Building on the Quick Take Alert K2 Integrity published on 15 May 2025, this alert outlines the recent developments regarding the easing of Syria sanctions. While the United States has not fully lifted its Syria sanctions, it has issued broad authorizations that allow for a range of activities in Syria as discussed further below.
Background
The U.S. government has taken the first steps to roll back U.S. sanctions targeting Syria as announced on 23 May 2025.[1] The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) and Financial Crimes Enforcement Network (FinCEN), as well as the State Department, each acted to allow restoration of economic relations with Syria by authorizing activities that effectively unwind U.S. comprehensive prohibitions against dealings with Syria as well as with named parties. The European Union (EU) also took further steps to remove most of its sanctions against Syria. Notably, Syria continues to be subject to residual restrictions and sanctions, described below, which complicate policy and business decision making. Firms that consider new business with Syria must appreciate the complexity of the changes related to sanctions and should avoid engaging in activities that have yet to be authorized and understand that indirect sanctions risk remains even with the authorizations.
Scope of the New OFAC General License
On 23 May 2025, OFAC issued General License (GL) 25[2] authorizing two categories of activities.
First, it authorizes U.S. persons to engage in transactions prohibited by the Syrian Sanctions Regulations, 31 CFR part 542, with the exception of transactions involving blocked persons. This includes the following:
- The provision of services to individuals and companies in Syria;
- New investment in Syria;
- The import of or dealing in petroleum and petroleum products from Syria; and
- Transactions with the new Government of Syria, defined to mean the government in existence on or after 13 May 2025.
Second, GL 25 authorizes U.S. persons to engage in transactions with 28 named blocked persons included in the Annex to the GL (or with entities owned 50% or more by those named blocked persons) that were sanctioned pursuant to the Weapons of Mass Destruction Proliferators Sanctions Regulations, 31 CFR part 544; the Iranian Financial Sanctions Regulations, 31 CFR part 561; the Global Terrorism Sanctions Regulations, 31 CFR part 594; the Foreign Terrorist Organizations Sanctions Regulations, 31 CFR part 597; or Executive Order 13574. Notable parties in the Annex include, but are not limited to, the following:
- Central Bank of Syria;
- Commercial Bank of Syria;
- Abu Muhammad Al-Jawlani, the former alias for Syrian President Ahmad Al-Sharaa; and
- Syrian Petroleum Company.
While GL 25 authorizes transactions with blocked persons listed in the Annex to the GL (or entities owned 50% or more by those blocked persons), it does not authorize the unblocking of frozen assets. In other words, U.S. persons that hold frozen assets belonging to the persons listed in the Annex to GL 25 must continue to keep those assets blocked; however, they may now engage in new transactions as of the date of the license.
It is important to note that transactions with blocked persons other than those listed in the Annex to the GL remain prohibited.[3] Furthermore, GL 25 explicitly states that it does not authorize dealings with the Russia Federation, the Islamic Republic of Iran, or the Democratic Republic of North Korea.
On 28 May, OFAC published a Fact Sheet that provided additional clarification on the scope of GL 25 and Syrian sanctions relief.[4]
Concurrent USG Sanctions Relief
Concurrently, the U.S. government took additional steps to provide sanctions relief under the OFAC GL. Specifically the following:
- Secondary Sanctions Waiver. The State Department issued a waiver[5] to the Caesar Act so that non-U.S. persons can now engage in activities and facilitate transactions that are authorized for U.S. persons by GL 25 in Syria without fear of secondary sanctions. Enacted in 2020, the Caesar Act required secondary sanctions against parties who facilitated activity with the Assad regime, therefore prohibiting non-U.S. persons from dealings with Syria. Note that the waiver is set to expire after 180 days or on 19 November 2025.
- Maintaining Correspondent Relationships with the Commercial Bank of Syria. FinCEN issued exceptive relief authorizing U.S. banks to open and maintain correspondent bank relationships with the Commercial Bank of Syria.[6] FinCEN had previously identified the Commercial Bank of Syria as a financial institution of primary money laundering concern under section 311 of USA PATRIOT Act and prohibited U.S. banks from maintaining correspondent relationships with it.[7] In parallel, on 4 June 2025, FinCEN also rescinded 2011 guidance on the application of section 311 measures with respect to the Commercial Bank of Syria.
