Introduction: A Syria Sanctions Sea Change
The FY 2026 National Defense Authorization Act, enacted on Dec. 18, takes a significant step towards the full removal of sanctions on Syria by repealing the Caesar Syria Civilian Protection Act of 2019 (Caesar Act), which provided for mandatory sanctions on those providing certain support to Syria and its government. This marks the latest in a remarkable series of developments following Assad’s sudden downfall and exile to Russia in December 2024. The transitional Syrian government formed after Assad’s ouster has worked to project stability and attract international development and investment funding, reversing years of isolation and the Assad regime’s reliance on Russia for survival. As Syria emerges from sanctions seclusion, numerous challenges remain to outside investment and development in Syria, which the World Bank estimates will cost $216 billion to reconstruct.
Led by transitional President Ahmed al-Sharaa, the new Syrian government has pursued a path towards building international legitimacy and demonstrated its willingness to reconsider Syria’s relationships with regional and global powers to fund its development. This shift was evident on November 10, 2025, when al-Sharaa joined President Trump in the White House for the first-ever meeting hosting a Syrian head of State. This followed an initial meeting with al-Sharaa in Saudi Arabia on May 14, the day after Trump announced he would order the lifting of sanctions on Syria.
The repeal of the Caesar Act presents a key moment to review the U.S. government’s progress towards the goal reflected in Trump’s May 13 announcement and June 30 Executive Order of removing sanctions and other restrictions on Syria to support the new government and efforts to promote a stable, unified, and peaceful Syria. Key issues such as accountability, institutional reforms, and a successful democratic transition are closely interlinked with Syria’s ability to engage in effective reconstruction and economic recovery, and sanctions – or their removal – have the potential to significantly impact Syria’s ability to garner the support necessary for those processes. In this article, we take stock of where things stand along the path of Syria sanctions removal and what restrictions remain to inhibit burgeoning investment and development in post-Assad Syria.
Assad’s Ouster Leads to Reexamination and Removal of Sanctions
U.S. sanctions on Syria started with export controls and foreign assistance restrictions derived from Syria’s designation in 1979 as a State Sponsor of Terrorism (SST) and grew over decades to include an amalgamation of export controls, economic sanctions and terror list designations, and assistance restrictions. They variously aimed to pressure Assad’s regime to either reverse course and end its interference in Lebanon, terrorist support, and human rights abuses or hasten the transition to a new Syrian government. Over 13 years after President Obama sanctioned the government of Syria and called for Bashar al-Assad to step aside, Syrian rebel groups including Hayat Tahrir al-Sham (HTS) ended the Assad family’s 50+-year reign in a matter of roughly 11 days. Following this quick change in government, U.S. policymakers were left with the question of whether and how to dismantle the entrenched Syria sanctions apparatus, which broadly impacted the country and its government, without regard to who held power.
Since becoming transitional president shortly after leading the overthrow of Assad, al-Sharaa has sought to quickly move beyond his militant past and attempted to establish himself as a moderate leader committed to preventing corruption and holding accountable human rights abusers, protecting minorities, and ensuring a stable and secure Syrian government Significant questions and challenges surrounding al-Sharaa’s goals for his new government remain unresolved as Syria charts its course for the future. Outbreaks of government-affiliated sectarian violence raise concerns about al-Sharaa’s ability to ensure the safety of all Syrians. On the economic front, he has pressed the United States to permanently end its sanctions on Syria, including removing Syria as a State Sponsor of Terror and specific appeals for a permanent repeal of the Caesar Act, to further settle the nerves of potential investors and provide more clarity and stability for Syria.
While barriers to trade remain, repealing the Caesar Act is the latest in a number of significant sanctions relief actions that suggest al-Sharaa’s strategy is working. Since announcing he would roll back Syria sanctions on May 13, Trump has continued to voice his support for Syria and his desire to “give them a chance at greatness.” As detailed below, the U.S. government has already removed many sanctions measures to implement the May 13 announcement, while retaining sanctions on Assad and his supporters and other bad actors related to Syria.
Post-May 13 Syria Sanctions Relief
Step 1: Temporary Sanctions Relief
On May 23, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) and the State Department took the first significant steps towards sanctions relief by issuing OFAC General License 25 and a 180-day waiver of sanctions under the Caesar Act. These actions broadly authorized transactions with the new transitional Syrian government, al-Sharaa (under his nom de guerre, Abu Muhammad Al-Jawlani) and transitional Interior Minister Khattab, and certain sanctioned entities. The Caesar Act waiver also temporarily removed the risk of sanctions designation under the Act. Absent a waiver or suspension, the Caesar Act provided for mandatory secondary sanctions on non-U.S. persons that engage in various significant transactions involving Syria, such as support to the Syrian government, Syria’s petroleum industry, or engineering services to the Syrian government.
