Regional backers (Qatar, Saudi Arabia, and Turkey) moved quickly to lobby for sanctions relief, portraying the new Syrian authorities as pragmatic partners. Washington, however, adopted a more transactional approach. Rather than offering relief as a reward for regime change, the United States sought to make Damascus “earn” normalization.
Initially, the U.S. relied on temporary general licenses allowing limited financial and humanitarian operations. These proved insufficient to attract serious investment. Aid and capital largely stayed away, constrained by legal uncertainty and what compliance officers call “overcompliance” – the tendency of banks and corporations to avoid even permissible transactions for fear of penalties.
Instead, Washington – not without Israeli input – used exemptions as leverage. Sanctions relief was tied to concrete demands: excluding foreign fighters from government posts, dismantling chemical weapons stockpiles, locating missing American journalist Austin Tice, and demonstrating control over extremist remnants. These were long-term tasks, deliberately designed to keep pressure on Damascus while testing its reliability.
For President Donald Trump, however, sanctions policy also served another purpose: managing alliances. On May 13, during a visit to Saudi Arabia, Trump announced the easing of restrictions on Syria. At the same time, the White House revealed Saudi plans to invest $600 billion in the U.S. economy. On June 30, Trump signed an executive order enabling sanctions relief, effective July 1, while preserving the option to reimpose measures. Syrian financial institutions, including the Central Bank, were removed from OFAC blacklists.
Yet even then, Syria remained largely isolated. UN sanctions and the Caesar Act were still in force, and international investors remained wary. Lifting UN sanctions required unanimity in the Security Council; repealing Caesar required overcoming resistance not only in Congress but also from Israel, which viewed Syrian normalization with deep suspicion.
Israel emerged as a central actor in the sanctions equation. Having effectively abandoned the 1974 disengagement agreement, Israel deployed forces into areas near the Golan Heights. While occupying southern Syrian localities, Israeli leaders watched the new Damascus government carefully.
Al-Sharaa declared that Syria would not fight Israel – a statement born as much of necessity as strategy. In the chaotic days following Assad’s fall, Israel launched extensive airstrikes, destroying much of the former Syrian Arab Army’s infrastructure, including naval assets and air defenses, to prevent weapons from falling into new hands.
Meanwhile, domestic missteps by Damascus weakened its position. Violence against Druze communities in 2025 led to their partial autonomization and increased coordination with Israel. At the same time, U.S.-mediated contacts between Syria and Israel continued. Washington floated the idea of Syria joining the Abraham Accords, while Damascus hesitated, constrained by its social base’s deeply entrenched anti-Israeli sentiment. Al-Sharaa spoke publicly of returning to positions held before December 8, 2025, hinting at a possible territorial bargain.
Despite these tensions, Syria’s regional allies proved adept at lobbying. Gradually, the diplomatic logjam loosened.
On November 6, 2025, the UN Security Council adopted a resolution removing sanctions on transitional president Ahmad al-Sharaa and Interior Minister Anas Khattab, previously targeted under measures against ISIS and Al-Qaeda affiliates. The decision followed months of Syrian diplomacy. While Western members were relatively easy to convince, Russia and China required additional assurances. A key moment came on October 15, when al-Sharaa met the Russian president in Moscow and proposed a “reset” of bilateral relations. Russia voted in favor; China abstained.
Even more consequential was the repeal of the Caesar Act. In November, al-Sharaa visited the United States, meeting Trump and leaders of both parties in Congress. Lobbying intensified. On December 18, Trump signed the final repeal after both chambers approved it as part of the National Defense Authorization Act for Fiscal Year 2026.
The repeal came with conditions. For four years, the president must report to Congress every six months on Syria’s progress in security and governance: combating ISIS, removing foreign fighters from leadership, protecting minority rights, implementing agreements with the Syrian Democratic Forces, and refraining from military action against neighbors – especially Israel. The president retains authority to impose targeted sanctions if Syria backslides.
Sanctions relief, in other words, was not merely about regime change, but about behavioral alignment with U.S. interests.
The World Bank estimates Syria’s reconstruction costs at $216 billion. Central Bank governor Abdelkader Husrieh argues that repealing Caesar will allow Syria to reintegrate into the global financial system and seek a sovereign credit rating. In theory, this opens doors. In practice, obstacles abound.
The Syrian case echoes Iraq in the 1990s and early 2000s, when comprehensive sanctions were used to weaken a regime, fracture elites, and erode social support. In both cases, sanctions succeeded in destroying state capacity, but not in building viable alternatives.
By December 2025, Syria had shed most formal sanctions. Saudi Arabia, Qatar, and Turkey played decisive roles. Investment is likely to increase, but modestly. The past year already demonstrated the limits of external engagement. Even when exemptions existed, few were willing to commit significant resources to a country marked by instability, sectarian violence, clan-based governance, and territorial fragmentation.
The fog of war has not lifted. Sanctions are gone, but uncertainty remains. Whether Syria’s new elite can transform relief into recovery – or merely entrench a new version of the old order – is the question that will define the next decade.
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