Post-Sanctions Syria: With Great Opportunity Comes Great Risk

In May 2025, the United States, the European Union, and the United Kingdom began lifting long-standing sanctions on Syria. The US Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced the issuance of the Syria General License (GL) 25, which authorizes a broad range of transactions previously prohibited by Syrian Sanctions Regulations. According to OFAC’s announcement, the GL 25 is intended “to facilitate activity across all sectors of the Syrian economy.”  At the same time, the US State Department exercised its authority under the Caesar Syria Civilian Protection Act (Caesar Act) to waive, for 180 days, certain mandatory secondary sanctions allowing non-U.S. persons to engage in certain transactions with the Government of Syria.

This significant shift in trade policy is intended to facilitate investment across all sectors of the economy, and aid in Syria’s recovery.  Foreign investment in Syria offers potential business opportunities in rebuilding damaged infrastructure, developing key sectors like energy, manufacturing, tourism, and agriculture, as well as potentially benefiting from Syria’s ongoing economic reforms and potential governmental incentives.  Syria has significant natural resources, including oil and gas, which could be very attractive to investors.

However, with this opportunity comes a host of challenges and risks:  

• Syria remains designated as a State Sponsor of Terrorism; therefore, stringent export controls remain in place under EAR and ITAR. 
• The secondary sanctions waiver is only for 180 days and will be reviewed at that time to determine if it will be extended or not. 
• The situation is in flux, and depending on the evolution of Syria’s political landscape, GL 25 may be amended or revoked without notice.
• Financial institutions may continue to refuse to process payments to or from Syria, despite sanctions relief. 
• The geopolitical situation remains volatile.  At a US Senate hearing on May 20, 2025, US Secretary of State, Marco Rubio warned that the Syrian government may be weeks away from a collapse and a civil war of “epic proportions.”  
• Ongoing presence of military actors and armed groups could affect business operations. 
• The new Syrian government and President al-Sharaa have historically been affiliated with Hay'at Tahrir al-Sham (HTS), which remains a designated Foreign Terrorist Organization (FTO). This potentially creates both criminal liability and sanctions compliance risks.
• There are still prohibitions against transactions with Syrian Specially Designated Nationals (SDNs) and other FTOs.    

The ongoing conflict, instability and security and compliance risks make investing in Syria at this stage a high-risk (possibly high reward) venture.  For companies considering entering or reentering the market in Syria, these dynamics underscore the importance of conducting enhanced due diligence on all potential partners and suppliers in Syria and enlisting legal counsel to monitor the situation carefully to ensure compliance with trade regulations and sanctions.

‍