By Vittorio Maresca di Serracapriola and Natasha Hall
Issue 7: March 2026
At a Glance
- EU and Japan Remove HTS from Sanctions Lists Following UN Delisting — Brussels and Tokyo aligned with the UN Security Council’s decision to delist Hay’at Tahrir al-Sham, reducing compliance risks for engagement with Syrian ministries and state institutions, though US and UK terrorist designations remain in place.
- US Federal Reserve Reactivates Syria Central Bank Account — The Central Bank of Syria announced that its account at the Federal Reserve Bank of New York has been reactivated, reopening a sovereign channel for US dollar settlements.
- Syria’s Central Bank Launches Oliver Wyman Gap Assessment — Damascus commissioned Oliver Wyman (a leading international management consulting firm) to assess governance, AML/CFT, and regulatory gaps at the Central Bank as part of broader efforts to rebuild correspondent banking relationships and support financial sector reintegration.
- OFAC Settles $3.8 Million Case for Violations of Now-Lifted Syria Sanctions — The Treasury Department fined a US person for providing services to Syrian companies between 2018 and 2021, underscoring that penalties can still apply to conduct that occurred while sanctions were in force, even though most sector-wide restrictions on business with Syria have since been lifted.
- EU Court Upholds Sanctions Listing of Syrian Businessman Samer al-Dibs — The EU General Court dismissed a request by Syrian businessman Samer al-Dibs to annul his designation, confirming that relocation outside Syria and reduced business activity are insufficient to justify delisting where regime-era economic influence networks remain intact.
Contents
Syria’s Central Bank Reopens Account at the US Federal Reserve
The Federal Reserve Bank of New York reactivated Syria’s central bank account in March 2026, marking the first time since 2011 that the account has been operational. The US Treasury Department welcomed this move, stating that it was a significant step toward Syria’s reintegration into the global financial system.
CONTEXT AND ANALYSIS: The Federal Reserve Bank of New York, the most important Fed branch for international finance, holds accounts for foreign central banks. These accounts are used to hold USD reserves, settle international transactions, and access core components of the US financial system, including Fedwire and dollar clearing. Through Fedwire—the Federal Reserve’s real-time gross settlement system—and access to official dollar-clearing channels, a foreign central bank can move funds directly across accounts at the Federal Reserve and settle large-value USD payments in central bank money rather than via commercial correspondent banks. The Central Bank of Syria having such an account establishes a direct operational link to the dollar system.
In August 2011, following the outbreak of the Syrian civil war, the Obama administration issued Executive Order (EO) 13582, introducing broad prohibitions on services and investment. Under EO 13582 and the Syrian Sanctions Regulations (31 CFR Part 542), the Central Bank was formally blocked, severing this link.
The current development comes as Syria’s central bank contracted the Oliver Wyman firm to conduct a gap assessment identifying the reforms required to meet international regulatory and compliance standards.
The reactivation of the account means the Central Bank of Syria can once again hold and move USD balances, potentially access Fedwire, and re-engage, albeit partially, with formal financial channels. The US Treasury Department is permitting a limited re-entry into the regulated financial system.
For a system that spent years cut off from normal banking channels, this change is significant. During that period, Syria’s monetary authorities relied on indirect and often opaque arrangements to execute state-level cross-border payments. These included routing transactions through state-owned commercial banks that retained limited foreign correspondents; settling payments via allied jurisdictions such as Russia and Iran; and using ad hoc intermediary structures for trade finance and reserve movements outside standard dollar-clearing channels. The reopening of the account reduces the need for such workarounds. It provides foreign banks and trade counterparties with a clearer sovereign settlement point, improves transparency over reserve management, and increases confidence that official dollar payments can once again clear through a regulated channel.
While this measure will not immediately reverse de-risking or restore commercial banking activity, it addresses a key structural constraint by establishing a credible, sovereign-backed channel for dollar-denominated trade and import payments.
EU and Japan Follow UN in Delisting HTS
In the first week of March, the EU and Japan removed Hay’at Tahrir al-Sham (HTS) from their sanctions lists following a United Nations Security Council (UNSC) decision to delist the group pursuant to Resolutions 1267 (1999), 1989 (2011), and 2253 (2015).
CONTEXT AND ANALYSIS: On 27 February, the UN Security Council removed HTS from the ISIL (Da’esh) and Al-Qaida Sanctions List under the 1267/1989/2253 sanctions regime. As a result, the UN asset freeze, travel ban, and arms embargo no longer apply to the group, also known as Jabhat al-Nusrah.
