By Rosette Hobeich and Vittorio Serracapriola
At a Glance
- Trump Begins Process to Rescind Syria’s SST Designation — The notification opened a 45-day congressional review and could ease remaining restrictions on exports, assistance and financing.
- US Senate Committee Advances Syria Sanctions-Repeal Bill — The bipartisan bill would repeal two Assad-era statutes while preserving targeted sanctions against human rights violators.
- Syria Launches National AML Strategy — Damascus renewed its engagement with MENAFATF ahead of a FATF 2027 evaluation.
- Switzerland Delists Seven Syrian State Entities — Bern aligned with previous EU measures while retaining targeted sanctions and security-related restrictions.
- Russia aims to establish commercial logistics hub at Syrian port — An agreement with Russia placed Pier No. 4 under Syrian administration, but Russian-linked counterparties and trade flows may continue to create sanctions risks.
- EU Court Rejects Makhlouf Family Sanctions Appeals — The Court dismissed appeals by three family members, leaving their listings intact and affirming the EU’s family-membership criterion.
Contents
President Trump informs Congress of his intent to remove SST designation off Syria
On July 8, US Secretary of State Marco Rubio announced that President Trump had formally notified Congress of his intention to rescind Syria’s designation as a State Sponsor of Terrorism (SST). The notification opened a mandatory 45-day congressional review period, during which Congress may pass a joint resolution of disapproval. As of August 12, Syria remained designated; absent congressional intervention, the rescission is expected to take effect on or around August 22.
CONTEXT AND ANALYSIS: The United States designated Syria as an SST in December 1979 because of the Assad government’s support for Palestinian armed factions and other non-state actors opposing Israel. Trump’s decision follows Executive Order 14312 of June 30, 2025, which terminated the comprehensive U.S. sanctions program on Syria and directed the Secretary of State to review the SST designation.
Despite the termination of the comprehensive U.S. sanctions program in 2025, the SST designation continues to trigger restrictions under Section 1754(c) of the Export Control Reform Act of 2018, which governs export controls; Section 40 of the Arms Export Control Act, which restricts defense exports and sales; and Section 620A of the Foreign Assistance Act of 1961, which prohibits most U.S. foreign assistance. Beyond these formal restrictions, the designation encourages over-compliance: banks, businesses and NGOs may avoid otherwise lawful Syria-related activity because they perceive elevated legal and reputational risks.
Beginning the rescission process marks another step in the broader U.S. re-engagement with Syria. Removing the designation would ease remaining constraints on exports, foreign assistance and financing while reducing the reputational risks associated with Syrian transactions. It would not, however, guarantee an immediate increase in trade or investment. Targeted sanctions remain in force, and international banks and companies will continue to conduct independent risk and compliance assessments before entering the Syrian market.
Senator Shaheen’s Sanctions-Repeal Bill Advances to Legislative Calendar
On the 17th of June, 2026, the Senate of Foreign Relations Committee approved Senator Shaheen’s S.3172 Bill to repeal the Syria Accountability and Lebanese Sovereignty Restoration Act of 2003 and the Syria Human Rights Accountability Act of 2012. The bipartisan legislation would repeal Assad-era sanctions while preserving sanctions on individual human rights violators. The bill aims to remove financial barriers associated with Syrian reconstruction efforts, and reflects strengthening U.S.-Syria relations following intensive bilateral diplomatic efforts.
CONTEXT AND ANALYSIS: The bill is framed as a way of facilitating the flow of goods and technology needed for Syria’s reconstruction efforts. The Foreign Relations Committee press release highlights the bill’s aims to reduce the incentives for Syria to turn to Russia or China. While left intentionally vague, the concern acknowledges that economically isolating Syria from Western and Gulf investors could incentivize them to turn to other actors for reconstruction financing through trade and investment.
