U.S., EU, and UK Move to Ease Sanctions on Syria, but Compliance Complexity Remains

Key Takeaways:

• In a sweeping policy reversal unveiled in Riyadh on May 13, 2025, President Trump pledged to lift the entire U.S. sanctions regime on Syria.
• Although the Trump administration seeks quick sanctions relief for President Ahmed al-Sharaa’s new Syrian government, executive action alone cannot singlehandedly eliminate the Syrian sanctions program due to its current statutory framework. In particular, the Caesar Syria Civilian Protection Act of 2019 (the “Caesar Act”) requires congressional action for any significant lifting of Syria-related restrictions and would thereby restrict the Trump administration’s plans to lift all sanctions against Syria. Organizations and individuals interested in doing business with Syria will therefore need to carefully navigate the sanctions regime, taking care to comply with all applicable sanctions until they are fully lifted.
• In addition, the lifting of sanctions on Syria will not necessarily impact specific individuals and entities located in Syria on the Specially Designated Nationals and Blocked Persons (“SDN”) List, especially those sanctioned under other sanctions programs (e.g., the Russia sanctions program or under the Counter Terrorism sanctions program). Parties engaging in transactions involving Syria will need to continue to engage in proper due diligence when engaging in transactions involving Syria.
• There is uncertainty as to whether policy changes would affect only economic sanctions or also the stringent export controls currently imposed on Syria by the U.S.
• The European Union (“EU”) and the United Kingdom (“UK”) have also coordinated a gradual and conditional easing of sanctions on Syria, including removing certain entities from asset freeze lists, suspending some sectoral sanctions, and partially lifting financial restrictions to support Syria’s political and economic recovery. However, significant restrictions remain in place, and both jurisdictions retain the flexibility to reimpose sanctions, if necessary.

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On May 13, 2025, U.S. President Donald Trump announced that he will “order the cessation of sanctions against Syria in order to give them a chance at greatness.” The policy shift, revealed during a speech at a Saudi-U.S. investment forum in Riyadh on May 13, 2025, was framed as a direct response to appeals from Saudi Crown Prince Mohammed bin Salman and Turkish President Recep Tayyip Erdogan to bolster the interim government led by President Ahmed al-Sharaa, the former insurgent commander who helped oust Bashar al-Assad on December 8, 2024. As of yet, however, no sanctions have actually been lifted by the U.S. 

Issues the Trump Administration Faces in Carrying Out Its Planned Rollback of Syria Sanctions

Although the Trump administration seeks to provide quick sanctions relief to the new Syrian government, a presidential executive order or action by the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) would not be able to completely do away with the current Syrian sanctions program – in part due to the U.S. statutory scheme in place that requires congressional action.

Caesar Syria Civilian Protection Act

The Caesar Act, the principal U.S. statutory framework that, since being enacted in December 2019, has authorized secondary sanctions on entities supporting the former Assad regime with the primary purpose being to address and deter human rights abuses committed by the Syrian government, particularly those involving violence against civilians during the Syrian civil war. The wholesale lifting of Syria-related restrictions would, as a matter of law, require either the exercise of suspension authority under the Caesar Act or congressional action to amend or repeal it. The Caesar Act’s significance therefore looms large in determining how – and how quickly – the administration can translate its policy intent into legally effective relief. On May 15, 2025, Secretary of State Marco Rubio indicated that the Trump administration intends to issue waivers to Syria sanctions and does not currently plan to fully repeal them. “As we make progress, hopefully we’ll be in a position soon, or one day, to go to Congress and ask them to permanently remove the sanctions,” Rubio added. Secretary Rubio noted that under the Caesar Act the waivers must be renewed every 180 days and acknowledged that relying on waivers rather than repealing the Caesar Act is a deterrent to long-term investment in Syria.

