US Treasury Eases Syria Sanctions, Allowing New Transactions and Investments

The Facts -

Significant Shift in US Sanctions: New License Authorizes Transactions with Syria

In a landmark decision on May 23, 2025, the US Department of Treasury’s Office of Foreign Assets Control (OFAC) took a major step toward lifting economic sanctions on Syria by issuing General License 25 (GL 25). This move signals a change in the US government's longstanding approach toward Syria, allowing for financial transactions that were once restricted due to the Syrian Sanctions Regulations as outlined in 31 C.F.R. part 542.

Immediate Impact

Effective immediately, GL 25 permits US individuals and businesses to engage in specified transactions with the Syrian government and certain blocked entities. This change comes after almost five decades of tough economic sanctions primarily in place since the era of former Syrian President Bashar Assad. The introduction of GL 25 marks the US's initial efforts to ease sanctions on the nation. Businesses planning to operate in Syria must closely examine the conditions and scope of this new license, ensuring compliance with changing regulatory requirements.

Historical Context and Developments

US sanctions against Syria have a long history, beginning with Syria’s involvement in Lebanon in 1979 and intensifying during the country's civil unrest. In early 2025, following the conclusion of Assad's administration, OFAC released Syria General License 24, allowing limited transactions with Syria's transitional government and the energy sector, along with personal remittances. On May 13, President Trump declared the US intent to withdraw sanctions, leading to the issuance of GL 25 ten days later.

Purpose and Provisions of GL 25

The official press release accompanying GL 25 clarifies its aim to revitalize Syria’s economy, financial systems, and infrastructure. By aligning with US foreign policy objectives, the license seeks to attract new investments vital for Syria’s reconstruction. Under this license, transactions previously barred under US sanctions—including investments, financial services, and dealings with Syrian-origin petroleum—are now permitted. It also allows dealings with Syria's new government and specifically identified blocked persons, though transactions with other blocked individuals remain restricted.

Implications for Businesses

GL 25 represents a pivotal shift in the US sanctions regime. For international financial institutions, the extensive reach of US sanctions, notably those under the Caesar Act of 2019, has posed substantial compliance challenges. Consequently, doing business with Syria has often been explicitly forbidden in financial agreements. The evolving sanctions framework introduces new compliance considerations for firms engaging in Syria or participating in reconstruction ventures. Although GL 25 significantly relaxes restrictions, additional steps, including Congressional action, are necessary to fully dismantle statutory sanctions.

Financial entities and corporations must assess their internal compliance frameworks to accommodate these new conditions. Businesses and investors interested in Syria must account for compliance measures and existing agreements that might limit their operations in Syria.

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Hunton’s national security practice remains dedicated to monitoring developments in US sanctions policy. Please reach out for more information or assistance related to these changes, effective sanctions compliance concerning Syria, or broader US sanctions inquiries.

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