Key Takeaways:
- Executive Order 14312 revokes the six executive orders that formed the foundation of the Syrian Sanctions Program, terminates the national emergency underlying those executive orders and waives and relaxes key statutory restrictions, while maintaining targeted sanctions on Assad-era figures, terrorists and other destabilizing actors.
- Following the order, the U.S. Department of the Treasury's Office of Foreign Assets Control ("OFAC") has removed more than 500 individuals and entities from the Specially Designated Nationals ("SDN") List.
- U.S. persons can now generally engage in transactions with all Syrian financial institutions, except those involving Specially Designated Nationals.
- Syria remains on the U.S. State Sponsor of Terrorism ("SST") list, which means it is still subject to significant legal restrictions, including a comprehensive export controls regime. The SST designation triggers additional restrictions, such as bans on U.S. foreign assistance, arms exports and certain dual-use items, and these remain in effect until Syria is formally removed from the list.
On June 30, 2025, President Trump issued Executive Order 14312 ("E.O. 14312" or the "Order"), which marks a sweeping reversal of U.S. policy toward Syria by formally revoking most of the longstanding U.S. sanctions program that had been in place for decades. It lifts most country-wide restrictions and opens the door to international engagement and reconstruction, while retaining robust mechanisms to sanction individuals and entities that threaten peace, security, or U.S. interests.
E.O. 14312
Background & Policy Shift
E.O. 14312 terminates the national emergency declared in Executive Order 13338 ("E.O. 13338") with respect to Syria, which had, together with several subsequent executive orders – including E.O.s 13399, 13460, 13572, 13573, 13582, and 13606 – served as the legal foundation for a broad array of sanctions and trade restrictions on Syria since 2004. The termination of the national emergency is a pivotal legal and policy development. Under the National Emergencies Act ("NEA"), a national emergency declaration is the statutory trigger that allows the president to exercise extraordinary powers, including the imposition of economic sanctions under the International Emergency Economic Powers Act ("IEEPA"). By terminating the national emergency, E.O. 14312 removes the legal basis for the broad, country-wide sanctions program against Syria. This means that the prohibitions and restrictions that were in place solely because of the national emergency are no longer operative. However, the order specifies that this termination does not affect any action taken or proceeding pending as of July 1, 2025, nor does it affect any rights, duties, or penalties that matured or were incurred prior to that date. In practical terms, the termination of the national emergency marks the end of the U.S. government's use of emergency powers to maintain a comprehensive embargo on Syria, shifting instead to a more targeted, list-based approach focused on accountability for past abuses and ongoing threats.
Additionally, the order revokes six foundational executive orders – E.O.s 13338, 13399, 13460, 13572, 13573, and 13582 – that collectively formed the backbone of the U.S. Syria sanctions program. These orders, along with statutory authorities such as the Syria Accountability and Lebanese Sovereignty Restoration Act of 2003 ("Syria Accountability Act"), the Chemical and Biological Weapons Control and Warfare Elimination Act of 1991 ("CBW Act"), and the Caesar Syria Civilian Protection Act of 2019 ("Caesar Act"), had created a near-total embargo on Syria, targeting its government, its financial institutions and a wide range of individuals and entities associated with the Assad regime. OFAC has also removed the Syrian Sanctions Regulations (31 C.F.R. part 542) from the Code of Federal Regulations, and more than 500 individuals and entities previously designated solely under these authorities have been removed from the SDN List and unblocked. This new policy move recognizes the collapse of the Assad regime and the emergence of a new government under President Ahmed al-Sharaa as a fundamental change in circumstances.
The scope of E.O. 14312 is broad: it lifts prohibitions on new investment in Syria, the provision of services, and transactions involving Syrian-origin oil, petroleum, and other energy products. It also lifts all sanctions on Syrian banks. U.S. persons, including banks and companies, are now generally authorized to engage in commercial activity with Syria, provided that none of the involved parties are subject to other sanctions programs. The order also waives restrictions on foreign assistance, U.S. government credit, and financial assistance to Syria, as well as the extension of loans or credit by U.S. financial institutions to the Syrian government under the CBW Act.
At the statutory level, beyond the termination of the president's emergency powers under the IEEPA and NEA with regards to Syria, the executive order also waives the application of certain export controls mandated by the Syria Accountability Act, which required a license for the export of any item subject to the Export Administration Regulations ("EAR") to Syria (with the exception of food and medicine classified as EAR99). This paves the way for the U.S. Department of Commerce's Bureau of Industry and Security ("BIS") to relax the strict export controls that have been in place (BIS has indicated it is working to do so, but regulatory changes have not yet been made).