The Caesar Act mandates that the U.S. government impose sanctions on a foreign person that:

• knowingly provides significant financial, material or technological support, or knowingly engages in a significant transaction with the Government of Syria (including any entity owned by the Government of Syria), a foreign person that is a military contractor, mercenary or a paramilitary force knowingly operating in a military capacity inside Syria for or on behalf of the Government of Syria, the Government of the Russian Federation or the Government of Iran, or a foreign person subject to sanctions pursuant to the International Emergency Economic Powers Act with respect to Syria;
• knowingly sells or provides significant goods, services, technology, information or other support that significantly facilitates the maintenance of expansion of the Government of Syria’s domestic production of natural gas, petroleum or petroleum products;
• knowingly sells or provides aircraft or spare aircraft parts that are used for military purposes in Syria for or on behalf of the Government of Syria to any foreign person operating in an area directly or indirectly controlled by the Government of Syria or foreign forces associated with the Government of Syria;
• knowingly provides significant goods or services associated with the operation of aircraft that are used for military purposes in Syria for or on behalf of the Government of Syria to any foreign person operating in an area described above; or
• knowingly, directly or indirectly, provides significant construction or engineering services to the Government of Syria.

As described above, the Caesar Act targets key sectors of the Syrian economy that were believed to enable the Assad regime’s capacity to wage war against its own people, including the oil and gas industry, defense sector and construction, and implemented secondary sanctions, meaning that non-U.S. individuals or companies doing business with Syria could also face penalties.

As previously mentioned, the President is authorized to suspend, in whole or in part, the imposition of sanctions otherwise required under the Caesar Act for renewable periods not to exceed 180 days if the President determines that the following criteria have been met:

• the cessation of Syrian and Russian government airstrikes targeting civilians;
• the end of sieges that block humanitarian aid and restrict movement or medical care;
• the release of all political prisoners and access for international human rights organizations to prisons;
• a halt to deliberate attacks on civilian infrastructure by Syrian, Russian, Iranian or certain foreign forces;
• Syria’s compliance with international treaties on chemical, nuclear and biological weapons;
• the safe and voluntary return of displaced Syrians; and
• verifiable steps toward accountability and justice for war crimes, including participation in a credible truth and reconciliation process.

If the President determines these criteria are satisfied, a briefing to the relevant congressional committees must be provided within 30 days of such determination on the determination and the suspension of sanctions.

Similarly, if the President wishes to waive the application of sanctions under the Caesar Act with respect to a specific foreign person or with respect to a nongovernmental organization providing humanitarian assistance not already authorized under the Caesar Act, the President must also certify to the appropriate congressional committees that such a waiver is in the national security interest or that such a waiver is important to address a humanitarian need that is consistent with the national security interest of the U.S.

It is important to note that the original sunset clause in the Caesar Act provided that the law would expire five years after its enactment (i.e., December 2024) unless renewed by Congress. The National Defense Authorization Act for Fiscal Year 2025 (“NDAA 2025”), included a provision that renewed and extended the effectiveness of the Caesar Act’s sanctions until December 31, 2029.

Looking ahead, the path to full sanctions relief will likely be protracted and fraught with political negotiation, as Congress and the Trump administration weighs both the evolving situation on the ground in Syria and broader U.S. strategic interests in the region. As a result, clients should anticipate a phased approach to sanctions rollback, with incremental steps tied to verifiable progress by the Syrian government, ongoing engagement with Congress and continued scrutiny of Syria’s compliance with the conditions mandated by the Caesar Act and other statutory frameworks including the Iran Threat Reduction and Syria Human Rights Act of 2012 (“ITRSHRA”). ITRSHRA is a U.S. law designed to strengthen and expand sanctions against Iran, primarily to deter its pursuit of nuclear weapons and address human rights abuses in both Iran and Syria. For Syria in particular, the ITRSHRA requires imposition of sanctions (i) on Syrian government officials and others determined to be responsible for, or complicit in, serious human rights abuses against Syrian citizens, (ii) on persons who knowingly transfer, facilitate the transfer or provide services related to goods or technologies likely to be used by the Syrian government to commit human rights abuses, and (iii) on individuals or entities that engage in censorship or activities that prohibit, limit or penalize the legitimate exercise of freedom of expression by Syrian citizens.

Parties on the SDN List

It is not clear if the lifting of sanctions on Syria will have any impact on persons on the SDN List. Some or all those designations may remain in place even where the comprehensive sanctions on Syria as a country are lifted. This is especially the case with respect to entities and individuals on OFAC’s SDN List located in Syria that have been designated under sanctions programs other than the Syria sanctions program, including for example, under the Russia sanctions program or under the Counter Terrorism sanctions program. Note that under OFAC’s 50 Percent Rule, entities that are owned, directly or indirectly, 50 percent or more in the aggregate, by one or more SDNs, are themselves considered sanctioned, even if the entity is not specifically listed on the SDN List. Accordingly, organizations and individuals interested in doing business with Syria should continue to engage in proper due diligence.

