06 January 2021

 

Full Report: Syria

Predictions

  • US sanctions on Assad family and central bank will exacerbate ongoing economic crisis but pose no threat to regime’s stability
  • Measures will fail to sever long-standing ties between Damascus and Tehran given extensive black market business relations
  • Opposition areas will see few economic repercussions, making related unrest unlikely, while any protests over living conditions in government-held areas will not escalate

 

Event

The US declared economic sanctions against the extended family of President Assad, several senior officials, and nine Syrian businesses on 22 December. The measures included freezing assets belonging to the president’s wife Asma Assad and four members of her family residing in the UK. Washington also added the Central Bank of Syria (CBoS) to its Specially Designated Nationals and Blocked Persons List. The UN special rapporteur for coercive economic measures Alena Douhan later said the sanctions would hamper the reconstruction of damaged infrastructure and therefore “violate the human rights of the Syrian people”. Meanwhile, the Syrian foreign ministry said the measures amounted to “crimes against humanity”.

Context

President Assad and several senior officials have been subject to US and EU sanctions since the Syrian conflict began in 2011. US President Trump has maintained earlier administrations’ approach of using unilateral sanctions to pressure the government, including via the Caesar Syria Civilian Protection Act signed into law in December 2019, which targets firms and individuals cooperating with Assad and his administration. Indeed, Washington sanctioned ten entities and four other associates of the president, including his son Hafez, under the act in July (see our 5 August report). According to the US Treasury, the new sanctions against Asma Assad, her family, and the CBoS, are the latest efforts to “promote accountability and reach a political resolution to the Syrian conflict”.

Partial Assad family tree highlighting targets of US and EU sanctions (Source: OFAC, EU)

Analysis

The treasury’s statement seeks to emphasise Washington’s desire to push the government towards UN-facilitated talks with opposition figures, in line with a UN resolution adopted in 2015. However, the sanctions also reflect the Trump administration’s goal of maximising economic and diplomatic pressure on Iran. Damascus is heavily reliant upon economic and military support from Tehran, and the US will be hoping to undermine Iran’s regional influence by hampering cooperation with one of its key trading partners. The measures come less than a month before president-elect Joe Biden’s inauguration date, reflecting the Trump administration’s desire to increase pressure substantially before Washington reconsiders its approach to Iran under Biden.

Indeed, the US’s statement cites the CBoS’s “deep banking ties to Iran”, and its special designation follows previous US sanctions against Iran-linked entities across the region in recent months (see our November Lebanon and Iran reports). Nevertheless, the timing of the measure against the bank, soon after a collapse of the Syrian pound last year, will have fuelled the UN’s human rights concerns given the bank’s role in regulating currency and overseeing public revenues (see our 24 June report).

Outlook

The US will not succeed in severing Damascus-Tehran ties, and the ruling family’s extensive business ties to both Russia and Iran will be largely unaffected by the sanctions, as much of the family’s wealth is derived from illicit smuggling. The latest moves will therefore have no impact on the Assad regime’s stability. However, fears that the sanctions will hamper Damascus’ ability to respond to the dual currency and public health crises are credible. The moves against the CBoS in particular risk further complicating humanitarian support efforts, while the US’s further deployment of the Caesar act will likely deter infrastructure repair work since the act explicitly mandates sanctions on entities engaging in reconstruction activities. The sanctions will therefore contribute to public anger over dire living conditions. The risk of related protests in opposition-held areas is low, as most such areas rely predominantly on trade with Turkey, which the sanctions will not affect. Small, isolated protests in Damascus and other government-held cities such as Latakia and Tartus are more likely, but these will not escalate and will largely be deterred by fears of a harsh security response.

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