U.S. and EU Take Steps Towards Easing Sanctions on Syria

• On May 23, 2025, the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) issued General License No. 25 (“GL 25”) authorizing certain transactions involving Syria and a specified list of blocked persons, including the Government of Syria. OFAC provided guidance regarding GL 25 on May 28, 2025 (the “Guidance”).   
• Also on May 23, 2025, the U.S. State Department issued a 180-day waiver under the Caesar Syria Civilian Protection Act of 2019 (the “Caesar Act”), ensuring that non-U.S. persons cannot be sanctioned for engaging in certain activities otherwise prohibited by the Caesar Act.  
• The Financial Crimes Enforcement Network (“FinCEN”) also provided exceptive relief to permit U.S. financial institutions to maintain correspondent accounts for the Commercial Bank of Syria, with certain conditions.
• Even though these actions are a major step towards the easing of the comprehensive sanctions in place against Syria by the U.S., they do not amount to a permanent removal of the Syria sanctions program.   The executive orders, regulations and statutes that provide the framework for the Syria sanctions program remain on the books. GL 25 and the FinCen relief can be revoked at any time.  In addition, the Caesar Act waiver is time limited and will expire after 180 days unless it is renewed. 
• In addition, there are several restrictions with respect to Syria that remain in place, at least for now, under other U.S. laws, including under U.S. export controls.  Parties interested in doing business with Syria will need to carefully navigate these issues and factor these risks into their transactions and business dealings.  
• On May 28, 2025, the European Union ("EU") adopted legal acts lifting economic restrictive measures on Syria.  However, certain trade and financial restrictions with respect to Syria remain in place and certain Syrian individuals and entities remain subject to asset freeze measures. 

U.S. Developments
On May 23, 2025, just ten days after U.S. President Donald Trump first announced that he would order the lifting of sanctions against Syria as covered in this previous alert, OFAC, the U.S. State Department and FinCEN each took steps to ease sanctions and restrictions on Syria, as set forth below. 

General License 25
On May 23, 2025, OFAC issued GL 25 to enable new investment, transactions with the new Government of Syria, the import of or dealing in petroleum and petroleum products, the provision of services to people and companies, and other private sector activity in Syria.  GL 25 contains two authorizations.  First, it authorizes all transactions prohibited under the Syrian Sanctions Regulations (“SySR”) other than those involving blocked persons.  Second, it authorizes all transactions prohibited under the SySR, the Weapons of Mass Destruction Proliferators Sanctions Regulations, the Iranian Financial Sanctions Regulations, the Global Terrorism Sanctions Regulations (“GTSR”), the Foreign Terrorist Organizations Sanctions Regulations (“FTOSR”), or Executive Order 13574 involving the following list of blocked persons:

• The Government of Syria, as defined in 31 CFR § 542.308, as in existence on or after May 13, 2025, including President Ahmed al-Sharaa and his government; 
• 28 blocked persons listed in the Annex to GL 25 (which include the Central Bank of Syria, Syrian Arab Airlines, the Commercial Bank of Syria, General Petroleum Corporation, and multiple Syrian banks, refineries, and port authorities); and
• Entities in which one or more Annex-listed blocked persons hold, directly or indirectly, a 50 percent or greater aggregate interest. 

On May 28, 2025, OFAC issued Guidance in the form of Frequently Asked Questions regarding GL 25.  The Guidance provides the following examples of authorized transactions under GL 25: telecommunications-related services, power grid infrastructure rehabilitation and other energy related services, health care-related services, education-related services, agricultural-related services, civil-aviation and other transportation services, construction-related services, water and waste management-related services, and financial and investment services.  The Guidance also clarifies that U.S. banks are authorized to process transactions for any activities authorized under GL 25. 

The issuance of GL 25 does not affect other existing general licenses relating to Syria.  The Guidance provides that General License 24 will continue to remain in effect until it expires on July 7, 2025, despite GL 25’s overlap and broadened authorizations for activities covered by General License 24.  Similarly, GL 25 may also overlap with humanitarian-related authorizations in other existing general licenses issued under certain authorities like the GTSR or FTOSR.