Before its repeal, two distinct methods allowed the U.S. Secretary of State to temporarily halt application of the Caesar Act: a waiver under Section 7432 of the Act, or suspension via Section 7431 of the Act. Waiving sanctions under the Act required the Secretary to certify that such a waiver was in the national security interests of the United States. Suspension, however, required a more fact-based certification that seven enumerated conditions had been met, including with respect to the government of Syria’s actions related to destruction of chemical and biological weapons, the return of displaced Syrians, and accountability for the Assad regime. The statute limited both waiver and suspension to 180 days, renewable.
Step 2: Executive Order Roadmap
On June 30, President Trump issued Executive Order 14312, “Providing for the Revocation of Syria Sanctions.” This order laid out the following steps towards sanctions relief and reframing:
• Permanently Removing Syria Sanctions: The Executive Order terminated the national emergency with respect to Syria and revoked previous Executive Orders establishing the Syrian sanctions regime (EOs 13338, 13399, 13460, 13572, 13573 and 13582). This led to the removal of 518 individuals and entities associated with Syria from OFAC’s List of Specially Designated Nationals and Blocked Persons (SDN List).
• Expanding Assad-related Sanctions: It further amended EO 13894 to expand sanctions authorities to “ensure meaningful accountability” for former Assad officials and their supporters, providing sanctions authorities to designate, e.g., those who threaten Syrian peace, security and stability, commit human rights abuses, trade illicitly in captagon, or are responsible for missing persons in Syria during the Assad era. OFAC designated 139 persons under these expanded authorities, as well as other relevant authorities, in conjunction with the Executive Order.
• Providing for Export Control and Assistance Relief: The Executive Order also waived statutory provisions under section 5(b) of the Syria Accountability and Lebanese Sovereignty Restoration Act of 2003 (Syria Accountability Act) and section 307(d)(1)(B) of the Chemical and Biological Weapons Control and Warfare Elimination Act of 1991 (CBW Act) that had underpinned prohibitions on virtually all exports to Syria, restricted U.S. foreign assistance, denied U.S. government credit, credit guarantees, or other financial assistance, and restricted U.S. banks from making loans or providing credit to the Syrian government.
• Secondary Sanctions Relief: The Executive Order also directed the U.S. Secretary of State to evaluate whether the criteria in the Caesar Act had been met to justify suspension of the Act’s mandatory sanctions.
• Counterterrorism Review and UN Engagement: Last, the Executive Order required the U.S. Secretary of State to take “all appropriate action” related to the terror designations applied to the new Syrian government and its members – including HTS’s designation as a Foreign Terrorist Organization, Syria’s inclusion on the SST list, and al-Sharaa’s designation as a Specially Designated Global Terrorist (SDGT). It also directed the U.S. Secretary of State to support a stable Syria at the U.N. and “explore” U.N. sanctions relief to Syria.
Evaluating the EO’s Effect – What Remains to Deliver on President Trump’s Promise?
Following issuance of the roadmap for sanctions removal in EO 14312, the U.S. Departments of State, the Treasury, and Commerce have continued along the path to remove sanctions on Syria. Additional steps, however, remain before the U.S. sanctions and export control apparatus applicable to Syria is fully dismantled. Below, we review actions taken in furtherance of the measures described in EO 14312 and remaining steps along the path to fully removing sanctions and restrictive export controls from Syria.
Sanctions Regulatory Changes: On August 26, OFAC removed the Syrian Sanctions Regulations from the Code of Federal Regulations. On September 25, OFAC also renamed the “Syria Related Sanctions Regulations” as the “Promoting Accountability for Assad and Regional Stabilization Sanctions Regulations” to reflect the expanded scope of the underlying national emergency. The removal of all Syria-focused sanctions regulations has the effect of underscoring that U.S. sanctions do not target Syria but rather target destabilizing actors in the region.
Initial Export Control Relief: On September 2, empowered by EO 14312’s waivers of the Syria Accountability Act and CBW Act, the Commerce Department’s Bureau of Industry and Security (BIS) published a final rule to allow greater trade with Syria, while maintaining restrictions relevant to malign or destabilizing actors.
This rule added a Syria-specific license exception, License Exception Syria Peace and Prosperity (SPP), which authorizes the export of “EAR99” items to Syria. EAR99 refers to low-technology consumer goods items that are not identified on the Commerce Control List and are therefore subject to the lowest level of U.S. export controls. It also expanded several other license exceptions to allow for specified exports to Syria without requiring an export license. These expanded exceptions apply to certain consumer communications devices; aircraft, vessels, and spacecraft; temporary imports, exports, and transfers; servicing and replacing parts and equipment; exports related to the U.S. government and its allies; technology and software; and baggage. Additionally, BIS now applies a presumption of approval for license applications to Syria that support economic and business development. These license exceptions represent an incremental step towards allowing exports for daily living, international travel, and global business operations to Syria, removing some of the export control impediments that stymied the early response to the Syrian earthquake in 2023.
Of note, however, Syria remains subject to significant export controls resulting from its designation in Country Group E of the Export Administration Regulations (“EAR”), which applies to terrorist list countries. This country group designation means that items subject to even the lowest levels of control require a license or license exception for export to Syria, and U.S. export control jurisdiction extends to items that contain as little as 10% U.S. content.