Before this shift, the UN designation and its implementation by Member States had sustained a high-risk compliance environment for actors linked to, or perceived as aligned with, HTS. Even where regulators granted additional latitude to state-linked institutions such as the Commercial Bank of Syria, financial actors remained cautious about engaging with ministries and agencies associated with the post-Assad authorities, some of whom were connected to a designated entity.
The EU and Japan’s delistings, implemented following the UN decision, materially improve this risk calculus. Western banks with global operations can now operate with greater certainty, as transactions involving Syrian government institutions no longer breach a UN-mandated asset freeze.
EU alignment is particularly significant because it affects export licensing regimes, procurement eligibility, and access to development financing channels. Ministries can now interact more easily with European contractors, insurers, engineering firms, and infrastructure operators, while arguments based on the risk of indirect benefit to a listed entity have become substantially weaker. Prior to 2011, the EU was one of Syria’s main trading partners, with bilateral trade peaking at over EUR 7 billion in 2010. Japan’s decision reinforces that this shift is not limited to the Euro-Mediterranean space but reflects a broader G7-level recalibration of the compliance environment.
However, the continued US designation of HTS as a Specially Designated Global Terrorist (SDGT) remains a major constraint. Even though the UN, EU, and Japan have moved toward delisting, the US position still heavily influences global risk calculations. At the same time, the UK has not yet updated its sanctions to reflect the UN decision, creating a mismatch: EU-based actors can follow the new designation, while UK-based financial institutions and businesses must still treat HTS as sanctioned. As a result, it remains unclear whether delisting by the EU and Japan alone will be sufficient to restore confidence in transacting with Syria’s new authorities.
Syria’s Central Bank Commissions Oliver Wyman Review to Align with International Compliance Standards
Syria’s central bank has launched a review of its systems and compliance framework, commissioning the global consulting firm Oliver Wyman to carry out the assessment. The firm will conduct a gap analysis to identify the reforms the Central Bank must implement to meet international regulatory and compliance standards, including benchmarks on governance, transparency, and financial integrity. The review is expected to take several months.
CONTEXT AND ANALYSIS: Oliver Wyman has conducted extensive financial sector reviews and regulatory assessments across the Middle East, including in the Gulf, Lebanon, and Iraq. Its involvement in Syria comes at a time when the country’s financial sector remains largely opaque after more than 14 years of isolation from the global financial system.
Since the outbreak of the civil war in 2011, Syria’s banking sector has undergone a near-total collapse. Punishing sanctions, widespread de-risking, the severing of correspondent banking relationships, and a sharp decline in economic activity have devastated the sector. The extensive use of cash and reliance on hawala networks have further complicated regulatory oversight, while corruption and a severe liquidity crisis have eroded confidence in the banking system. Limited transparency and weak due diligence continue to obscure the sector’s actual condition.
Syria remains on the Financial Action Task Force (FATF) grey list due to ongoing security challenges, which prevent a full assessment (Mutual Evaluation Report) of its financial system and reflect continued weaknesses in controls against money laundering and terrorism financing. Policymakers and financial institutions still lack a clear understanding of conditions within the Central Bank of Syria and commercial banks, making it difficult to judge whether the sector is ready to reconnect with international markets. Conducting a baseline assessment of the Central Bank’s capacity and compliance systems will be an important step toward supporting broader economic recovery.
The Central Bank of Syria’s review of its compliance, governance, anti-money laundering (AML), and counter-terrorism financing (CFT) frameworks could play a pivotal role in restoring ties with international correspondent banks and institutions such as the European Central Bank. Support has also come from public- and private-sector stakeholders. Following a February visit to Syria, the International Monetary Fund agreed with Damascus to implement “an extensive technical assistance program,” including “financial sector reforms in support of the Central Bank of Syria Strategy 2025–2030,” with a focus on the “rehabilitation of the banking and payments systems and strengthening banking supervision.” Similarly, the United Nations Development Programme inked a strategic partnership with the Central Bank of Syria to “lay groundwork for a resilient and transparent financial sector.”
Few international financial institutions are willing to re-enter the Syrian market without credible assurances that effective safeguards are in place. A comprehensive gap assessment could therefore improve external perceptions of the Central Bank’s reform trajectory and make it easier for US and European banks to justify cautious re-engagement with Syria’s financial system.
OFAC Settles $3.8 Million Case Against US Person for Violations of Now-Lifted Syria Sanctions
On 25 February 2026, the US Treasury Department’s Office of Foreign Assets Control (OFAC) announced a USD 3.8 million settlement with a US person to resolve 20 apparent violations of now-lifted sanctions on Syria. Between January 2018 and December 2021, while US sanctions on Syria remained in place, the individual provided managerial services to Syrian entities while serving as an executive and board member of four Syrian real estate companies.