Additionally, E.O. 14312 directs the Secretary of State to examine whether the criteria for suspending sanctions under the Caesar Act have been met. While the order does not repeal the Caesar Act (which would require congressional action), the Secretary of State may suspend, in whole or in part, the imposition of secondary sanctions for renewable periods of up to 180 days, provided that the statutory criteria are satisfied and Congress is notified. The current waiver, issued on May 23, 2025, remains in effect, but the Caesar Act's statutory framework and congressional oversight remain significant constraints on the administration's ability to provide permanent relief.
Accountability for the Former Regime
While the Order lifts the comprehensive sanctions program, it simultaneously establishes a new framework for targeted sanctions under the Promoting Accountability for Assad and Regional Stabilization Sanctions ("PAARSS") program. This new regime maintains and imposes sanctions on additional individuals and entities associated with the former Assad regime, including Bashar al-Assad himself, his family, senior officials, and those complicit in war crimes, human rights abuses, narcotics trafficking (notably Captagon production and trade) and the proliferation of chemical weapons. The Order also preserves sanctions on actors linked to ISIS, al-Qaeda and Iranian proxies, ensuring that the shift in policy does not inadvertently empower groups that threaten regional stability or U.S. interests.
Review of Counterterrorism Designations
A key feature of E.O. 14312 is its direction to the Secretary of State to review and potentially revise several high-profile terrorism-related designations. Specifically, the order instructs the Secretary to take "all appropriate action" regarding the designation of Hay'at Tahrir al-Sham ("HTS") – the ruling party in Syria which toppled the Assad regime – as a Foreign Terrorist Organization ("FTO") and as a Specially Designated Global Terrorist ("SDGT"), and its leader, President Ahmed al-Sharaa (formerly known as Abu Muhammad al-Jawlani), as a SDGT. The order also calls for a review of Syria's designation as a State Sponsor of Terrorism ("SST"). In the weeks following the order, the U.S. government has revoked the FTO designation for HTS and is reviewing Ahmed al-Sharaa's designation as an SDGT, reflecting the new Syrian government's commitment to counterterrorism and distancing itself from its former jihadist affiliations. Additionally, the process to remove Syria from the SST list has been initiated, though this requires a formal report to Congress and is subject to statutory criteria and congressional review. However, both HTS and Ahmed al-Sharaa remain designated under United Nations Security Council sanctions, which the U.S. and all other UN member states are obligated to implement until such time as the UN formally removes these designations.
UN Engagement
E.O. 14312 also addresses the international dimension of sanctions relief. The order directs the Secretary of State to take appropriate steps at the United Nations to advance U.S. policy objectives in support of a stable and peaceful Syria. This includes exploring avenues for sanctions relief at the UN level, particularly to support Syria's efforts to counter terrorism and comply with its obligations regarding weapons of mass destruction. The U.S. aims to coordinate with international partners to ensure that sanctions relief is aligned with broader goals of regional security, humanitarian access and nonproliferation. The order signals a willingness to work through the UN to provide multilateral support for Syria's reconstruction and reintegration into the international community, while retaining the ability to reimpose sanctions if necessary.
Adjustments to the SDN List
In connection with the implementation of E.O. 14312, OFAC removed 518 individuals and entities from the SDN List sanctioned under the Syria sanctions program, noting that these individuals and entities are "critical to Syria's development, the operation of its government, and the rebuilding of the country's social fabric." These include high-level government officials, military personnel and members of key industries. For example, all Syrian financial institutions, including the Central Bank of Syria, have been delisted from the SDN List, thereby lifting previous prohibitions on U.S. persons engaging in transactions with these entities and paving the way for the reintegration of Syria's financial industry into the global financial system. Further, several Syrian airlines, including Syrian Arab Airlines (state-owned) and Cham Wings Airlines (private), have been delisted, allowing them to resume access to global destinations.
Parallel to the removals and to ensure continued accountability for the former Assad regime, OFAC designated 139 individuals and entities affiliated with the regime. The designations result in the blocking of all property and interests in property of the designated persons that are in the U.S. or in the possession or control of U.S. persons. U.S. persons are generally prohibited from engaging in transactions with these designated parties.
Implications for Financial Institutions
As a result of E.O. 14312, all Syrian financial institutions, including the Central Bank of Syria, have been removed from the SDN List. Therefore, as confirmed in OFAC FAQ 1221, U.S. persons are now permitted to provide financial services to Syria, process payments on behalf of third country financial institutions involving Syrian financial institutions and conduct transactions with the new Government of Syria and Syrian financial institutions (unless an SDN is involved). Moreover, U.S. financial institutions are now permitted to establish correspondent banking relationships with Syrian financial institutions.
However, OFAC emphasized that financial institutions must continue to employ a robust, risk-based sanctions compliance program and update their controls to reflect these regulatory changes and in consideration of new business lines.
