Key Takeaways:
- OFAC issues general license authorizing most – but not all – transactions with Syria
- Secondary sanctions against non-U.S. persons who engage in such transactions waived
- Foreign financial institutions authorized to open correspondent accounts for the Commercial Bank of Syria
- Exports controls remain in effect for transactions with respect to Syria
On May 23, 2025, the United States formally eased its economic sanctions on Syria. This action authorizes a significant number of transactions that previously would have violated U.S. sanctions. However, as described below, the U.S. government did not fully "lift" U.S. sanctions on Syria, nor did it remove controls applicable to exports to Syria, so diligence and compliance are still required.
How Were Syria Sanctions Eased?
The U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) eased its Syria sanctions by issuing General License No. 25 (GL 25). This general license authorizes all transactions prohibited by the Syrian Sanctions Regulations (SySR), except for transactions involving certain blocked persons. The SySR prohibit, among other things, U.S. persons from engaging in:
- Certain new investment in Syria;
- Exportation, reexportation, sale, or supply of certain services to Syria; and
- Transactions relating to Syrian-origin petroleum or petroleum products.
As of May 23, GL 25 authorizes such transactions if no blocked person is involved or if only the following blocked persons are involved (Approved Syrians):
- The government of Syria, as defined in the SySR and in existence as of May 13, 2025, which specifically includes Syrian President Ahmed al-Sharaa and his government;
- Any of the blocked persons listed in the GL 25 Annex identifying 28 entities in Syria, including a Syrian airline, energy companies, financial institutions, shipping companies, tourism companies, government ministries, and more
- Any entity owned 50 percent or more (directly or indirectly, individually or in the aggregate) by one or more of the 28 blocked persons listed in the GL 25 Annex.
GL 25 also authorizes transactions with Approved Syrians even if the transaction is otherwise prohibited by the Weapons of Mass Destruction Proliferators Sanctions Regulations, the Iranian Financial Sanctions Regulations, the Global Terrorism Sanctions Regulations, the Foreign Terrorist Organizations Sanctions Regulations, or Executive Order 13574 (relating to sanctions on Iran).
What GL 25 Does Not Do
GL 25 does not authorize:
- Any transaction prohibited by the SySR involving a blocked person that is not an Approved Syrian;
- The unblocking of any property or property interests that were blocked as of May 22, 2025;
- Any transactions for or on behalf of the Governments of Russia, Iran, or North Korea, or related to the transfer or provision of goods, technology, software, funds, financing, or services to or from those countries; or
- Transactions that would violate other U.S. laws and regulations, such as the current export license requirements pertaining to Syria in the Export Administration Regulations ("EAR")1 and the International Traffic in Arms Regulations ("ITAR").
Summary of GL 25
While GL 25 certainly eases sanctions on Syria, it does not fully "lift" those sanctions. For instance, while GL 25 authorizes many transactions that are prohibited by the SySR, the SySR are still in place, property blocked pursuant to the regulations as of May 22, must remain blocked, transactions with any blocked person who is not an Approved Syrian are still prohibited, and stringent export license requirements specific to Syria under the EAR and the ITAR continue to apply. On May 28, OFAC published FAQs on GL 25. The FAQs confirm, among other things, that the United States will continue to enforce the SySR against "Assad and his enablers, serious human rights abusers, Captagon drug traffickers, and persons involved in terrorist and proliferation activity." Importantly, transactions conducted under the auspices of GL 25, like transactions conducted under any other general license, must be recorded as such, and records must be kept for at least 10 years.
GL 25 may be revoked if Syria does not become "stable, unified, and at peace" – in addition, GL 25 was issued on the "understanding that Syria will not offer a safe haven for terrorist organizations and will ensure the security of its religious and ethnic minorities." As a result, continued monitoring of the situation on the ground in Syria and diligence and proactive compliance regarding transactions with Syria are required.
How Secondary Sanctions and Correspondent Accounts Are Impacted
As for secondary sanctions, GL 25 was issued simultaneously with the Secretary of State's 180-day waiver certification under the Caesar Syria Civilian Protection Act of 2019 (the Act), which waived the application of sanctions under the Act with respect to foreign persons who engage in transactions permitted by GL 25 (the Waiver). The Waiver was issued "to ensure sanctions do not impede the ability of [U.S.] partners to make stability driving investments, and advance Syria's reconstructive efforts . . . [and] facilitate the provision of electricity, energy, water and sanitation, and enable a more effective humanitarian response across Syria."
Also, the Financial Crimes Enforcement Network (FinCEN) took steps to permit U.S. financial institutions, under certain conditions, to maintain correspondent accounts for the Commercial Bank of Syria.
Footnote
1. See also, Bureau of Industry and Security, Syria Export Controls, https://www.bis.gov/licensing/country-guidance/syria-export-controls (last accessed May 28, 2025).
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.
