On Friday, U.S. President Donald Trump's administration issued directives it claimed would effectively lift sanctions on Syria, following Trump’s pledge earlier this month to remove such measures in order to support Syria’s reconstruction after a devastating civil war.
The U.S. Treasury Department issued a general license authorizing transactions involving the interim Syrian government led by President Ahmad al-Shar’a, as well as the Central Bank and state-owned enterprises.
In a statement, the Treasury said the general license “authorizes transactions prohibited under the Syrian sanctions regulations, effectively lifting the sanctions imposed on Syria.”
The statement added, “The general license will enable new investments and private sector activities in line with the president’s ‘America First’ strategy.”
Secretary of State Marco Rubio stated in a press release that he had granted a 180-day exemption from the Caesar Act sanctions to ensure they do not hinder investment and to facilitate the provision of electricity, energy, water, healthcare, and humanitarian aid.
Rubio added, “Today’s actions represent the first step in realizing the president’s vision for a new relationship between Syria and the United States,” noting that Trump expects reciprocal steps from the Syrian government following the easing of sanctions.
After Trump met with al-Shar’a a few days earlier, the White House stated that the president requested Syria to meet several conditions in exchange for sanctions relief, including the departure of all foreign militants from Syrian territory, the deportation of what he called Palestinian terrorists, and cooperation with the United States in preventing the resurgence of the Islamic State group.
Rubio said, “President Trump is offering the Syrian government an opportunity to promote peace and stability both within Syria and in its relations with neighboring countries.”
On Saturday, Syria officially welcomed the lifting of U.S. economic sanctions, calling it “a positive step in the right direction” as authorities aim to accelerate economic recovery and improve relations with Western nations after a 14-year conflict.
In a statement from the Foreign Ministry, Syrian authorities praised “the U.S. government's decision to lift the sanctions imposed on Syria and its people for many years.” The statement described the move as “a positive step toward alleviating the humanitarian and economic suffering in the country.”
Syria also expressed “gratitude to all countries, institutions, and peoples that stood by it,” affirming that “the next phase will be one of rebuilding what the former regime destroyed and restoring Syria’s natural position in the region and the world.”
The 2020 Caesar Act imposed strict sanctions on Assad’s associates and any entity or company dealing with Syrian authorities. It also targeted the construction, oil, and gas sectors and prohibited Washington from providing reconstruction aid.
The war and sanctions hindered the rehabilitation of service infrastructure and rendered transactions with the Syrian banking sector nearly impossible.
The U.S. sanctions relief, followed by the European Union’s complete lifting of sanctions on Syria earlier this week, comes as authorities attempt to jumpstart economic recovery after years of war that depleted resources and destroyed infrastructure, crippling the state’s ability to provide essential services such as electricity and fuel.
Additionally, the World Bank announced that Saudi Arabia and Qatar had settled about $15.5 million in debts owed by Syria, paving the way for the resumption of its programs after a 14-year hiatus.
“The country is on the path of recovery and development,” the Bank said in a statement, adding that its first project with the new Syrian government would focus on improving electricity services.
Some U.S. sanctions on Syria date back to 1979.
Syria is relying on support from friendly and Western countries to launch a reconstruction phase that the United Nations estimates will cost more than $400 billion.
Despite optimism surrounding the lifting of sanctions, analysts believe the immediate impact may be limited and will require several measures by the authorities. Sanctions relief alone is not sufficient to revive the economy; a conducive investment environment and transparency in awarding major investment contracts are also essential.
Since Trump’s announcement, the Syrian pound has appreciated on the black market, with the exchange rate reaching about 9,000 pounds per dollar, after having neared 13,000 — a change experts consider “temporary,” driven by the psychological effect of the sanctions removal.
Syrians Hope for the Recovery of a Weary Economy
In a financial institution he manages in central Damascus, Anas al-Shamaa hopes the lifting of Western sanctions will ease money transfers to and from Syria, after years of war that isolated the country's economy and banking system from the world.
“We hope the Syrian economy will start to recover gradually and swiftly,” al-Shamaa, 45, told AFP. “We also hope the Central Bank will reconnect with global banks and facilitate trade flows.”
He added, “Merchants should be able to transfer money abroad directly without complications, and expatriates should be able to send remittances to their families” — something that had become nearly impossible in recent years due to restrictions, exacerbating the suffering of citizens who depended on relatives abroad.
