Eurasia Press & News
The fall of former Syrian president Bashar al-Assad’s regime came not with a grand international declaration, but with the gradual crumbling of a system that had long outlived its foundations and a flash military operation by Hayat Tahrir al-Sham (HTS). Now, the opposition, which once fought for its survival against the regime, has controversially emerged as the transitional caretaker government. While his past casts a long shadow, HTS’s leader Ahmed al-Shara is no longer a warlord. He is, for the foreseeable future, the president of the Syrian Republic.
Sanctions imposed by the United States and the European Union were, for much of the conflict, essential tools of confrontation against Assad’s brutal regime. In many ways, they achieved what they were designed to do: Economically isolate Assad, drain his capacity to wage war, and signal moral condemnation over the use of chemical weapons, barrel bombs, and starvation sieges.
But those sanctions did more than they were intended to. They distorted the Syrian economy, fueling black markets and war profiteering. They crushed the legitimate private sector while empowering regime-linked oligarchs who knew how to maneuver in shadow economies. The regime’s marginalization pushed everyday Syrians into lives of dependency and informal labor. The very people who had resisted Assad’s rule were often the ones most deeply hurt by the West’s economic measures.
That exclusion from the global economy continues even with Assad gone, and a new fragile post-war landscape takes shape. While HTS carries the burden of its militant past, banks still refuse to process payments in the country. Traders cannot legally import goods. Non-governmental organizations (NGOs) face near-impossible hurdles in transferring funds. Perhaps most crucially, Syrian entrepreneurs with the skill, ambition, and potential to rebuild the country from the bottom up are locked out of formal financial systems.
The United States and its European allies face an acute dilemma. How can one provide economic breathing space for Syrians recovering from war while entrusting HTS to lead a peaceful transition toward democracy? But ultimately, the conversation must shift. The goal of Western sanctions can no longer be regime change. That phase of the conflict is over. The new objective must be to encourage rule-based governance, strengthen institutional accountability, and support the emergence of a Syrian private sector capable of rebuilding from within.
Understanding Reality
Policymakers must first understand the landscape as it is, not as it was. HTS, for all its controversial history, is not a monolith. While some of its constituencies remain ideological, its civilian administration is professionalizing.
Despite international skepticism, the HTS is exercising its mandate. Taxes are collected, roads are repaired, schools and clinics—though under-resourced—are open. Syrians who once fled from Assad’s prisons now live under this emergent system, trying to rebuild their lives in the aftermath of catastrophe. However, they do so under the weight of a sanctions regime still calibrated to punish Damascus.
The caretaker government employs technocrats, often educated Syrians who returned from exile or emerged from the underground to take up posts in local government. Some of them were activists, teachers, and doctors. Many have no commitment or deep-seated belief in HTS’s original ideology but are instead actively claiming their right to promote inclusivity and transparency.
These technocratic layers of governance, often shielded from international engagement by the political label attached to HTS, offer a potential entry point for the US and EU. Reimagined sanctions policy could focus on creating controlled exceptions through which vetted individuals, organizations, and financial institutions could operate without breaching counter-terrorism laws.
Critically, this approach requires distinguishing between individual and sectoral sanctions. There is a broad Western consensus that individuals involved in war crimes, terrorism, or systemic corruption should continue to face personal sanctions. These measures serve justice and set international norms. However, considering the current political vacuum, sectoral sanctions, particularly those targeting finance, energy, and trade, may need to be revisited.
Continuing to restrict the country from accessing banking systems or foreign investment does not hurt the remnants of the regime. It hurts the civilians whose resilience and determination may be Syria’s best chance at recovery. Indeed, the nation’s Gross Domestic Product (GDP) has shrunk by 53 percent during the last decade, and estimates suggest an 84 percent collapse in economic activity over the same period. As a result, living standards have plummeted, with over 90 percent of Syrians now living below the poverty line, and over half the workforce is jobless. Sanctions on the finance sector stifle the growth of small and medium-sized enterprises, the return of educated diaspora Syrians, and the efforts of NGOs seeking to establish long-term programming beyond emergency aid.
Some European states are already exploring more flexible models. Positive engagement has already begun around sanctions waivers tied to specific humanitarian or reconstruction benchmarks. The United States, however, has been more cautious. Washington’s legal frameworks around terrorism designations make it extremely difficult to authorize even limited engagement with any form of administration. Nevertheless, the United States must recognize that a blanket refusal to adapt will not prevent extremism. On the contrary, it may reinforce it by deepening isolation, empowering illicit actors, and leaving local populations with no stake in peaceful recovery.
