Syria’s SANCTIONS RELIEF – Economy or RISK?

May 23, 2025, saw the US make a pivotal move with the issuance of General License 25, potentially transforming Syria’s economic outlook while still navigating complex legal waters.

At a Glance

• The US issued General License 25, lifting specific sanctions to promote economic growth in Syria.
• GL 25 enables financial transactions with certain Syrian entities previously under sanctions.
• Syria remains classified as high-risk for investors, necessitating cautious engagement.
• The license is part of the broader strategy for Syria’s economic rehabilitation.

US Pioneers Sanctions Relief

The Trump administration initiated significant sanctions relief for Syria on May 23, 2025, marking a new chapter in US-Syria relations. The relief aims to aid Syrians by facilitating economic activities that were previously banned. This effort follows through on commitments made to recalibrate and potentially cease longstanding sanctions.

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The Office of Foreign Assets Control (OFAC) issued General License 25, a document that enables specified interactions with the Government of Syria and previously barred individuals. Notably, this marks the first significant easing of US sanctions on Syria in roughly 50 years, hinting at a shift in US strategic interests.

Economic Implications and Compliance Risks

General License 25 is designed to invigorate Syria’s economy by allowing new investments, financial services, and transactions linked to Syrian-origin petroleum. However, the change introduces a new set of compliance risks for companies and financial institutions as they navigate this newly adjusted sanctions landscape.

While providing significant economic opportunities, the inherent risks cannot be overlooked as the country is still considered high-risk due to ongoing conflicts, corruption, and narcotraffic concerns. Companies are advised to review their internal compliance policies to safeguard against potential violations.

Remaining Challenges and Next Steps

Despite this stride forward, Syria continues to face numerous challenges. The country remains on the Financial Action Task Force’s “grey list,” indicating increased monitoring requirements. Other permanent US legal restrictions also persist, including terrorism-related designations and export controls.

Moving forward, experts suggest enhancing clarity on economic policies and forging collaborations with Congress and global allies to reassess sanctions framework. Such strategic moves would align the sanctions’ relief with US foreign policies and ultimately support Syria’s people, marking a detailed and cautious progression in international relations.