US sanctions on Assad ally seen as message to Syrian regime and Iran

Samer Foz is a Syrian businessman in luxury developments

Bashar Al Assad has to deal with challenges both at home and abroad. EPA

The Trump administration's decision to impose sanctions on Syrian mogul Samer Foz is a warning to others who are considering doing business with the Assad regime or Iran, US officials say.

Mr Foz, a well-known Syrian businessman in luxury developments, was designated by the US on Tuesday along two of his sons, and 13 people and entities associated with him.

The entities include the Four Seasons hotel in Damascus and the Orient Club.

Members of the UN have been staying at the Four Seasons as their base during the conflict.

But a US official said that the UN’s general licence should allow its staff to remain at the hotel, and that the holding company had cut its ties with the Damascus branch.

The US is also accusing Mr Foz of war-profiteering.

“This Syrian oligarch is directly supporting the murderous Assad regime and building luxury developments on land stolen from those fleeing his brutality," said Sigal Mandelker, undersecretary of the Treasury for Terrorism and Financial Intelligence.

The US envoy to Syria, James Jeffrey, said that the designation showed the “US is not taking its eye of the ball in Syria, be it Idlib, or engagements from Sochi to Jerusalem".

Analysts familiar with Mr Foz’s background regard it as a message to the Syrian regime, Iran and regional stakeholders.

Michael Weiss, author of ISIS: Inside the Army of Terror, read two messages in the designation.

“The first is that the pro-regime argument that sanctions are hurting Syria and should be lifted is even more irrelevant now,” Weiss said.

“And the US is beginning to confront Iranian hegemony in Syria.”

The Treasury implicated Mr Foz in providing oil shipments to Iran through companies in Lebanon.

Weiss said that Mr Foz was an accomplice to Iran's Revolutionary Guard Corps' oil smuggling, so a flow of revenue to the force has been cut.

But Randa Slim, director at the Middle East Institute, said the designation was a warning shot to regional bodies to think twice before doing business with the regime of Syrian President Bashar Al Assad.

“This is a deterrent message to any Syrian and/or regional businessmen or business entities contemplating investments in Syria, and an affirmation of the Trump administration message that reconstruction money will not be forthcoming until the regime changes its behaviour,” Ms Slim said.

She said it was significant that the US aimed at the inner circle of the Assad regime.

"These sanctioned individuals and entities are also involved in almost every sector of the Syrian economy," Ms Slim told The National.

By highlighting Mr Foz’s ties to Iran, the US could be drawing a line between “Russian and Iranian business involvement in Syrian affairs, sanctioning the latter but not the former", she said.

Others see challenges in implementing the sanctions. Mr Foz was sanctioned in January by the EU and many in the Assad circle are on US blacklists.

“The major challenge in implementing those sanctions is that Mr Foz can still limit his exposure by being the silent partner in deals cut in land development that are not exposed to the international banking system,” said Nicholas Heras, a senior fellow at the Centre for New American Security.

“He is a lynchpin of the regime's new structure and Mr Al Assad owes him a lot for his support and efforts to keep him in power."

Another challenge with US sanctions in Syria, Mr Heras said, was “that the regime has established an entire internal ecosystem of economic activities that are domestic in Syria, and which are not easily combated through the international financial system”.