With Washington and the EU lifting long-standing sanctions, Syrians hope for economic revival, though economists caution that recovery will take time and require more than just sanctions relief, given the lack of a supportive investment climate to attract investors and capital.
The recent EU sanctions relief specifically targeted the banking system, which had been excluded from international markets after the freezing of Central Bank assets and a ban on transactions with it.
The 14-year conflict drained Syria’s economy and resources. Official international money transfers became nearly impossible due to Western sanctions targeting any entity dealing with Syrian financial institutions. Much of these sanctions were imposed in response to the Assad regime’s violent crackdown on the peaceful protests that began in 2011 and eventually escalated into a brutal armed conflict.
Al-Shamaa, who has run a currency exchange and remittance company since 2008, described the war and sanctions as having rendered the economy a “lifeless corpse.”
He said, “Banking operations deteriorated, and we became completely isolated from the world,” leading to the cessation of incoming remittances and preventing traders from paying for imported goods.
Following Trump’s announcement from Riyadh, the local currency improved on the black market, reaching 8,500 pounds per dollar, down from nearly 13,000 — an improvement economists consider “temporary,” driven by the psychological impact of sanctions relief.
Mohammad al-Halabi, a 25-year-old economics graduate, hopes the lifting of sanctions will end the need to use the black market for money transfers, which typically strips about 30% of the transfer amount.
“With the sanctions lifted, a transfer should take just a click,” he told AFP.
Economic researcher Benjamin Fave told AFP, “With the general lifting of sanctions on Syria, we expect an increasing pace of infrastructure reconstruction — roads, hospitals, schools.” He anticipated that countries such as Saudi Arabia, Qatar, and Turkey, which have ties with the new government, would speed up trade and investment, particularly in reconstruction.
However, sectors like energy and banking require “large investments and much longer timelines” in a process Fave estimated would take “several more months.” Fave works with the Karam Shaar Consultancy.
Reintegrating Syria’s banking system into the global financial network requires action on many fronts. “Before European banks, for instance, renew their correspondent relationships with Syrian banks, they will need to assess compliance with anti-money laundering and counter-terrorism financing standards — an area in which Syria lags significantly,” Fave explained.
Sanctions relief alone is not enough to revive the economy. The authorities must foster an investment-friendly environment and ensure transparency in major contracts.
No new investment laws or economic reforms have been announced by the new authorities, after decades of institutional corruption that eroded the business environment.
A Syrian businessman operating between Dubai and Damascus told AFP anonymously that he has long wanted to expand his investments in Syria since Assad’s ouster. “I’ve knocked on many doors, but I still don’t know the steps, laws, or regulations I need to follow.”
In his electronics store in Damascus, Zohair Fawwal, 36, does not expect the sanctions relief to impact his daily life immediately. “All I hope for now,” he said, “is that apps like Netflix and TikTok start working again in Syria.”
What Is the State of the Syrian Economy?
According to World Bank estimates, Syria’s economy is valued at about $21 billion — roughly equivalent to that of Albania or Armenia, both of which have populations more than 20 million fewer than Syria.
Official Syrian data shows that the economy shrank by more than half between 2010 and 2022. The World Bank believes even that figure may underestimate the true decline, estimating an 83% contraction between 2010 and 2024.
Syria was reclassified as a low-income country in 2018, with more than 90% of its roughly 25 million people living below the poverty line, according to UN agencies.
Economic turmoil worsened in 2019 when neighboring Lebanon plunged into crisis, given the extensive economic and financial links between the two countries. Damascus then adopted multiple exchange rates for different transactions to protect its scarce hard currency reserves.
After the new government took office in December, the Central Bank pledged to unify the official exchange rate for the Syrian pound.
Maisaa Sabreen was appointed as the Central Bank governor, becoming the first woman to hold this position in the institution’s 70-year history.
On Wednesday, the exchange rate stood at 11,065 pounds to the U.S. dollar — compared to black market rates of around 22,000 pounds per dollar during Assad’s fall last year and 47 pounds in March 2011 when the war broke out.
The government stated that its debt stands between $20 and $23 billion, mostly in bilateral loans. However, actual debt may be significantly higher, as Syria could face claims from Iran and Russia ranging between $30 and $50 billion.
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