The legislation also reflects a broader reassessment of the strategic role of sanctions in US policy toward Syria. The 2003 Syria Accountability Act was enacted under Bashar Al-Assad’s regime in response to Syria’s support of terrorist organizations, development of WMD capabilities, and their support of anti-U.S. insurgent groups in Iraq. The 2012 Syria Human Rights Accountability Act originally expanded sanctions authorities in response to the Syrian regime’s repression during the civil war. These statutes were designed to constrain a government that no longer exists and had become increasingly misaligned with Washington’s current objective of facilitating Syria’s economic recovery and regional reintegration. Their revisions come after President Trump’s 2025 Executive Order 14312 which terminated the comprehensive Syria sanctions program. Therefore, the legislation marked an important step in codifying the United States’ policy shift towards normalization with Syria under President Ahmed al-Sharaa.
Syria Launches AML Strategy In Push to Leave FATF Grey List
On July 21, Syria and the United Nations Development Programme (UNDP) launched a national strategy to combat money laundering, terrorist financing and proliferation financing. Central Bank Governor Safwat Raslan, who also chairs the Anti-Money Laundering and Counter-Terrorism Financing Commission, unveiled the strategy in Damascus. Raslan said the initiative would establish a unified national vision and improve coordination among relevant authorities. He framed the strategy as part of wider legislative and technical reforms designed to align Syria’s regulatory framework with Financial Action Task Force (FATF) recommendations and support the country’s efforts to leave the FATF grey list.
CONTEXT AND ANALYSIS: The July 21 strategy marks Syria’s attempt to consolidate its fragmented anti-money laundering and counter-terrorist financing reforms into a single national programme. It links legislative and technical changes to a measurable objective: demonstrating compliance with FATF standards and leaving the grey list. The MENAFATF delegation’s visit on July 23 gave the announcement an immediate external dimension. During MENAFATF’s first official visit to Syria since 2010, Syrian officials discussed an implementation timetable, coordination among state bodies and preparations for the country’s planned 2027 mutual evaluation. FATF concluded in 2014 that Syria had substantially completed its original action plan at the technical level, but the conflict prevented an on-site review of whether the authorities had implemented and sustained those reforms.
The new strategy could bridge the gap between formal compliance and demonstrated effectiveness by coordinating the institutions responsible for supervision, financial intelligence and enforcement. To do so, the authorities will need to produce evidence of effective risk-based supervision, transparent beneficial-ownership records, modern transaction-monitoring systems and consistent action against money laundering, terrorist financing and proliferation financing. The strategy’s launch may therefore reactivate a process that remained largely dormant for more than a decade, but the document alone will not change Syria’s status.
Nor would leaving the grey list automatically reconnect Syrian banks to the international financial system. Foreign banks conduct their own assessments before establishing correspondent relationships, scrutinising customer due diligence, sanctions screening and transaction monitoring. Years of isolation have left many Syrian institutions without the technology, reliable data or compliance capacity needed to satisfy that scrutiny. Credible controls could help foreign institutions distinguish legitimate Syrian businesses from actors still targeted by sanctions, reducing incentives for blanket de-risking. If the authorities translate the strategy into verifiable operational improvements, it could lower barriers to correspondent banking, remittances, investment and reconstruction finance.
Switzerland Removes Sanctions on Seven Different State Entities
On June 16, Switzerland’s revised sanctions regime entered into force, removing sanctions from seven different Syrian state entities, including the Ministries of Defense and Interior. This aligned Switzerland with prior adjustments made by the European Union in May to lift sanctions on the same seven Syrian government entities. The list also included the Airforce Intelligence Directorate, the General Intelligence Directorate, the Military Intelligence Directorate, the Political Security Directorate, and the Higher Institute for Applied Sciences and Technology (HIAST).
CONTEXT AND ANALYSIS: Switzerland’s sanctions architecture dates back to May 18, 2011, when the Swiss Federal Council mirrored the actions of the EU in response to the Assad regime’s violent crackdown on protests during the height of the Arab Spring. Both Switzerland and the EU retain financial sanctions, asset freezes, and travel bans of Assad-affiliated individuals and organizations, with the EU renewing restrictive measures until June 1, 2027. Switzerland also retains an arms embargo, control on equipment used for internal repression, and limits on surveillance technology.