Counterterrorism Relief: Effective July 8, U.S. Secretary of State Marco Rubio delisted HTS as a Foreign Terrorist Organization (FTO), citing the group’s announced dissolution “and the Syrian government’s commitment to combat terrorism in all its forms.” This meant the removal of criminal risk under the Material Support Statute associated with knowingly providing material support or resources to the group, although the group remains designated as a Specially Designated Global Terrorist under EO 13224, as amended. Then, on November 6, with the support of the United States, the U.N. Security Council voted to remove U.N. terror sanctions from Al-Sharaa and transitional Interior Minister Khattab. One day later, on November 7, the United States itself removed the designations of al-Sharaa and Khattab as Specially Designated Global Terrorists, meaning they are no longer individually subject to U.S. sanctions.
Caesar Act Suspension: In conjunction with al-Sharaa’s November 10 White House visit, Rubio also announced the suspension of the Caesar Act for the maximum 180-day period. While Rubio had previously issued a Caesar Act waiver, suspension required his certification to Congress that Syria is meeting the conditions set out in the Act. This suspension had the effect of replacing the soon expiring waiver to remove the risk of sanctions designation for those engaging with the transitional government of Syria to support investment or development in Syria for the next 180 days.
Caesar Act’s Repeal: Prior to its repeal, the Caesar Act only allowed for suspension or waivers in 180-day increments. As a result, even when the Secretary of State acted to waive and later suspend the Act, its specter continued to stymie investment in Syria as investors remained reticent to invest in the face of sanctions uncertainty. On Dec. 18 Congress removed this impediment to long-term investment in Syria by fully repealing the Caesar Act in section 8369 of the FY 2026 NDAA, entitled “Repeal of Caesar Syria Civilian Protection Act of 2019.” This section also requires the President to report to Congress every 180 days for four years and certify to that Syria’s government is: (1) taking action against ISIS and other terrorist groups; (2) taking steps to remove foreign fighters from Syrian government; (3) upholding religious and ethnic minority rights; (4) not taking unilateral, unprovoked military action against its neighbors, including Israel; (5) taking steps to implement the March 10, 2025, agreement between the Government of Syria and the Syrian Democratic Forces; (6) taking steps to effectively combat money laundering, terrorist financing, and the financing of proliferation of weapons of mass destruction; (7) actively prosecuting those that have committed serious abuses of internationally recognized human rights since December 8, 2024; and (8) taking verifiable steps to combat the illicit production and proliferation of narcotics, including Captagon. If these conditions are not met for two consecutive reporting periods, section 8369 provides that the President “may consider whether to impose targeted sanctions on individuals under existing authorities,” but critically for attracting investment into Syria, the NDAA includes no mandatory sanctions or snapback provision that would reimpose Caesar Act sanctions.
Looking Ahead: Post-Caesar Repeal
The repeal of the Caesar Act sets the stage for next steps along the path of sanctions removal. The key players in this next phase are the Secretary of State and BIS.
Syria State Sponsor of Terrorism Removal: Syria was designated on the initial State Sponsor of Terrorism list in 1979, during the reign of Hafez al-Assad, and remains listed today despite the U.S. government’s steps to dismantle the Syria sanctions regime and the direction in EO 14312 to review Syria’s SST designation. As such, significant export controls still apply to Syria due to SST-related restrictions imposed under section 1754(c) of the National Defense Authorization Act for Fiscal Year 2019 (relating primarily to export control requirements), section 40 of the Arms Export Control Act (related to munitions items), and section 620A of the Foreign Assistance Act of 1961 (related to assistance). Until it is delisted, Syria is denied immunity by virtue of the SST-designation under the Foreign Sovereign Immunities Act (FSIA) if sued in U.S. court. Under the terrorism exception to the FSIA, if Syria is eventually delisted, any U.S. victims of Syrian terrorism will have six months from the time of delisting to make claims for damages incurred during the period Syria was designated as a State Sponsor of Terrorism.
Export Controls: Delisting Syria as a State Sponsor of Terrorism would also remove the legal underpinnings requiring stringent export controls on Syria. If the Department of State delists Syria, the ball will be in BIS’s court to update the EAR to account for Syria’s new status. Looking to the regulatory change BIS made following Sudan’s SST removal as an example, this will include the removal of Syria from EAR Country Group E:1 and a change to the de minimis threshold for U.S. export control jurisdiction from 10% to 25%, meaning that fewer items destined to Syria will be subject to U.S. export control. It will also make Syria eligible for additional license exceptions under the EAR and remove it from the most stringent, anti-terrorism-related controls. Once implemented, these changes should make it easier for developers and investors in Syria to obtain parts and machinery necessary for reconstruction and development, and they will remove barriers to consumer imports and business operations that support the country’s economic recovery. None of these changes will occur, however, until (1) Syria is removed as an SST; and(2) BIS publishes a rule change to amend the EAR.
Syria has a long road ahead towards reconstruction, development, justice, and accountability. As the country rebuilds and emerges from years of isolation, it requires international funding, technical assistance, and support. Removing Assad era barriers to engagement with the international community is a critical step along this path.