Key Developments to Monitor
The regulatory and compliance landscape related to Syria remains dynamic and subject to further change. Several key developments should be closely monitored in the coming months:
State Department Actions
The E.O. directed the Secretary of State to review and potentially revise several high-profile terrorism-related designations, including the FTO, SDGT, and SST designations of HTS, its leader President Ahmed al-Sharaa, and Syria. As mentioned, the Secretary of State has revoked the FTO designation for HTS, and one should expect to see other delisting activities, actions to obtain a partial or full suspension of sanctions under the Caesar Act, and the U.S.'s multilateral engagement, including at the UN.
OFAC Implementation
As discussed, OFAC has already removed the Syrian Sanctions Regulations and delisted over 500 individuals and entities. However, numerous individuals and entities sanctioned under the former Syria-related sanctions program remain on the SDN List. OFAC is expected to continue to update the SDN List, including by adding those associated with the former Assad regime and other destabilizing actors. Thus, parties seeking to do business in Syria should remain vigilant and continue to screen parties involved in the transactions against the SDN List and other relevant restricted parties lists. In addition, companies should keep in mind that entities owned 50% or more by SDNs, directly or indirectly, whether individually or in the aggregate, are subject to sanctions under OFAC's 50 Percent Rule, even if the entities themselves are not on the SDN List.
Export Controls
While the E.O. waives certain export controls mandated by the Syria Accountability Act and the CBW Act, the precise scope and practical effect of these waivers on existing export control restrictions remain subject to further clarification. BIS is expected to undertake regulatory action to amend the EAR and potentially relax or eliminate some of the longstanding controls on exports to Syria. However, until these changes are formally implemented, strict export license requirements remain in place for items destined for Syria.
Additionally, as directed by the E.O., the State Department will engage with Congress regarding the waiver determinations and the potential suspension of certain export controls, particularly under the Syria Accountability Act and the CBW Act. This process, along with ongoing congressional oversight, may influence the timing and extent of any further export controls relief.
General Compliance
The order does not address the broader compliance and governance challenges facing Syrian institutions, nor does it provide detailed guidance on the benchmarks or conditions that will govern the future reimposition or further lifting of sanctions. As a result, while E.O. 14312 represents a dramatic shift in U.S. policy, the practical landscape for compliance and engagement with Syria remains complex and subject to ongoing legal and regulatory developments.
Preparing for the Reopening of the Syrian Market
With the lifting of most country-wide sanctions and the relaxation of export controls on the horizon, the Syrian market is poised for renewed international engagement and commercial activity. That said, it is also important to recognize that non-legal challenges remain, including political instability, geopolitical tensions in the region and terrorism related concerns. Companies considering business activities in Syria should carefully navigate these challenges and adopt a comprehensive risk-based approach. Such companies should consider the following steps:
- Monitor Regulatory Developments: Stay abreast of further actions by OFAC, the Department of Commerce, and the State Department, as well as any new actions taken by government agencies in the EU and UK, and by the UN. Such guidance may clarify the scope of permissible activities and the status of specific individuals or entities.
- Conduct Enhanced Due Diligence and Compliance Assessments: Carefully screen all Syrian counterparties and other parties to a transaction to ensure they are not subject to remaining U.S. or other international sanctions, particularly those associated with the former Assad regime, terrorist organizations, or other destabilizing actors. One should recall that entities owned 50% or more by SDNs remain subject to sanctions under OFAC's 50 Percent Rule. In addition to regular screening, companies should conduct thorough compliance assessments of counterparties to ensure that they have effective sanctions and export controls compliance programs in place.
- Update Compliance Programs: Revise and strengthen sanctions compliance policies and procedures to reflect the new regulatory environment as relating to Syria. This includes updating internal controls, training staff and monitoring ongoing changes to the SDN List and export control regulations.
- Assess Business Opportunities: The removal of broad restrictions opens the door to new investment, trade and the provision of services in Syria. However, companies should remain mindful of the remaining sanctions and export control restrictions, both under U.S. laws and under laws of other relevant jurisdictions.
- Build Protections into Contracts: Incorporate robust sanctions and export controls compliance clauses into contracts with Syrian counterparties. These provisions should require ongoing compliance with applicable laws and regulations, and may include representations, warranties and covenants regarding compliance with applicable sanctions and other cross-border compliance laws.
- Conduct Regular Audits: Before and after entering into a transaction, consider conducting compliance assessments and audits. This will help ensure continued compliance with sanctions and export controls and allows for the timely identification and remediation of any issues that may arise.
- Work with Trusted and Experienced Counsel: Given the complexity and evolving nature of the regulatory landscape, companies should work closely with trusted and experienced legal counsel to navigate the risks and ensure compliance with applicable legal requirements.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