Switzerland has also expanded its official presence in Damascus. On July 8, 2026, it formally opened a cooperation office, upgrading the humanitarian office it had maintained since 2017 following the closure of its embassy in 2012. The move strengthens Switzerland’s engagement on the ground but does not constitute the reopening of its embassy or the restoration of full diplomatic representation.
Russia aims to establish commercial logistics hub at Syrian port
On July 9, Reuters reported that the Russian-Syrian Business Council and Syrian logistics company Rus Line planned to establish a commercial hub for Russian goods at Pier No. 4 in Tartous. Project organizers said the hub would handle wheat, grains and other commodities, initially targeting cargo volumes of approximately 250,000 metric tons per month. They also said Syrian authorities would control the hub and approve its operations. After Reuters published the report, however, Syria’s General Authority for Ports and Customs denied that Russia would operate such a facility, describing the claim as “entirely false.” On August 9, Syria and Russia signed a memorandum governing the future of Russia’s facilities at Tartous and Hmeimim. Under the agreement, the Syrian state will assume control of Tartous’s commercial berth—including Pier No. 4 and its associated warehouses—and integrate it into the civilian administration. The parties will convert the remaining military facilities into joint training centers. The agreement does not confirm whether the proposed logistics hub will proceed.
CONTEXT AND ANALYSIS: The significance of the agreement lies less in Syria’s formal takeover of Pier No. 4 than in whether it creates a credible separation between civilian commerce and Russian military or sanctioned actors. Syrian administration could improve transparency and reduce the berth’s direct association with Russia’s naval presence. However, foreign banks will look beyond formal ownership and scrutinize the operators, beneficial owners, vessels, insurers, payment channels and cargo origins involved. Transactions linked to designated Russian entities or Russian-occupied Crimea would continue to carry substantial sanctions and reputational risks.
The agreement also reflects Damascus’s attempt to balance its dependence on Russian food and energy supplies against its need to attract Western and Gulf capital. Syria may have reclaimed formal control of strategic infrastructure, but it also assumes responsibility for ensuring that commercial operations do not allow sanctioned Russian networks to exploit its ports. The key test will therefore be the transparency of the contracts and payment arrangements governing Pier No. 4. Credible implementation could modestly reduce compliance concerns; opaque Russian-linked operations would reinforce de-risking and hinder Syria’s financial reintegration.
Court of Justice of the European Union rejected appeals filed by Ghada Adib Mhanna, Sara Makhlouf
On July 6, the Court of Justice of the European Union published a May 7 ruling rejecting the appeals filed by Ghada Adib Mhanna, Sara Makhlouf, and Kinda Makhlouf, relatives of Rami Makhlouf, cousin of the head of the ousted regime Bashar al-Assad. The ruling upheld the decisions by the General Court of the European Union to annul the appellants’ listing on sanctions lists. The court has also ordered the appellants to finance litigation costs, including those incurred by the Council of the European Union.
CONTEXT AND ANALYSIS: The Court of Justice’s decision underscores the European Union’s continued distinction between easing broad economic restrictions on Syria and maintaining targeted sanctions against individuals associated with the former Assad regime. The ruling therefore reinforces the legal durability of the EU’s listing process and may raise the evidentiary threshold for future delisting applications brought by similarly situated individuals.
The nature of the ruling does not prove criminal responsibility against the individuals concerned, but rather verifies the legality of the actions taken by the Council of the European Union and their correct enforcement of legal procedures. The ruling illustrates that the European Union’s efforts to facilitate Syria’s reconstruction continue to be accompanied by a commitment to preserving accountability measures against individuals linked to the former regime, even as it progressively dismantles broader economic restrictions on Syria.