CONTEXT AND ANALYSIS: OFAC regulations apply to US citizens and lawful permanent residents (green card holders) wherever they are located. These obligations therefore extend to US persons living and working outside the United States. While residing abroad, the individual assumed several executive and board positions with Syrian-incorporated real estate companies that constructed and operated large-scale luxury projects in Syria. In these roles, the individual provided managerial services, participated in board and shareholder meetings, and contributed to personnel management and marketing activities. Over four years, the individual provided managerial services to Syrian companies on 20 occasions, in apparent violation of Section 542.207 of the Syrian Sanctions Regulations (SySR). The individual ceased this conduct only after receiving an administrative subpoena from OFAC.
OFAC determined that the individual did not voluntarily disclose the violations and classified the case as egregious. It therefore calculated a civil monetary penalty of USD 7.6 million but ultimately agreed to a settlement of USD 3.8 million. Aggravating factors included the individual’s reckless disregard for US sanctions obligations and their knowledge that they were providing managerial services to companies organized and operating in Syria.
This case sets an important precedent for individual liability across sanctions programs. US sanctions regimes—whether country-based or targeting Specially Designated Nationals—generally prohibit the provision of services unless an exemption or general license applies. The penalties imposed here serve as a reminder that US persons asked to serve on boards or advisory committees of non-US companies must assess sanctions exposure carefully, including both geographic risk (operations in sanctioned jurisdictions) and counterparty risk (involvement of designated persons).
OFAC also emphasized that it can hold individuals accountable for sanctions violations even after the relevant sanctions have been lifted. OFAC enforces violations based on the sanctions in force at the time of the conduct. This authority extends to enforcement actions related to previously lifted US sanctions on Syria.
OFAC has stated that most US sanctions on Syria have been lifted. US persons, anywhere in the world, can generally do business in Syria and with Syrian entities, although some limited restrictions still apply.
EU Court Rejects Challenge by Samer al-Dibs to Syria Sanctions
On 18 March 2026, the EU General Court dismissed a challenge by Syrian businessman Samer al-Dibs against his continued inclusion on the EU’s Syria sanctions list. The Court ruled that the Council of the European Union had provided sufficient reasons to maintain the asset freeze and travel restrictions against him. Dibs, who lives in Beirut, had asked the Court to annul EU measures adopted in May 2024 and May 2025 that renewed his designation. He argued that the Council failed to justify its decision, violated his rights of defence, and misjudged his current links to former Syrian President Bashar al-Assad’s regime.
CONTEXT AND ANALYSIS: The EU first sanctioned Samer al-Dibs on 24 April 2024, describing him as a “leading businessperson operating in Syria” with activities in several sectors, particularly the chemical industry and real estate. The Council also identified him as a member of the Board of Directors of the Syrian-Chinese Business Council, chairman of the Damascus and Rural Damascus Chamber of Industry, a member of parliament, and a close associate of Maher al-Assad.
The Court held that none of the arguments advanced by Dibs were sufficient to rebut the presumption that he retained influence. His relocation outside Syria, the fall of Assad, and the reduction of his formal roles or day-to-day business activities did not demonstrate that his networks and economic influence had disappeared. The judgment focused on current risk arising from these continuing structural links, rather than accountability for past activities. As long as his economic footprint and regime-era ties are considered to remain intact, the Court accepted that he continued to pose a potential risk of destabilization and therefore a risk to Syria’s transition.
Dibs belongs to the traditional Damascene business community that retained influence under Bashar al-Assad. He served as a parliamentarian, headed the Damascus and Rural Damascus Chamber of Industry, and played a visible role in regime-era business outreach abroad.
Among the main arguments he raised, Dibs said that he had moved to Lebanon, meaning that he was no longer active in Syria; that his health problems limited or ended his business activity; and that some of the positions attributed to him were no longer accurate. The Court rejected all of these arguments.
The judgment confirms that the Court now applies a network-based liability standard rather than an activity-based one. Continued operational capacity inside Syria is no longer required to justify maintaining sanctions. Instead, the Court assesses structural embeddedness in regime-era economic networks, legacy institutional roles, the ability to mobilize capital or influence, and the persistence of patronage ties.
This approach marks a shift from earlier Syria listings, which relied more heavily on evidence that designated individuals continued to provide economic benefit to the regime. In this case, sanctions function primarily as instruments for managing transition-related risks linked to the persistence of regime-era economic networks rather than as accountability measures for past activities. The ruling also makes clear that regime change does not automatically dissolve influence networks. The burden now falls on applicants to demonstrate that their influence has effectively disappeared.