- Rescinding Advisories on Syria-Related Risks. FinCEN also rescinded two prior advisories and guidance documents related to Syria on 4 June. These advisories, issued in 2011 and 2013, respectively, had warned U.S. financial institutions about the risk of transactions involving persons specifically designated for sanctions relating to Syria, as well as proxies acting on behalf of such persons.[8]
EU Broad Sanctions Relief
In parallel, on 27 May 2025, the European Council adopted decisions to lift all economic restrictive measures on Syria, with a few exceptions to include the following:[9]
- Council Implementing Decision 2025/1095 removed asset freeze sanctions against 22 entities, including three banks, and 12 petrochemical companies.[10]
- Council Decision 2025/1096 (i) removed asset freeze sanctions against the Central Bank of Syria and the Commercial Bank of Syria and (ii) removed most of the restrictive measures against Syria except for some restrictions on military items, dual-use items, and items used for internal repression or surveillance.[11]
The EU Council, however, appears to be monitoring the situation on the ground closely and is tailoring sanctions actions towards restoring stability in the region. For example, concurrent with its sanctions relief, the EU Council adopted a decision that designated two individuals and three entities pursuant to the EU global human rights sanctions regime due to their role in recent violence in Syria’s coastal region.[12]
As discussed in K2 Integrity’s recent Quick Take, the United Kingdom has also started removing sanctions against Syria by introducing the Syria (Sanctions) (EU Exit) (Amendment) Regulations 2025 on 23 April 2025.
Key Takeaways
With recent political developments in Syria, the effort by the U.S. government to encourage engagement in Syria has increased, and industry and other governments are likewise responding. On 29 May, Syria signed an energy deal valued at USD 7 billion with a consortium of U.S., Turkish, and Qatari companies.[13] Recent developments are trending toward a more open investment and commercial environment, though risks remain.
While firms may be encouraged by the recent sanctions relief to start engaging in transactions and investments involving Syria, they should be aware of the continuing diplomatic and regulatory complexities involved in Syria, described below.
- Residual Risks and Restrictions. Those engaging in business in Syria should be mindful of the remaining risks and restrictions left in place by various sanctions or sanctions-adjacent authorities. This includes (i) limitations to GL 25 as explained in the “Scope of the New OFAC General License” section of this alert; (ii) restrictions related to individuals and entities that are still designated due to their ties to the Assad regime or under other sanctions programs by the United States, the United Kingdom, or the EU; (iii) export restrictions on Syria imposed by various countries including the United States, the United Kingdom, or the EU; (iv) the UNSC-mandated sanctions against Hay’at Tahrir al-Sham (HTS) and certain individuals that are not part of the new Syrian government to the extent different member states have not authorized engaging with them; (v) the risk associated with the continued Foreign Terrorist Organization (FTO) designation of HTS, which could result in civil and criminal liability should individuals or business knowingly provide “material support” to HTS; and (vi) the risk associated with Syria’s continued status as a state sponsor of terrorism, which requires the withdrawal of a range of U.S. benefits.
- FATF Grey List. As of the date of this publication, Syria appears on the Financial Action Task Force’s (FATF) so-called Grey List, which identifies jurisdictions with strategic deficiencies in their regimes to counter money laundering, terrorist financing, and proliferation financing.[14] Financial institutions should take particular care when dealing with such jurisdictions given the heighted risk associated with anti-money laundering and financial crime.
- AML/CFT and Sanctions Compliance Controls. Financial institutions should review any geographic risk-rating methodologies that relate to Syria to determine what changes, if any, should be made to account for the new developments. Financial institutions or other firms that are looking to enter Syria should ensure that their transaction monitoring processes and sanctions screening capabilities can identify and interdict activity that may be indicative of terrorist financing, sanctioned parties, and other threat finance risks remaining in Syria. Businesses should anticipate their exit plans and consider contractual clauses that would protect their interests or minimize their losses if the sanctions in Syria are completely or partially restored.
