Tracking Regime Cronies: How to Deal with Assad’s Economic Networks

After Hafez al-Assad took power in 1970, economic success in Syria was never simply the result of market forces or entrepreneurial acumen. Instead, access to wealth was contingent on proximity to the ruling elite, the security apparatus, and the Ba’ath Party. Under Bashar al-Assad this system evolved into a more entrenched form of crony capitalism, where a select group of businessmen were empowered by the state to rise to prominence due to their loyalty and financial support to the regime. Figures like Rami Makhlouf, Mohammad Hamsho, and Samer Foz controlled vast empires spanning telecommunications, trade, and banking.

As the war economy emerged after 2011, crony capitalism deepened, giving rise to war profiteers whose loyalty to and support for the regime became more important than ever. Figures like the Katerji family and Khodr Ali Taher capitalized on smuggling, militia financing, and the illicit captagon trade. These individuals, who initially helped sustain the regime, later became indispensable to its survival, providing vital financial support in the face of destruction and international sanctions. As the war fronts froze and the economic situation worsened over the last five years of Assad’s rule, pressure mounted on these figures to contribute more to the regime. This led to significant resistance, most notably the fallout between Assad and then-richest man in Syria Rami Makhlouf, a former ally. In response, Assad began to establish front businesses that operated under his direct control, ensuring a steady stream of revenue while shielding himself from public criticism.

The Challenge of Economic Reform

Now that the Assad era has ended, Syria faces a fundamental dilemma: how to hold entrenched businessmen and front business networks accountable—and whether to redistribute their wealth—while avoiding further damage to an already fragile economy. The administration of Interim President Ahmad al-Sharaa, backed by Hayat Tahrir al-Sham (HTS), has pledged to root out corruption and dismantle the centralized economic system that benefited Assad’s allies.

To this end, the Caretaker Government (CG) has established a “special committee” tasked with investigating the assets and financial dealings of high-profile businessmen linked to the former regime. This move follows earlier reports that the government had reached settlements with businessmen linked to the former Assad regime unilaterally, raising concerns over a lack of transparency.

Before the special committee was formed, the CG had already taken significant measures, including freezing bank accounts and seizing the assets of individuals, particularly those listed under US and EU sanctions. Among the most notable targets was the Katerji Group, a major player in oil, tourism, and shipping. However, dismantling these networks has proven challenging. Many regime-affiliated businessmen had already stashed their wealth abroad in the UAE, Russia, and Eastern Europe, using intricate webs of shell companies and offshore accounts to obscure their economic activities.

Beyond the high-profile figures sanctioned internationally, CG authorities in Damascus have struggled to effectively track and penalize lesser-known cronies. Interviews with businesspeople and bankers in Damascus reveal the secretive nature of their activities, with many lesser cronies relying on opaque financial vehicles to shield their dealings. Indeed, many of these individuals used shell companies and concealed partnerships to obfuscate their actions. Complicating matters further, Syria’s judiciary has yet to fully resume operations, delaying the legal processes necessary to enforce accountability and reclaim misappropriated assets—a critical step in restoring business community trust and attracting investment.

The Role of Former Regime Cronies in Syria’s Future

The CG cannot abruptly exclude Assad-era economic actors, as their activities dominate key industries essential for Syria’s recovery. A heavy-handed crackdown on regime-affiliated businessmen could lead to severe disruptions in the supply of goods and services, given their entrenched control over a broad range of business activities.

Table: Prominent Assad Regime Cronies and Business Fronts 

Trade Minister Maher Khalil al-Hasan acknowledged the challenge of dealing with Assad-era business actors, stating that “our policy is to allow for their employees to continue working and supplying goods to the market while freezing their money movements now.”This dilemma has sparked a broader debate about whether these figures should be conditionally allowed to reintegrate into the economy or be permanently excluded. Some analysts advocate for a conditional settlement approach, arguing that these businessmen could contribute to reconstruction in exchange for legal leniency. Yet such deals could perpetuate a culture of impunity and allow crony capitalism to reemerge under a new guise.

The CG should not decide the fate of these businessmen alone. Without a fully functioning judiciary, measures taken against regime cronies could be excessively punitive for some or overly lenient for others, undermining the credibility of the CG’s efforts to enforce accountability and instilling fear in the business community. 

Dealing with Assad-era economic networks is not just a domestic issue—it also carries international legal and political implications. Transitional justice mechanisms must be put in place to ensure that economic crimes committed under Assad’s rule are addressed, while also enabling the country’s economic recovery. For Syria, a hybrid approach combining legal prosecution, asset recovery, and structured reintegration could provide a path forward, balancing the need for justice with the country’s urgent need for economic stability and reconstruction.