Even before the sanctions kicked in, they had already contributed to the collapse of Syria’s long-troubled economy.
Who is subject to the new sanctions?
The Caesar Syria Civilian Protection Act of 2019 imposes sanctions on anyone who provides significant support to or engages in transactions with the government of Syria or any entity it controls or owns.
The act also focuses on three sectors — the Syrian military, the domestic petroleum and gas industry, and reconstruction in government-held areas — and imposes sanctions on anyone who provides support to or maintenance for them. In the military sector, for instance, the sanctions target anyone who sells or provides aircraft to the Syrian military or helps operate the equipment.
The sanctions apply to Syrians and non-Syrians alike. In the context of Syria’s war, this means in particular that Russians and Iranians allied with Assad could be the focus.
The Caesar Act also calls on the U.S. Treasury to determine whether the Central Bank of Syria is “a financial institution of primary money laundering concern” and requires that new sanctions be imposed on a long list of individuals allegedly complicit in human rights abuses.
U.S. Secretary of State Mike Pompeo announced Wednesday that Assad and his wife Asma will be placed under sanctions. This is the first time Asma al-Assad is being sanctioned by the United States. Also named are Maher al-Assad, the president’s brother and head of the infamous Fourth Division of the Syrian Arab Army; Bushra al-Assad, the president’s sister who resides abroad; other members of the Assad family; and the prominent Hamsho family, which has close ties to the government.
“Anyone doing business with the Assad regime, no matter where in the world they are, is potentially exposed to travel restrictions and financial sanctions,” Pompeo said.
What exactly are the sanctions trying to achieve?
The Caesar Act says it aims to place political and economic pressure on the Syrian government to “compel the government of Bashar al-Assad to halt its murderous attacks on the Syrian people and to support a transition to a government in Syria that respects the rule of law, human rights, and peaceful coexistence with its neighbors.”
Sanctions would be suspended if the government halted its attacks on civilians; stopped cutting off besieged areas from international aid and medical and humanitarian assistance; released all political prisoners; facilitated the safe return of the displaced; and held accountable all war criminals.
The act is named after a Syrian military police defector with the pseudonym “Caesar” who smuggled out 55,000 photos of detainees tortured to death in Syrian prisons and hospitals. Nearly 30,000 people were killed in prisons between 2011 and 2017, Amnesty International estimated. Hundreds of thousands have been killed as a result of the war.
How are these sanctions different from prior ones?
Syria is already under sanctions by both the United States and the European Union. These measures banned transactions with Syrian state entities as well as with hundreds of companies and individuals.
The United States has also banned Americans from exporting to Syria or investing there, and barred oil and gas transactions with Syria.
Has the Caesar Act already squeezed Syria?
These sanctions reverberated across Syria even before they took effect. As individuals and entities made adjustments to avoid the sanctions, the Syrian pound took a drastic hit, reaching a record low on June 8 and trading at more than 3,000 pounds to the dollar. That represents less than a fifth of the currency’s value this time last year.
But the sanctions may not be the main reason the currency has fallen so steeply, at least so far.
The economic crisis in neighboring Lebanon has had a severe impact on the Syrian economy. The two economies are intertwined, and the severe shortage of dollars in Lebanon and the capital controls on Lebanese banks have cut off a major lifeline of finance for Syrian business executives.
These financial troubles come on top of years of prior sanctions, war, massive displacement and exodus of Syrians, and infighting within the government ranks — which have combined to wreak havoc on the economy and the currency.
Syrian state media has blamed Caesar sanctions for the recent fall of the currency, which has hit Syrians very hard. The U.S. government blames Assad for the country’s economic distress.
“Bashar al-Assad and his regime are directly responsible for Syria’s economic meltdown,” said a State Department official who spoke on the condition of anonymity to discuss a sensitive topic. “They squander tens of millions of dollars each month to fund a needless, brutal war instead of providing for the basic needs of the Syrian people. The regime’s destructive war has crushed the Syrian economy, not U.S. sanctions.”
How will the sanctions affect Syria now that they’ve kicked in?
The impact will become clearer as months go by and contracts are potentially canceled to avoid sanctions.
For Syrians, sanctions on reconstruction and on oil and gas are likely to be felt most acutely.
Large parts of the country have been ravaged by war, and about a third of the homes have been damaged or destroyed, leaving half the population displaced. Aleppo, Syria’s largest city before 2011, needs about six years of continuous work just to clear the debris, the World Bank estimated in 2017. Homs, a city that saw whole neighborhoods leveled, needs 2½ years to clear debris.
In the meantime, the affordability and availability of oil and gas are on Syrians’ minds every day. The government had previously introduced a system of smart cards for distributing and rationing subsidized staple goods, including fuel. But the supply of oil and gas has continued to fall short of people’s needs.
The Caesar Act will probably limit the government’s ability to procure oil, further hurting the already low quality of life.
On Wednesday, after the dramatic depreciation of the currency on the black market, the Syrian Central Bank announced it had officially devalued the Syrian pound for imports and transfers from abroad, to 1,256 and 1,250 to the dollar, respectively. The central bank said this action came in light of the “circumstances that the national economy is going through as a result of the tightening of unilateral coercive economic measures on the Syrian people by the so-called ‘Caesar Law’, as well as the continuation of the economic crisis in Lebanon which has led to a higher demand on the foreign currency in the Syrian market.”