- Evolving Foreign Policy and Regulatory Environment. Those engaging in business in Syria should plan for an evolving policy and sanctions environment as a part of any business decision to enter Syria. Sanctions can change quickly as a result of U.S. government diplomatic, policy, and security considerations. As stated in the Treasury press release: “The U.S. will continue monitoring Syria’s progress and developments on the ground.”[15] As seen in Sudan, Burma/Myanmar, and Iran, it is possible that the political situation may worsen and sanctions will be reimposed. In particular, non-U.S. businesses should continue to assess the likelihood of the continuation of the Caesar Act waiver, which expires on 19 November 2025.
[1] For background on the state of Syria sanctions prior to the issuance of GL 25, please see K2 Integrity’s “Quick Take: United States to Lift Sanctions Against Syria,” published on 15 May 2025. https://www.k2integrity.com/en/knowledge/policy-alerts/quick-take-united-states-to-lift-sanctions-against-syria/.
[2] OFAC General License 25, “Authorizing Transactions Prohibited by the Syrian Sanctions Regulations or Involving Certain Blocked Persons.” 23 May 2025. https://ofac.treasury.gov/media/934306/download?inline.
[3] OFAC, “Frequently Asked Questions for Syria General License 25.” 28 May 2025. https://ofac.treasury.gov/media/934311/download?inline.
[4] OFAC, “Frequently Asked Questions for Syria General License 25.” 28 May 2025. https://ofac.treasury.gov/media/934311/download?inline.
[5] U.S. Department of State, “Caesar Act Waiver Certification.” 23 May 2025. https://www.state.gov/caesar-act-waiver-certification/.
[6] FinCEN, “Exception to Prohibition Imposed by Section 311 of the USA PATRIOT Act against the Commercial Bank of Syria.” 23 May 2025. https://www.fincen.gov/sites/default/files/shared/Commercial-Bank-of-Syria-Exceptive-Relief.pdf.
[7] 31 CFR 1010.653. https://www.ecfr.gov/current/title-31/subtitle-B/chapter-X/part-1010/subpart-F/subject-group-ECFRe5988d602e86fcf/section-1010.653.
[8] FinCEN rescinded the following: Updated Advisory to Financial Institutions on Recent Events in Syria (15 April 2013); Guidance to Financial Institutions on the Commercial Bank of Syria (10 August 2011); and Guidance to Financial Institutions on Recent Events in Syria (08 July 2011). Financial Crimes Enforcement Network Advisories. Accessed 4 June 2025. https://www.fincen.gov/resources/advisoriesbulletinsfact-sheets/advisories.
[9] Council of the EU. “Syria: EU Adopts Legal Acts to Lift Economic Sanctions on Syria, Enacting Recent Political Agreement.” 28 May 2025. https://www.consilium.europa.eu/en/press/press-releases/2025/05/28/syria-eu-adopts-legal-acts-to-lift-economic-sanctions-on-syria-enacting-recent-political-agreement/.
[10] Council Implementing Decision (CFSP) 2025/1095 of 27 May 2025 implementing Decision 2013/255/CFSP concerning restrictive measures in view of the situation in Syria, https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=OJ:L_202501095.
[11] Council Decision (CFSP) 2025/1096 of 27 May 2025 amending Decision 2013/255/CFSP concerning restrictive measures in view of the situation in Syria, https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=OJ:L_202501096.
[12] Council Decision (CFSP) 2025/1110 of 28 May 2025 amending Decision (CFSP) 2020/1999 concerning restrictive measures against serious human rights violations and abuses, https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=OJ:L_202501110.
[13] France24. “In Damascus, US Envoy Inks $7 Billion Energy Deal, Calls for Israel-Syria Peace Pact.” 29 May 2025. https://www.france24.com/en/middle-east/20250529-damascus-us-envoy-inks-7-billion-energy-deal-calls-israel-syria-peace-pact.
[14] Financial Action Task Force. “‘Black and Grey’ Lists.” As of 21 February 2025. https://www.fatf-gafi.org/en/countries/black-and-grey-lists.html.
[15] U.S. Department of the Treasury, “Treasury Issues Immediate Sanctions Relief for Syria.” 23 May 2025. https://home.treasury.gov/news/press-releases/sb0148.