Even in a scenario where certain sectoral or country-wide restrictions are eased, counterparties within Syria – particularly domestic financial institutions, state-owned enterprises and privately held companies that have operated for years under an insular regulatory environment – may lack the internal governance architecture, documentation practices and screening technologies typically required to comply with international anti-money laundering, counter-terrorist financing and economic sanctions regulations. U.S. persons contemplating transactions in, or involving funds or goods ultimately destined for, Syria must independently verify that potential Syrian counterparties maintain robust compliance frameworks. Absent such controls, U.S. persons face heightened risk of facilitating transactions involving blocked parties or engaging in conduct that could trigger penalties from OFAC.

Export Control Restrictions

Syria’s inclusion in Country Group E under the Export Administration Regulations (“EAR”) and as a Section 126.1 country under the International Traffic in Arms Regulations (“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.

Recent statements from the Trump administration on lifting “sanctions” on Syria presents a level of uncertainty as to whether the administration is referring to only economic sanctions such as asset freezes and prohibitions on financial transactions, or also extends to export controls that restrict the movement of goods and technology. The arms embargo, which is rooted in both U.S. law and international commitments, is particularly stringent and unlikely to be lifted in the near term. Even if some economic sanctions or EAR controls are eased, the transfer of defense articles and services to Syria would almost certainly remain prohibited. Furthermore, the process for amending or lifting export controls is complex and typically involves interagency review, public notice and often congressional notification or approval. As of now, there have been no official announcements or regulatory changes indicating a shift in U.S. export control policy toward Syria, and the future scope of any remaining controls remains uncertain.

European Union and United Kingdom: A Coordinated Easing of Sanctions on Syria

British and European authorities have also undertaken a gradual and conditional easing of their economic sanctions regimes against Syria.

On February 24, 2025, in order to support an inclusive political transition and economic recovery in Syria, the EU, amending Regulation (EU) No. 36/2012 of January 18, 2012, concerning restrictive measures in view of the situation in Syria, adopted Regulation (EU) 2025/407 and Implementing Regulation (EU) 2025/408. These regulations notably aim to:

• Remove a number of Syrian entities from the EU asset freeze list;
• Suspend a range of sectoral economic sanctions; and
• Partially lift financial restrictions.

On April 25, 2025, the UK enacted the Syria (Sanctions) (EU Exit) (Amendment) Regulations 2025, amending the UK’s economic sanctions framework against Syria established since 2019, i.e. the Syria (Sanctions) (EU Exit) Regulations 2019. Although the scope of easing differs slightly, both the EU and UK are aligned in their approach to facilitate Syria’s political transition, humanitarian recovery and economic reconstruction, while retaining some flexibility to reimpose sanctions if necessary.

Individual Sanctions

The EU has removed five Syrian entities from its asset freeze list under Regulation (EU) No. 36/2012, including the Central Bank of Syria, various Syrian banks and Syrian Arab Airlines.

The UK has removed 12 Syrian entities from its asset freeze list, including the Ministry of Interior, Ministry of Defense, General Intelligence Directorate, Army Supply Bureau and several media sector companies. Earlier, on March 6, 2025, the UK had already removed 24 Syrian entities, including the Central Bank of Syria, Syrian Petroleum Company and Syrian Arab Airlines.

However, certain individuals and entities remain on both the EU and UK asset freeze lists, notably those connected to the former Bashar al-Assad regime and/or sanctioned under human rights or terrorism-related regulations.

Sectoral Sanctions
 
Regarding trade restrictions imposed on Syria, the UK has followed the EU’s lead by lifting several export restrictions to Syria, including those on (i) goods related to electricity production, (ii) jet fuel and fuel additives, (iii) goods and technologies connected to crude oil and natural gas, and (iv) banknotes and coins sent to the Central Bank of Syria. Furthermore, the importation of crude oil or petroleum products from Syria is no longer subject to EU and UK economic sanctions.

Regarding restrictions on transport, aircrafts operated by Syrian Arab Airlines and Syrian aircraft used for cargo flights are now permitted to access EU and UK airports.