Recalibrating Sanctions
To understand what a recalibrated sanctions regime might look like, one must begin with the Syrian economy itself: fragmented, fragile, and highly informal. Years of conflict, corruption, and isolation have left Syria’s financial infrastructure in ruins. Even simple transactions such as importing medical supplies, purchasing raw materials, or sending remittances are plagued by complexity and risk. Families rely on hawala networks and informal money changers, which operate without oversight and often without transparency. This opacity is not just a logistical problem; it is a political and a security one. It allows the rise of shadow actors who profit from black-market transactions and exert quiet but corrosive influence over the country’s economic life.
In this environment, sanctions do more than isolate governments. They reshape incentives. When access to legitimate finance is blocked, the most adaptable actors are often less committed to transparency or reform.
What if that could change? The answer lies in creating controlled, conditional pathways for financial engagement—ones that reward compliance with international standards rather than the ability to evade oversight. Such a model would not be without precedent. For instance, after the United States-led invasion of Iraq, the international community worked with the new government to build financial compliance institutions from scratch. In Afghanistan, similar efforts were made—albeit with mixed results—to create banking systems that could handle foreign aid and attract private investment.
In Syria, rather than attempting to rebuild a national financial system in one sweep, policymakers can begin with targeted engagement with existing national banks by granting them conditional access to correspondent banking relationships, provided they submit to third-party auditing, implement robust anti-money laundering (AML) and counter-terrorist financing (CTF) controls, and maintain clear separation from sanctioned individuals or entities.
With the proper technical, legal, and political support, Syrian banks could quickly evolve into compliant, transparent vehicles for economic recovery. They could receive remittances from the Syrian diaspora, finance small business growth, and facilitate humanitarian payments in ways that reduce dependence on unregulated cash networks.
Regaining Autonomy
The same principle applies to the private sector more broadly. One of the tragedies of the Syrian war has been the hollowing out of the country’s entrepreneurial class. Once the lifeblood of cities like Aleppo, Damascus, and Homs, Syria’s small and medium-sized enterprises have either been destroyed, driven into exile, or absorbed by corrupt networks. Those who remained suffered from a lack of capital and the risk of being sanctioned.
Yet, it is precisely this group that holds the key to long-term stability. They provide jobs, generate tax revenue, support social cohesion, and offer an alternative to armed factions and foreign aid dependency. If given a chance, they can rebuild Syria from the ground up. However, they cannot do so under the current sanctions regime.
Creating space for private sector revival does not mean lifting all restrictions. It means introducing flexibility and nuance. For example, European or regional institutions could establish special economic licensing schemes for Syrian diaspora investors seeking to support family businesses in the country. Risk insurance and credit guarantees could be offered to entrepreneurs operating in designated zones, provided they register with vetted local chambers of commerce and adhere to basic financial disclosure standards. Donor governments could fund business incubators and vocational training centers, ensuring they remain independent of political interference. In each case, engagement would be conditional, monitored, and reversible, but it would still exist. And that alone would mark a profound shift in Syria’s post-war economic landscape.
Moving Forward
Western policymakers must be clear: engagement is not a reward. It steers a fragile, fractured post-conflict society toward rules, norms, and institutions that serve its people rather than its rulers. Sanctions must remain part of this toolkit but must evolve, just as Syria has.
If the international community is serious about fostering peace and stability in Syria after Assad, then it must resist the temptation to rely on inaction. Sanctions, for all their symbolic power, were never designed to manage a fragile post-conflict transition. For the United States and Europe, the time has come to draft a sanctions strategy that responds to the realities on the ground rather than the ghosts of the past. This does not mean abandoning accountability or engaging unquestioningly with a controversial authority like HTS. It means stepping out of the binary mindset that has long shaped Syria policy, in which sanctions were maintained as part of an elusive grand bargain.
The United States, with its more profound financial influence and global reach, has a particular responsibility to lead with nuance. Syria is no longer a primary theater of strategic interest for Washington, but the consequences of failure there—radicalization, renewed displacement, and regional destabilization—remain very real. The US can play a pivotal role in shaping the next chapter of Syria’s recovery by shifting its approach from maximum pressure to calibrated influence.
After half a century of Assad rule and over a decade of civil war, Syrians need space to breathe, build, and imagine futures not dictated by ideology or fear. This space will not be created by withdrawing international pressure but by redirecting it toward the building blocks of governance, the pillars of economic life, and the local actors who have kept communities alive even as the world turned away.
