Syria cuts duty free contracts for Assad's tycoon cousin Rami Makhlouf

It is the latest government move against the billionaire businessman after ordering the seizure of his assets in May

Syrian tycoon Rami Makhlouf has revealed that he has a web of offshore front companies to help President Bashar Al Assad evade Western sanctions.

Syria's government has announced the termination of duty free contracts with companies affiliated with President Bashar al-Assad's billionaire cousin Rami Makhlouf as part of an ongoing spat between the two men.

The economy ministry, in a post on Sunday on Facebook, said contracts had been cancelled to manage and operate duty free markets across Syria, including at Damascus airport and border posts with Lebanon and Jordan.

The companies are mostly owned by Mr Makhlouf who presides over an empire of businesses, including Syria's largest mobile operator Syriatel.

A document signed by the state-run General Organization for Freezones said the contracts were scrapped because of evidence that the main investor was "involved in smuggling goods and money".

After nearly a decade of war, Syria is crumbling under the weight of a repressive, corrupt ruling elite, a pandemic and an economic downslide compounded by western sanctions. AP Photo

Souvenir plates bearing the Syrian flag and the portraits of Russian President Vladimir Putin and Syrian President Bashar Al Assad are pictured in a shop in a bazaar in old Damascus. AFP

A man works in his metal workshop beneath a portrait of Syrian President Bashar Al Assad in old Damascus earlier this week. AFP

A Syrian boy carrying textiles is pictured in the bazaar in old Damascus. AFP

A Syrian shopkeeper waits for customers in a bazaar in old Damascus. AFP

Syrians walk in old Damascus in front of a portrait of Syrian President Bashar Al Assad. AFP

Syrian shoppers walk in the bazaar in old Damascus. AFP

Syrian men work in their bakery in old Damascus. AFP

Employees stack packets of the Syrian pound in the Central Syrian Bank in Damascus. AP Photo

An anti-Assad regime demonstration under way in Suweida, southern Syria, in early June 2020. AFP

It is the latest move by the Damascus government against the businessman who has been embroiled in a power struggle with the state since 2019, when authorities seized control of his charity, Al-Bustan, and dissolved militias affiliated to him.

When the finance ministry in December froze the assets of several businessmen over tax evasion and illicit enrichment, the Syrian press said Mr Makhlouf, his wife and companies were included.

In a bid to replenish state coffers, the government last month ordered the seizure of assets from Mr Makhlouf and his family.

Days later, Syria's justice ministry announced a travel ban on the tycoon, who is believed to be in the country.

The government has justified its latest measures by claiming Syriatel owes it money, including outstanding fees for maintaining its operating license.

But in a series of controversial videos published last month, Mr Makhlouf disputed such claims, saying some in power were seeking to overthrow him and reap a cut of the company's profits.

The 51-year-old Mr Makhlouf, who himself is under both US and EU sanctions, had been considered to be a pillar of Assad's regime ever since the president took over from his father in 2000.

His business empire, estimated to be worth billions of dollars, includes stakes in telecommunications, electricity and real estate.

His dispute with the government comes as Damascus grapples with a severe economic downturn after nine years of war.

The value of the Syrian pound has reached unprecedented lows against the dollar on the black market, sending prices soaring and plunging most of Syria's population into poverty.

Compounding the crisis, new US sanctions against Syria came into force this month, with the first batch of designations targeting 39 people or entities, including Mr Al Assad, his wife Asma and two companies owned by Mr Makhlouf.