With respect to financial restrictions, the EU and UK have taken differing approaches to sanctions relief. The EU has adopted an exceptions-based approach, introducing specific exceptions to financial restrictions, i.e. prohibitions on the direct or indirect provision of financing and/or financial assistance. Financial restrictions no longer apply when transactions aim to:

• Provide humanitarian assistance in Syria;
• Rebuild, stabilize or restore economic activity or strengthen institutions in Syria;
• Import, purchase or transport crude oil or petroleum products from Syria to the EU;
• Participate in the construction or installation of new power plants for electricity production in Syria;
• Provide financing or investments to Syrian entities involved in exploring, producing or refining crude oil, and constructing or installing new power plants;
• Sell or transfer jet fuel or jet fuel additives to Syria;
• Enable Syrian carriers to access EU airports for cargo flights; and
• Export banknotes and coinage to the Central Bank of Syria.

Meanwhile, the UK has lifted all financial restrictions except those prohibiting the purchase or sale of bonds issued under the former Bashar al-Assad regime (i.e. prior to December 2024) and related services. Specifically, the following prohibitions have been lifted:

• The ban on banking operations in Syria, including transactions with Syrian banks;
• The prohibition on opening branches or subsidiaries of Syrian banks in the UK;
• The ban on Syrian financial institutions acquiring stakes in UK financial institutions;
• The prohibition on providing insurance or reinsurance services to the Syrian regime;
• The ban on investing in projects related to oil or electricity production in Syria; and
• The prohibition on buying or selling Syrian bonds – except those issued under the former Bashar al-Assad regime.

Humanitarian Aid Exemptions and Licenses

Regarding humanitarian exemptions from asset freeze measures – notably those relating to the delivery of humanitarian assistance and the provision of basic human needs to the Syrian population – the EU has indefinitely maintained the exemptions established under Regulation (EU) No. 36/2012. The UK has not amended its general license in force since February 12, 2025, i.e. OFSI General License INT/2025/5810196, which authorizes transactions necessary for carrying out humanitarian activities that would otherwise be prohibited under the UK’s Syria sanctions regime.

Sanctions Still in Force as of Today

The EU has retained a number of trade and financial restrictions. The following activities remain prohibited under the EU’s Syria sanctions regime:

• The supply to Syria of goods or technologies intended for internal repression;
• 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 provision of gold, precious metals or diamonds to the Syrian government;
• The export of luxury goods to Syria;
• The transfer of Syrian cultural property goods suspected of having been unlawfully removed from Syria;
• Any disbursement of funds or payments by the European Investment Bank in respect of loan agreements granted to Syria;
• The sale or purchase of Syrian bonds;
• The provision of insurance or reinsurance services to Syria or its government; and
• Except where permitted under the new derogations outlined above, the opening of bank accounts or branches in Syria or the authorization of Syrian banks to open accounts or branches within the EU.

The United Kingdom has retained several commercial restrictions, notably:

• The export to Syria of goods or technologies (i) related to chemical or biological weapons, (ii) intended for communications interception or monitoring, (iii) designed for internal repression, or (iv) classified as luxury goods;
• The import or acquisition from Syria of military goods, technologies or weapons;
• The provision to the Syrian government of (i) monitoring or interception services, and (ii) gold, precious metals or diamonds.

Preparing for the Reopening of the Syrian Market

The political situation in Syria is evolving rapidly, amid international discussions that suggest the beginning of a de-escalation in sanctions regimes. Clients should ensure that they are complying with all appliable U.S. sanctions on Syria while they remain in effect. Clients interested in doing business with Syria should work with counsel to understand all sanctions applicable to their transaction and develop a plan to seek a license or guidance from OFAC where necessary.

The EU and the UK now appear to be engaged in a readjustment of their sanctions regimes against Syria, with the aim of facilitating – under strictly controlled conditions – the country’s political and economic reconstruction. However, a complete lifting of sanctions remains premature at this stage. This transitional phase, characterized by the coexistence of remaining restrictions, targeted easing measures and conditional derogations, calls for heightened vigilance from economic operators seeking to re-engage in the Syrian market. Interested individuals and entities remain subject to stringent due diligence obligations.
 

Foley Hoag will continue to provide updates as the situation with Syria continues to develop.