international efforts aimed at stabilization and reconstruction of Iraq.” The latter was most painful for the U.S., as American intelligence reported Syria’s increased influence on the processes taking place in Iraq.

Just to remind: the U.S. invaded Iraq in 2003, overthrowing the regime of President Saddam Hussein, being then confronted by a fierce anti-occupation movement. The Americans believed that the activity they dubbed “terrorism” was directed from Damascus, one of terror sponsors. With this SALSRA Act and subsequent Executive Orders (like Executive Order 13338 of May 11, 2004 – Blocking Property of Certain Persons and Prohibiting the Export of Certain Goods to Syria), the sanctions evolved from a list-based to a sector-based approach. On May 11, 2004, high-ranking Syrian generals, including Rustom Ghazali, Ghazi Kanaan, and even Assef Shawkat, were sanctioned under Decree 13338. The sanctions also applied to entire organizations and government agencies. On the same day, the U.S. Treasury Department identified the country’s largest Commercial Bank of Syria (CBS), along with its subsidiary Syrian Lebanese Commercial Bank, as the financial institution of primary money laundering concern. The Americans alleged that Saddam had laundered funds from illegal oil sales through this bank, and it also held the accounts of those who financed al-Qaeda terrorist leader Osama bin Laden. The decision was made in accordance with Section 311 of the USA PATRIOT Act of 2001, passed in the wake of September 11, 2001.

But this package of sanctions was generally not too frightful for the regime stability either. Syria had extensive regional and international ties as well as plenty of tools and opportunities to avoid their negative consequences. Yet, the sanctions spiral kept unwinding.

Arab Spring and EU sanctions on Syria

And then in 2011-2012, not only the U.S. but also – for the first time – the EU imposed sanctions on Syria “in response to the brutal oppression of civilians by the Assad regime”. It is the European sanctions that are more significant for Damascus, because economic ties with the EU were much more important for Syria than any contacts with the United States. In 2011, the EU accounted for 21% of Syrian global trade, whereas Syrian crude oil exports to the EU stood at 27.4% of total exports in 2010.

Alexey Khlebnikov:
Russia’s Approach to Cross-Border Aid Delivery to Syria

Bilateral relations between the EU and Syria are governed by a cooperation agreement signed in 1977. However, it was suspended in 2011 with regard to trade in crude oil, petroleum products, gold, precious metals and diamonds. Bilateral trade was also affected by EU restrictive measures against Syria, such as the “ban on imports of crude oil and petroleum products, as well as export restrictions on dual-use goods, crucial oil-gas equipment and technology, certain telecommunications equipment and luxury articles. Restrictive measures imposed by the EU also apply to the financial and transport sectors, financing of certain enterprises and infrastructure projects in Syria. The EU had frozen funds and economic resources of individuals and corporate entities that supported and/or benefitted from the Syrian regime.” Thus, the key measures—oil embargo and restrictions in the banking sector—were intended by Europeans to deprive Assad of major revenues that helped him maintain the regime and take reprisals.

Another unique feature of the EU sanctions against Syria is the speed at which they are imposed. The EU has been looked upon as a rather cumbersome organization, especially given its enlargement and the consensus rule. In the past, EU sanction regimes were enforced and tightened very slowly. However, the speed at which the entire package of sanctions against Syria was agreed upon is astonishing by EU standards. In addition, the EU is legitimizing its actions by referring to the policy of the Arab League that shut the door on the possibility of a Syrian official to attend the organization’s meetings, and to the fact that the sanctions are imposed in unison with the United States. Thus, the EU showed “Atlantic unity” and supported the “democratic revolutions” in the Middle East.

The results of this EU policy are rather controversial. After the withdrawal from the EU-Syria partnership agreements and the imposition of the sanctions, the EU’s influence in the region has actually weakened. The EU faced growing humanitarian costs (especially due to the refugee crisis) and a mounting threat of extremism. Due to the EU’s restrictive measures, total trade in goods between the EU and Syria was estimated at EUR 393 million as of 2020. Although Syria is insignificant for the EU, ranking 136th on the list of EU trading partners in 2020, the EU is still the biggest trading partner for Syria, accounting for 8.7% of the country’s global merchandise trade.

Humanitarian activities and Caesar’s Law

The EU pours a lot more impressive sums into the humanitarian aid for Syrian refugees and various charity programs, both inside Syria and in the region. Since 2011, the EU has raked up more than EUR 24.8 billion.

Even humanitarian activities, however, have been at stake for two reasons. The first one is the security of international NGOs helping the population reeling under the rule of terrorist groups in certain Syrian provinces. For example, funding for NGOs in Idlib went into a nosedive in January-February 2019 after the terrorist organization Hayat Tahrir al-Sham established complete dominance over that province. The second factor is the Caesar sanctions package and over-compliance with the sanction regime. In July 2020, the U.S. president signed the Caesar Syria Civilian Protection Act or the Caesar Act that anticipated new sanctions against Damascus. A fundamental distinction of the 2020 U.S. measures is their extraterritorial nature. The Americans were empowered to impose secondary sanctions. While the sanctions imposed by the U.S. and the EU were called to slacken Syria’s political system, they mainly took a toll on the Syrian population in reality. The sanctions policy leads to hidden schemes, governance paralysis, devastation and migration, but it does not change the political agenda of the sanctions target.

Ruslan Mamedov:
Syria: Rules-Based International Order Creates Humanitarian Rule, Not Law?

Prior to the Caesar Act, the Gulf states, such as the UAE, had expressed their willingness to allocate funds for the reconstruction of Damascus. Saudi Arabia was also eyeing this possibility, despite COVID-19 and the economic fallout. But sanctions have affected the plans of the Arab monarchies. Furthermore, the European Union is in thrall to the U.S. sanctions policy in the new environment. Even if the EU tried to lift some of its sanctions in exchange for specific moves by Damascus, Europe would automatically fall under the secondary U.S. sanctions. Thus, the Syrians’ hope for post-war reconstruction and foreign investments is frustrated mainly due to U.S. sanctions, which became comprehensive in 2020. Joe Biden, who replaced Donald Trump as U.S. president, retained the strategy of his predecessor in terms of sanction pressure on Damascus.

The vagueness and breadth of the sanctions permeated an atmosphere of over-compliance that also affected donor governments, businesses and NGOs, causing many of them to shun even small projects. Some Gulf Arab states have signaled that they might be willing to support reconstruction, perhaps hoping to get Syria out of Iran’s orbit. But for now, they are hesitant to take the risk. For the same reason, Damascus’ other allies—Russia and Iran—which, however, have already done a lot to preserve the Syrian statehood, are constrained. Despite proposals to adjust and clarify the position of the U.S. and EU in terms of Damascus taking certain steps in exchange for the easing of the sanction regime, such efforts have never been made by either side.

1. For more detail see the author’s work US Sanctions Against Syria in https://russiancouncil.ru/upload/iblock/692/sanctions_policy_2020.pdf С. 359.