In a surprise move on May 13, 2025 while addressing the attendees of the Saudi-U.S. Investment Forum in Saudi Arabia, President Trump announced that he would be "ordering the cessation of sanctions against Syria in order to give them a chance at greatness." At the time of the announcement, it was initially unclear how exactly the Administration would enact the "cessation." However, any questions about how the removal of sanctions prohibitions would be implemented – at least initially – were answered on May 23, 2025, when the Department of the Treasury Office of Foreign Assets Control (OFAC) issued General License 25 authorizing many activities previously prohibited under the Syria Sanctions Regulations.
General License 25
A general license essentially operates as an exception to the relevant sanctions regulations and allows U.S. persons to conduct otherwise prohibited activities without the requirement for a specific license from OFAC. By issuing a general license rather than revising or repealing the underlying sanctions regulations, the Administration can more quickly "snap back" the sanctions if Syria does not meet its commitments, which include protecting religious and ethnic minorities and refraining from harboring terrorist organizations.
Authorized Activity
General License (GL) 25 authorizes, among other things:
- Engaging in transactions with the new Government of Syria;
- New investment in Syria;
- The provision of services to Syrian persons;
- Transactions involving Syrian-origin petroleum products; and
- Transactions with certain blocked persons, listed in an Annex to GL 25.
Continued Prohibitions
Importantly, GL 25 does not authorize all transactions related to Syria. For example, transactions that benefit the governments of Iran, North Korea, or Russia remain prohibited. Although the GL provides a list of Specially Designated Nationals (SDNs) that are no longer subject to blocking sanctions, any SDN not listed in the Annex to GL 25 are still subject to sanctions, and transactions with these persons are prohibited. Of note, there are still hundreds of Syrian SDNs.
Department of State Action
Concurrently with OFAC's issuance of GL 25, the Department of State issued a 180-day waiver of mandatory Caesar Syria Civilian Protection Act (Caesar Act) sanctions. According to a Department of State press release, the waiver of the Caesar Act sanctions enables the United States' "partners to make stability-driving investments, and advance Syria's recovery and reconstruction efforts. These waivers will facilitate the provision of electricity, energy, water, and sanitation, and enable a more effective humanitarian response across Syria."
FinCEN Action
Not to be left out, the Department of the Treasury Financial Crimes Enforcement Network (FinCEN) on May 23 moved to allow U.S. financial institutions and foreign bank branches in the U.S. to open correspondent accounts for the Commercial Bank of Syria. This move, along with the authorizations under GL 25, further opens Syria to U.S. and foreign investment and capital flows.
Strict Export Controls Still in Place (For Now)
At the time of writing, the Department of Commerce Bureau of Industry and Security (BIS) has not relaxed strict export controls related to Syria. Parties require a license for the export, reexport, or in-country transfer of any item subject to the Export Administration Regulations (EAR) other than a narrow exception for food and medicine classified as EAR99. However, recent reports indicate that BIS will soon loosen some of its strict export controls on Syria to align with sanctions relaxation.
Syria remains subject to an arms embargo pursuant to the International Traffic in Arms Regulations (ITAR), and we do not expect any changes to the arms embargo anytime soon.
What does this mean for doing business in or with Syria?
The recent actions by multiple U.S. executive agencies certainly relaxes the sanctions environment in Syria. But due to the hundreds of SDNs still operating or based in Syria and the potential for revocation of the GL and reimplementation of Caesar Act sanctions, businesses should remain cautious and continue to conduct intensive due diligence related to any new business in the region.
Much like other countries that have had sanctions removed or relaxed in the past several years, e.g., Myanmar and Sudan, doing business in Syria will remain a risky proposition. However, these actions open the door for previously prohibited transactions that may be especially appealing to certain industry players (e.g., Syria produced over 400,000 barrels of oil per day prior to the civil war) and will hopefully help bring some stability to the long-suffering people of Syria.
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