Jan 27, 2019

Since December 2018, Syria has achieved major diplomatic victories in terms of Damascus’ reintegration into the Arab world’s diplomatic fold. Regional states, which, to various extents, supported the Syrian rebels fighting to topple President Bashar al-Assad’s regime earlier in the conflict, have mostly come around to accepting the inevitable and started normalizing their relations with Syria. Yet the United States shuns Syria’s re-entry into the mainstream diplomatic arena of Arab states, believing that regional regimes should later leverage the opening of ties with Damascus as a bargaining chip to extract greater concessions from Assad.

By opposing the legitimacy of Assad’s government and continuing to impose sanctions on Damascus and individuals in Assad’s clique, Washington is creating dilemmas for Gulf Cooperation Council (GCC) states, such as the United Arab Emirates, that see Syria’s reconstruction as representing important opportunities for economic and geopolitical empowerment. Undoubtedly, securing lucrative contracts in Syria’s reconstruction will inevitably entail cooperating with the Damascus regime. Yet this reality has potential to create further complications in regional dynamics, as well as US-GCC relations.

The UAE’s hosting of a Syrian trade delegation earlier this month was a case in point. Mohammed Hamsho, a Syrian closely tied to the Assad family who has been sanctioned by the US Treasury, led the delegation. Other Syrian lawmakers and businessmen also targeted by US sanctions attended too. The long reach of US sanctions is unquestionably a concern for GCC states that seek to exert their influence in Syria, primarily via construction projects. Non-US companies, such as Emirati ones, seeking to enter Syria must account for Washington’s sanctions because any involvement of US citizens or American firms risks trouble. Given that Syria’s business climate is opaque, even careful companies that do their due diligence may find themselves violating US sanctions if they deal with Syrian individuals or entities targeted by Washington.

In September, the US administration announced the imposition of new sanctions on Syrian individuals and entities for having provided Assad’s regime with weapons and fuel. Two of the companies were UAE-based: International Pipeline Construction FZE and Sonex Investments Ltd. The US State Department may well target more entities in the Emirates based on their ties with the Damascus regime.

The Caesar Syria Civilian Protection Act passed in the House of Representatives on Jan. 23 but is currently pending in the US Senate. If signed into law, the legislation would require America’s executive branch to sanction individuals or entities engaged in major transactions with the Syrian regime or non-state actors allied with Assad in sectors such as construction, energy, engineering and defense, which are all key lifelines for Syria’s government. The bill would also result in punitive measures being taken against the Central Bank of Syria if the US Treasury Department concludes that the institution is a major concern in terms of money laundering.