What You Need to Know
- Key takeaway #1OFAC issued a general license that authorizes (1) all activity otherwise prohibited by the Syrian Sanctions Regulations, other than activity involving blocked persons, and (2) all activity with a limited list of blocked persons, including the Government of Syria.
- Key takeaway #2The U.S. State Department issued a waiver of certain otherwise mandatory secondary sanctions for 180 days with respect to any activity by a non-U.S. person.
- Key takeaway #3U.S. export controls have not changed, and exports of nearly all items and services to Syria remain subject to U.S. export control jurisdiction and still will likely require a license from BIS and DDTC until action is taken by U.S. export control agencies.
On May 23, 2025, the U.S. Departments of State (“State”) and the Treasury (“Treasury”) took actions that resulted in immediate sanctions relief for Syria. Specifically, Treasury’s Office of Foreign Assets Control (“OFAC”) issued General License 25 (“GL 25”) pursuant to the Syrian Sanctions Regulations (“SySR”), the Weapons of Mass Destruction Proliferators Sanctions Regulations (“NPWMD”), the Iranian Financial Sanctions Regulations (“IFSR”), the Global Terrorism Sanctions Regulations (“GTSR”), and the Foreign Terrorist Organization Sanctions Regulations (“FTOSR”). In parallel, Treasury’s Financial Crimes Enforcement Network (“FinCEN”) and State took supporting actions outlined below.
Treasury’s press release explained that the sanctions relief is intended to “facilitate activity across all sectors of the Syrian economy,” in order to “help rebuild Syria’s economy, financial sector, and infrastructure.”
Treasury’s press release also emphasized that sanctions relief was extended “with the understanding that the country will not offer a safe haven for terrorist organizations and will ensure the security of its religious and ethnic minorities.”
I. What GL 25 Changes
GL 25 authorizes all activity otherwise prohibited by the SySR, other than activity involving blocked persons. This includes the following, which functionally lifts OFAC’s portion of the comprehensive embargo on Syria: (i) the export of services to Syria; (ii) new investment in Syria; and (iii) transactions (including imports) related to Syrian petroleum and petroleum products.
GL 25 also authorizes all activity involving a specific set of blocked persons, comprising: (i) the Government of Syria (including Syrian President Ahmed al-Sharaa); (ii) 28 persons (26 entities and 2 individuals) specifically listed in the Annex to GL 25; and (iii) any entity 50 percent or more owned by the foregoing. Reflecting the range of authorities that have been used to impose sanctions on Syrian targets over the years, this authorization covers activity otherwise prohibited by the SySR, NPWMD, IFSR, GTSR, and FTOSR.
II. State-Issued Waiver
State simultaneously issued a waiver of certain otherwise mandatory secondary sanctions pursuant to the Caesar Syria Civilian Protection Act of 2019 (the “Caesar Act”). Specifically, for 180 days, State waived Caesar Act sanctions with respect to any activity by a non-U.S. person: (i) that would have been prohibited by the SySR (other than those involving blocked persons); or (ii) involving any of the blocked persons covered by GL 25 (i.e., the Government of Syria, the 28 listed persons, and any entity they own 50 percent or more of).
III. FinCEN-Issued Relief
In parallel, FinCEN issued specific relief to U.S. financial institutions to permit them to open and maintain correspondent accounts in the United States for the Commercial Bank of Syria under certain conditions. This includes any branch, office, or subsidiary of the Commercial Bank of Syria operating in Syria or in any other jurisdiction, including the Syrian Lebanese Commercial Bank. However, the relief granted does not waive or alter the obligations set forth in 31 C.F.R. § 1010.610 to conduct due diligence to detect and report any known or suspected money laundering activity conducted through or involving any correspondent account maintained in the United States for any foreign financial institution.
IV. What Has Not Changed under U.S. Authorities
Syria continues to pose sanctions and related U.S. enforcement risks for persons and entities operating there, including:
- Blocked Persons: While U.S. sanctions were effectively lifted on 28 sanctioned parties (they remain sanctioned, but all activity otherwise prohibited by the sanctions is now permissible), there remain hundreds of blocked parties operating in Syria. In particular, Hay’at Tahrir al-Sham (“HTS”), which led the overthrow of former President Assad and remains involved in governance around the country, is still a Foreign Terrorist Organization (“FTO”). While OFAC’s previous General License 24 remains in effect, and authorizes, subject to various restrictions, “transactions with governing institutions in Syria following December 8, 2024” even if HTS or other blocked persons are involved, HTS’s designation as an FTO seemingly continues to pose civil and criminal risks for entities that wish to now do business in Syria. Specifically, entities that knowingly provide assistance to HTS while doing business in Syria risk civil liability under the Antiterrorism Act of 1992 (18 U.S.C. § 2333(a)) which provides a civil cause of action for U.S. nationals injured by a terrorist attack against entities that supported the FTO responsible for their injuries. Further, entities may also be exposed to criminal liability for providing material support to an FTO under 18 U.S.C. § 2339B.
- Russia, Iran, North Korea Carveout: GL 25 and the Caesar Act waiver do not allow activity that: (i) benefits the Governments of Russia, Iran, or the Democratic People’s Republic of Korea (“DPRK” aka North Korea); or (ii) relates to the transfer or provision of goods, technology, software, funds, financing, or services to Iran, Russia, or the DPRK.
- Export Ban: Neither the U.S. Department of Commerce’s Bureau of Industry and Security (“BIS”) nor State’s Directorate of Defense Trade Controls (“DDTC”) made changes to U.S. export control regulations. Syria remains a proscribed country listed in § 126.1(d)(1) of the International Traffic in Arms Regulations (“ITAR”), and continues to be subject to Country Group D:5 and E:1 controls pursuant to the Export Administration Regulations (“EAR”). As a result, all items subject to U.S. export control jurisdiction (other than most food and medicine) still require a license for export or reexport to Syria.
- State Sponsor of Terrorism: Syria remains a State Sponsor of Terrorism (“SST”). While the President’s statement that he intends to lift “all” sanctions on Syria suggests the Administration may rescind this SST designation, doing so requires a report to Congress making specific factual findings regarding the government’s cessation of support for terrorism. There has been no public indication that such a report has been submitted to Congress. The primary consequences of SST designation include restrictions on U.S. foreign assistance, a ban on defense exports and sales, and certain controls over exports of dual use items, as well as increased exposure to litigation and claims by U.S. citizens.
- Sanctions of Other Jurisdictions: State and Treasury’s actions have no effect on sanctions issued by the United Nations or other jurisdictions, though both the European Union and the United Kingdom have already lifted some sanctions on Syria, and announced recently that they intend to provide further and more substantial sanctions relief.
V. What’s Next
- The May 23, 2025, actions taken by State and Treasury are a first step in a broader U.S. government effort to remove the sanctions imposed on Syria.
- Other actions the U.S. government might possibly undertake in the near future include: (i) amending the EAR to loosen U.S. export controls on Syria; and (ii) the submission of a report to Congress to repeal Syria’s SST designation. It is less likely that the Trump Administration will amend the ITAR to remove Syria from the list of proscribed countries.
- OFAC plans to issue further guidance related to GL 25.
- As noted in State and Treasury’s press releases, sanctions relief comes with expectations that the Syrian government takes action on certain “important policy priorities,” which, at least, seem to include ensuring: (i) Syria will not offer a safe haven for terrorist organizations; and (ii) the security of religious and ethnic minorities.
For further information, please contact:
David (Dj) Wolff, Partner, Crowell
djwolff@crowell.com
