The European Union has suspended sanctions targeting Syria's energy, transport and banking sectors to accelerate the country's economic recovery, nearly three months since the fall of the Assad regime.
“This decision is part of the EU’s efforts to support an inclusive political transition in Syria and its swift economic recovery, reconstruction and stabilisation,” the EU Council said in a statement on Monday.
Four Syrian banks – Industrial Bank, Popular Credit Bank, Saving Bank and Agricultural Co-Operative Bank – were removed from the EU's sanctions list along with Syrian Arab Airlines.
The EU Council also introduced exemptions to the ban on establishing relations between financial institutions operating in Syria and in the EU. This was needed “to allow transactions associated to the energy and transport sectors as well as transactions needed for humanitarian and reconstruction purposes”, the statement said.
"There is hope to build an inclusive country and we are closely working together with the regional actors to achieve this," said Kaja Kallas, European Commission Vice President and foreign affairs chief.
Additionally, the EU Council introduced an exemption to allow the export of luxury goods to Syria for personal use. A humanitarian exemption was also indefinitely extended.
The easing of sanctions comes as the EU's 27 foreign ministers gather in Brussels for discussions that include the Middle East but will be dominated by attempts at boosting EU support for Ukraine's war effort against Russia.
The EU has, however, left open the possibility to reintroduce sanctions at a later stage. "It's a step-for-step approach," Ms Kallas said. European countries have been cautiously engaging with Syria's new ruler, former rebel leader Ahmad Al Shara.
“Following up on today's decision, the Council will pursue its work, and assess whether further economic sanctions could be suspended. It will also continue to closely monitor the situation in the country to ensure that such suspensions remain appropriate,” the EU Council said.
No guarantees for EU companies
Yet it remains unclear how European companies will operate in Syria. While some ministers said they would encourage the private sector to invest in the country, Ms Kallas said there would be no guarantees to protect them from US sanctions. They remain in place despite a decision last month to issue a short-term waiver to enable more humanitarian aid delivery.
Responding to a question from The National, Ms Kallas said: "The banking sector is always very complicated. Even in European countries, companies might run into difficulties with the banks. So can we give a guarantee? No, we can't."
Minister of State at the German Foreign Office, Tobias Lindner, said he was aware of national companies interested in working in Syria. "That's good news," Mr Lindner said. "Today we have taken the first step that alleviates some of the sanctions and it is the precondition for investment by foreign companies."
Syrians, including the country's new rulers, have been calling for western sanctions against their country to be lifted so they can rebuild after 14 years of civil war. It is estimated that reconstruction in Syria will cost between $250 billion and $400 billion.
“We need to lift sanctions to safeguard the political transition; to allow the recovery of the economy; to facilitate the operational environment of the civil society; and to contribute to a just reconstruction that can support the justice and accountability track,” Sawsan Abou Zeinedin, chief executive at the Madaniya network, told The National.
The EU issued sanctions against Syria in response to the former Assad regime's brutal repression of peaceful protests in 2011 that morphed into civil war, killing about half a million people and displacing millions.