GL 25 excludes from its scope and does not authorize the following transactions:

• transactions involving entities or individuals listed on OFAC’s Specially Designated Nationals and Blocked Persons (“SDN”) List that are not listed in the Annex to GL 25, as well as any entity in which one or more of such SDNs own, directly or indirectly, individually or in the aggregate, a 50 percent or greater interest, unless separately authorized;
• transactions related to Syria for or on behalf of the Governments of Russia, Iran, or the Democratic People’s Republic of Korea (“DPRK”), – key supporters of the former Assad regime – or for transfers of goods, technology, software, funds, financing, or services to or from those countries; and
• the unblocking of property or interests in property that were blocked under any OFAC sanctions program as of May 22, 2025.  For example, while GL 25 would authorize transactions by, to, and through the Central Bank of Syria (currently listed in the Annex to the GL), GL 25 does not authorize the unblocking of any property of the Central Bank of Syria. 

GL 25 further specifies that it does not relieve parties from other U.S. regulatory obligations, including export controls obligations under the International Traffic in Arms Regulations (“ITAR”) or the Export Administration Regulations (“EAR”).

Caesar Act Waiver
Concurrently, Secretary of State Marco Rubio issued a “Caesar Act Waiver Certification” pursuant to Section 7432(b)(1) of the the Caesar Act, waiving certain mandatory sanctions for a 180-day period against non-U.S. persons.  The waiver essentially mirrors the authorizations set forth in GL 25, effectively extending the authorizations in GL 25 to non-U.S. persons and ensuring that they will not be subject to secondary sanctions under the Caesar Act for engaging in activity now covered under GL 25.  Note that the Guidance also states that non-U.S. persons do not risk exposure to U.S. sanctions for engaging in activities or facilitating transactions or payments for such activities that would be authorized for U.S. persons pursuant to GL 25. 

Relief Granted by FinCen 
Also on May 23, 2025, FinCEN granted exceptive relief from the prohibition imposed by Section 311 of the USA PATRIOT Act against the Commercial Bank of Syria, authorizing U.S. financial institutions to open and maintain correspondent accounts for the Commercial Bank of Syria under certain conditions.  The Commercial Bank of Syria includes any branch, office, or subsidiary of the Commercial Bank of Syria operating in Syria or in any other jurisdiction, including the Syrian Lebanese Commercial Bank.  U.S. financial institutions continue to be required to meet the due diligence obligations set forth under Section 312 of the USA PATRIOT Act, including the reporting of known or suspected money laundering activity conducted through or involving any correspondent account established, maintained, administered, or managed in the U.S.

