After Assad's Fall: What Is the Significance of Lifting Sanctions on Syria?

Following the fall of Bashar al-Assad's regime on December 8, 2024, and the formation of a transitional government the next day, the new administration in Syria focused on the crucial task of rebuilding the country’s devastated economy.

However, this process involves the international community, as Syria’s economic recovery begins with the lifting of Western sanctions that have been imposed on the country since 2011 in response to the previous regime’s crackdown on the revolution.

The ousted Assad regime exploited the country’s economic resources to remain in power, draining state assets while being burdened by international sanctions.

These sanctions led to the weakening of the Syrian pound, a decline in economic growth, and rising unemployment, with inflation in Syria reaching 170 percent in July 2023.

Lifting Sanctions

Today, experts argue that the West should ease the financial restrictions imposed on Syria to help revive its economy.

In a meeting on December 17, 2024, in Damascus, Ahmed al-Sharaa, leader of the Military Operations Command in Syria that ousted Bashar al-Assad, emphasized the need for lifting international sanctions to facilitate the return of refugees, noting that the ousted regime “destroyed everything, even state institutions.”

The fallen Assad regime exploited all of Syria's resources to serve its military machine for suppressing the revolution, also relying on Iran and Russia for support against the people.

The country's population is around 25 million, with 15.3 million internally displaced and refugees abroad. Currently, 70% of Syrians are in need of humanitarian aid.

Since 2011, the European Union has imposed sanctions on many members of the Assad regime’s government, military, and intelligence officials by freezing their assets and banning imports and trade with specific companies, in response to the regime’s political crackdown on demonstrators.

In August 2011, the United States tightened sanctions against the Assad regime, including restrictions on imports to Syria, the sale of Syrian oil, and more.

Although the sanctions failed to stop the killing of Syrians by the ousted regime, their continued imposition after the regime’s collapse hinders the recovery of the country in this new era, especially since the regime left behind empty coffers, depleted foreign currency reserves, a crippled economy, and difficult living conditions for Syrians.

Today, the U.S. dollar equals 12,000 Syrian pounds, compared to 50 pounds at the start of the revolution.

By 2022, the UN Economic and Social Commission for Western Asia (ESCWA) and the University of St. Andrews estimated that Syria’s economic losses had exceeded $442 billion.

In September 2023, the ousted regime’s Foreign Minister, Faisal Mekdad, said during a celebration at the Chinese embassy in Syria marking the 74th anniversary of the founding of the People's Republic of China that losses in the country’s oil and gas sectors amounted to $115 billion.

During a visit to Damascus on December 22, 2024, Turkish Foreign Minister Hakan Fidan met with Ahmed al-Sharaa at the People's Palace and called for the lifting of sanctions on Syria “as soon as possible.”

“The international community must mobilize all efforts to rebuild Syria and facilitate the return of displaced people. Sanctions on the previous regime must be lifted quickly to allow for the provision of services,” he said.

UN Special Envoy to Syria Geir Pedersen had also stated during a UN Security Council session on December 18 that lifting sanctions is essential to assist the country.

Syria’s economy remains constrained by the sanctions imposed by the U.S. and the EU, while Western powers struggle to determine how to engage with Syria’s new leadership.

When asked on December 16 if he would support lifting sanctions on Syria, UN Under-Secretary-General for Humanitarian Affairs Tom Fletcher said it “was very early days.”

“It all depends on whether we have this sense of open dialogue and a willingness to really scale up the partnership,” he added.

“This is a very fluid time. Things are in motion and we’ve got to be agile, creative, flexible.”

“It all depends on whether we have a sense of open dialogue and the willingness to expand partnerships."

The Syrian Network for Human Rights has called for lifting the economic and political sanctions imposed on Syria following the collapse of the Assad regime.

In a statement on December 16, the organization argued that the sanctions, originally intended to hold the regime accountable for crimes against humanity, now threaten to hinder recovery efforts in Syria.

It emphasized the urgent need to rebuild infrastructure, restore essential services, and facilitate the return of refugees and internally displaced persons.

The human rights group urged the international community to tie the lifting of sanctions on state institutions to transparent monitoring mechanisms, ensuring that funds are not misused by corrupt entities.

The recommendations include reforming financial institutions, supporting international reconstruction efforts, and cooperating with civil society organizations to enhance transparency and justice.

