UK lifts sanctions against dozens of Syrian entities including central bank

The decision follows a similar move by the EU, with the removal of restrictions on energy, banking and reconstruction

The Central Bank of Syria in Damascus, which has been removed from the UK's sanctions list. Reuters

The UK government on Thursday removed 24 Syrian entities from its sanctions list and unfroze their assets.

Among those to have sanctions lifted were the Central Bank of Syria, petroleum companies and flag carrier Syrian Airlines.

Western countries are rethinking their approach to Syria after rebel forces led by Hayat Tahrir Al Sham group ousted former president Bashar Al Assad and his government last December.

Syria's new government has called repeatedly for the lifting of western sanctions that were imposed during the war.

The announcement said entities including the central bank, the Commercial Bank of Syria and the Agricultural Co-operative Bank had been delisted and were no longer subject to an asset freeze.

The Syrian Petroleum Company, Syria Trading Oil Company and Overseas Petroleum Trading were also among those delisted.

Positive direction

Bassel Hamwi, who headed one Syria’s largest private banks and is now chief executive of HamwiConsult in New York, welcomed Thursday's move. “This is a pragmatic step towards stabilising the economy and slowly reinstate Syria into the global financial system,” Mr Hamwi told The National.

He was optimistic that the new central bank governor, Syrian economist Maysaa Sabreen, would be able to build bridges with the international banking system. “She’s got a lot of local experience, she’s the best person to do this.”

John Slinger, a Labour MP and former advisor to the anti-Assad opposition, told The National that the UK government’s approach would “help encourage the positive direction of travel under the interim authorities”.

He said the sanctions had been lifted in “a limited way” on 24 entities which were previously used by the Assad regime for its “vicious repression of ordinary Syrians”.

“All of this will, I hope, encourage and strengthen a Syrian-led and Syrian-owned political transition based on UN Security Council Resolution 2254 leading to an inclusive, non-sectarian and representative government.

“As someone who helped advise the moderate Syrian opposition coalition in the past, I am particularly glad that there has been positive progress, but it is clearly action, not words that matter now for the Syrian people, who have suffered so much.”

EU lifts restrictions

Last month, EU countries suspended a range of sanctions against Damascus, including restrictions related to energy, banking, transport and reconstruction. The EU has a range of sanctions in place targeting people and economic sectors in Syria.

They also lifted asset freezes for five banks, eased restrictions on the Syrian central bank and indefinitely extended an exemption to facilitate the delivery of humanitarian aid.

“We have spent the past two months engaging in discussions and diplomatic efforts to ease the unjust sanctions that have burdened our people,” Syrian Foreign Minister Asaad Hassan Al Shibani said on X last month.

Maysaa Sabrine is the first woman to lead the country's central bank. Reuters

The UK's Foreign Office signalled the move last month by saying it would bring forward measures in the coming months adapting the Syria sanctions regime. “We are making these changes to support the Syrian people in re-building their country and promote security and stability,” British minister of state Stephen Doughty said at the time.

Britain had said it will send its international development minister to Syria and seeks to establish a permanent diplomatic presence after a decade of civil war.

The National reported previously that Jonathan Powell, the UK's National Security Adviser, had held low-key meetings with the new Syrian government, which suggested he could play a leading role in the diplomacy.

Easing of sanctions will help recovery

Mr Hamwi worried about the decline in financial skills in Syria, as the Central Bank led by Ms Sabreen's team seeks to establish access to international loans. “They will probably need help.” He urged Ms Sabreen and her colleagues to seek advice from foreign counterparts to private banks operating in Syria and other central bankers.

While the US Caesar Act sanctions on the central bank are still in place, the UK’s role as a “bridge” between Europe and the US, and as “Europe’s major financial artery”, mean its impact would be significant.

Yet more could be done to ensure that the Syrian economy recovers and to assist reconstruction, said Mr Hamwi.

A bank teller counts Syrian pound banknotes at the Syrian Central Bank in Damascus. EPA

“It’s a great first step. Now there has to be a focus on creating jobs for locals,” he said, adding that sanctions preventing overseas transfers were also affecting people’s livelihoods.

“It’s pivotal to get Syria right for the Middle East and the world at this time,” said Mr Hamwi.

UK MP Shockat Adam told The National the move was a first step towards stabilising Syria. “This is a welcome step for the people of Syria who have faced struggle and sacrifice for a generation,” said the independent MP.

“Britain must play only a positive role in enabling the people of Syria to determine their future and lifting the sanctions is a first step toward stability but we must extend lifting sanctions on the financial industry as the Syrian economy is in desperate need of a boost.

But Mr Adam warned that if Syria's interim government “negate any human rights conditions, sanctions can and must be reimposed”.

Future economic activity

There are also signs Europe is bracing for longer term economic activity in Syria, after its partial suspension of sanctions on some entities – including four Syrian banks and Syrian Airlines – in February.

Speaking in Brussels in January, German Foreign Minister Annalena Baerbock said “a big German company” should start operating again Syria. The company she was referring to was Siemens Energy, The National understands.

German media has reported that Berlin's special envoy to Syria, Stefan Schneck, visited the Deir Ali power plant, near Damascus, in January. Contacted by The National, Siemens Energy said that “we do not comment on rumours and speculation”.

The EU Council has 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”, it said.