Key Considerations Under U.S. Law

• U.S. sanctions relief has been extended to the new Syrian government with the understanding that the country will not offer a safe haven for terrorist organizations and will ensure the security of its religious and ethnic minorities.  The OFAC press release accompanying GL 25 states that the U.S. will continue monitoring Syria’s progress and developments on the ground.  In fact, the Guidance reiterates the U.S.’ commitment to continuing to enforce sanctions against Bashar al-Assad and his enablers, serious human rights abusers, Captagon drug traffickers, and persons involved in terrorist and proliferation activity.  
• The sanctions relief that has been provided by the U.S. thus far has not come in the form of an actual removal of the sanctions on Syria.  GL 25 authorizes transactions that otherwise remain prohibited under the applicable regulations and can be revoked by OFAC at any time. Similarly, the Caesar Act waiver is temporary – it will expire after 180 days unless it is renewed.  The FinCen exception is also revocable in the sole discretion of the Secretary of the Treasury.  Thus, the U.S. retains significant discretion to snap back the sanctions at this point in time.  Even though the U.S. has called GL 25 a “major first step” towards a “cessation of sanctions on Syria,” it remains to be seen what any additional steps will look like and how long it will take to implement those steps.
• GL 25 only authorizes dealings with a limited set of blocked persons.  Transactions with any other blocked persons operating in Syria remain prohibited.  
• The relief issued last week does not impact the extensive export controls in place against Syria.  Syria’s inclusion in Country Group E under the EAR and as a Section 126.1 country under the ITAR places it among the most restricted destinations for U.S. exports.  These classifications result in a comprehensive export embargo, prohibiting the export, reexport, and transfer of most U.S.-origin goods, technology, and defense articles to Syria without specific authorization from the U.S. Department of State or U.S. Department of Commerce.  Parties interested in doing business with Syria need to ensure they continue to comply with their U.S. export controls obligations. 
• Even though GL 25 authorizes dealings with the Government of Syria, including Syrian President Ahmed al-Sharaa and his government, the general license only applies to prohibitions under U.S. sanctions programs.  It does not waive liability under other U.S. laws. To that end, Syria remains a State Sponsor of Terrorism.  This comes with its own set of restrictions, including a ban on U.S. foreign assistance, a prohibition on defense exports and sales, certain controls over exports of dual use items, and the imposition of certain financial restrictions.  In addition, Hay'at Tahrir al-Sham ("HTS"), the ruling party in Syria, is still designated as a Foreign Terrorist Organization (“FTO”).  As a result of this designation, amongst other things, entities and individuals can be subject to criminal liability for providing “material support or resources” to HTS under 18 U.S.C. § 2339B, which is a term that is defined broadly to include the provision of money, services, or training.  In addition, dealings with HTS could also expose parties to liability under the Anti-Terrorism Act ("ATA"), 18 U.S.C. § 2333, which allows U.S. nationals to sue for damages for injury arising out of international acts of terrorism.  The issuance of GL 25 may indicate that the U.S. Department of Justice would not use HTS’ FTO designation to preclude commercial transactions with the Government of Syria; however, because of the lack of clarity and evolving risk, such transactions should be carefully reviewed by parties interested in doing business with Syria. 

EU Developments
On May 20, 2025, the Council of the EU announced the political decision to lift economic sanctions against Syria (hereinafter, the “EU Sanctions against Syria”), aimed at supporting the Syrian people “[r]euniting and rebuilding a new, inclusive, pluralist, peaceful Syria, free from any harmful foreign interference.”  This decision follows a progressive easing process that began on February 24, 2025, and culminated in the formal adoption of EU Regulations lifting most restrictive measures on May 27, 2025, published in the EU Official Journal on May 28, 2025. 

Through two regulations, Regulation (EU) 2025/1098 of May 27, 2025 and Implementing Regulation (EU) 2025/1094 of May 27, 2025 (entered into force on May 29, 2025), amending Regulation (EU) No 36/2012 of January 18, 2012, concerning restrictive measures in view of the situation in Syria, the EU enacted the: 

• lifting of asset freeze measures targeting 24 entities, notably linked to the financial and energy sectors; 
• lifting of some of the trade restrictions that remained in place since February 24, 2025, notably on gold, precious metals, diamonds, luxury goods, and Syrian cultural property; 
• lifting of restrictive measures on the financial sector, including those affecting Member States, the European Investment Bank, and certain Syrian bonds. 

It is important to note that certain Syrian individuals and entities remain listed under the EU asset freeze regime due to their links to the former Assad regime, involvement in chemical weapons development/use, or ties to narcotics trafficking.

In parallel, certain trade and financial restrictions remain in place on security grounds.  The following transactions are still prohibited under the EU Sanctions against Syria:

• the supply to Syria of goods or technologies intended for internal repression; and
• the provision of financing or financial assistance related to Syrian military goods and technologies;
• the supply to Syria of technology or software designed for the monitoring or interception of internet or telephone communications;
• the export of dual-use goods – listed in Annex I of Regulation (EU) 2021/821 – to Syria.

Organizations and entities interested in doing business with or engaging in dealings with Syria should remember that there are also UK and UN sanctions (which are required to be implemented by Member States) in place against Syria.  Accordingly, they will need to continue to carefully consider and manage their legal risks under all applicable legal regimes, including engaging in due diligence to ensure that they are not dealing with persons that continue to be sanctioned.