The Independent Monitoring Group, which has long supported sanctions against individuals involved in human rights violations, stressed maintaining restrictions on approximately 300 individuals from the former regime, including Bashar al-Assad and his key associates.

There are calls in Syria to abolish the U.S. Caesar Act, which was passed in 2020 to protect civilians in Syria, imposing sanctions on the ousted Assad regime and any countries cooperating with it across most sectors.

Sensitivity of Next Phase

In this context, Syrian researcher and director of the Iqtisadi website, Younes al-Karim, told Al-Estiklal that “lifting the sanctions on Syria has positive outcomes, with the first being the ease of financial flow to the government, which would help stabilize the country’s currency and reinforce security.”

“Lifting the sanctions will help Syria acquire equipment and spare parts for the oil and aviation sectors, which will help revitalize the economy.”

“It will also encourage renewed cooperation with Arab countries to develop road networks, facilitating travel between Syrian provinces,” the Syrian researcher further explained.

“Syria's return to regional and global transport organizations will also make it easier to develop the aviation sector.”

Al-Karim highlighted that “lifting the sanctions will facilitate imports and trade, improving the availability of goods through activating banks and obtaining letters of credit. It will attract foreign investments and allow investors to consider Syria as a new destination.”

The Syrian General Authority for Maritime Transport and the ships it owns have been subject to U.S. sanctions since 2015 due to their role in supporting the military machine used to suppress the Syrian people.

The Syrian aviation sector has also suffered due to the lack of air traffic in Syrian skies, in addition to the ongoing Western sanctions on the government’s aviation sector.

The persistence of U.S. and European sanctions on Syria's Civil Aviation Authority hinders the repair of navigational equipment and the procurement of essential supplies and logistics.

As long as Syria’s Civil Aviation Authority remains under sanctions, the sector relies on private transportation and the permission for foreign aircraft to fly over Syrian airspace, especially Arab flights.

It is crucial to increase air traffic over Syrian skies today, allowing the new government to secure contracts from private companies to operate its air services amid shortages of aircraft and spare parts.

Al-Karim also emphasized that “the lifting of sanctions should not apply to individuals and warlords affiliated with the fallen Assad regime, as it would facilitate their financial transactions and deprive the new Syrian economy of these embezzled funds accumulated over years and decades.”

“Lifting the sanctions is linked to the political process in Syria and ensuring that the current new administration does not monopolize power,” he said.

French Foreign Minister Jean-Noel Barrot stated on December 18, 2024, that lifting sanctions on Syria and providing reconstruction aid should be conditional on clear political and security commitments from the new administration in Damascus.

A Message of Reassurance

Currently, Syria's central bank reserves of foreign currency are nearly nonexistent, a situation that hampers the country’s ability to purchase necessities such as food, fuel, and spare parts.

Before 2011, oil accounted for two-thirds of Syria's exports, and agriculture represented nearly a quarter of its economic activity. However, after that year, Bashar al-Assad relied heavily on Iran and Russia for support.

Leaked documents reveal that Iran's debts to the fallen Assad regime were divided between direct financial support, military aid, and oil exports.

Data shows that Russia is one of the largest creditors of the Syrian regime, though the exact size of these debts remains unclear, with the debts accumulating after 2011. These debts are described as “toxic,” meaning the regime borrowed them for illicit purposes, such as suppressing the population and embezzling funds into the personal accounts of Assad's family, without benefiting the country's economy, infrastructure, or other domestic matters.

Osama al-Qadi, head of the Syrian Economic Task Force, told Al-Estiklal, “Economic sanctions, especially on the central bank, should be lifted, and the SWIFT system for international financial transfers should be restored, alongside lifting sanctions on the Syrian government after Assad's fall.”

“Lifting the sanctions will reassure Arab and Western investors, as well as Syrian businessmen abroad.”

“If any Arab or foreign government wants to send a deposit to Syria's central bank, it should not be under economic sanctions, as aid is transferred from one bank to another,” he added.

“Western and Asian investors are eager to participate in Syria’s reconstruction, especially since the country is untapped, with its industrial, tourism, agricultural, education, and oil sectors largely underdeveloped.”

“Therefore, lifting the sanctions sends a political message to the world that Syria and its government are now friendly to all nations.”

The researcher emphasized that Syria's economic revival hinges on the private sector, thriving without monopolies and guided by government oversight of supply-and-demand pricing, as practiced worldwide.

He concluded that the private sector should lead economic development, while the public sector should manage services like the military, police, education, postal services, healthcare, and more.