In the wake of the Trump administration’s sweeping rollback of sanctions on Syria, businesses face a complex landscape as they contemplate reentering the Syrian market. In this episode of "An Ounce of Prevention," host Andrew Good sits down with Washington, D.C. partner Eytan Fisch and London-based counsel Jonathan Benson to break down a wealth of topics, including the parallel easing of sanctions by the European Union and the U.K., which activities remain off-limits and the practical implications for companies considering new opportunities. Tune in for insights on navigating this evolving regulatory environment.
Voiceover (00:02):
Welcome to an Ounce of Prevention, a podcast from Skadden's White Collar Defense and Investigations Group that explores critical issues shaping the landscape of corporate compliance and enforcement around the globe. Join us for in-depth analysis and practical insights to help you navigate the complexities of corporate accountability.
Andrew Good (00:27):
Hello, and welcome to the third episode of Ounce of Prevention, a podcast series presented by the White Collar Defense and Investigations team at Skadden. This podcast brings you regular analysis of key compliance and enforcement trends, important industry news and developments, as well as insights from the leading practitioners in the field. My name is Andrew Good, and I'm a partner here in the Skadden London team. I specialize in representing clients in complex governmental and regulatory investigations into alleged corruption and misconduct, including bribery, false accounting, fraud, and money laundering. The topic for today's episode is the Trump administration's decision to revoke nearly all economic sanctions on Syria and the equivalent relaxation of sanctions by the EU and the UK. We'll be discussing what sanctions remain in place, what this means for companies and what they need to consider before stepping back into the Syrian market.
(01:30):
To walk through these developments, I'm pleased to introduce you today to my colleagues Eytan Fish and Jonathan Benson. Eytan is a partner in our DC office who advises clients on regulatory and enforcement matters with a focus on economic sanctions, anti-money laundering, and related financial crime and national security matters. Jonathan is a council in our team here in London who has extensive experience counseling companies on a range of financial crime and national security issues, and who prior to joining Skadden worked as a senior lawyer within the UK government. Eytan, Jonathan, welcome to the Ounce of Prevention Podcast. Eytan, to start us off, can you give us an overview of the recent US executive order providing for the revocation of Syria sanctions EO 14312? What does it do?
Eytan Fisch (02:22):
Yeah, sure. Thanks, Andrew. So the order which was issued on June 30th is really a landmark shift in US sanctions policy towards Syria. What it did is effective July 1st, the order terminated six of the key executive orders that had been underpinning the Syria sanctions program and consequently delisted, meaning removed from the sanctions list, the OFAC sanctions list more than 500 individuals and entities that had been sanctioned under those executive orders. The Office of Foreign Assets Control, or OFAC, which is office within the Treasury Department and is the one responsible for implementing and enforcing US sanctions on the civil side, announced that it would also rescind the Syria sanctions regulations in light of the executive order. Those regulations really contain the core prohibitions and restrictions on the ability of US persons to engage with Syria. Things like investing in Syria, the export of services to Syria, or engaging in transactions involving Syrian origin oil or other energy products.
(03:30):
OFAC had previously issued a broad general license, which is a carve out to the regulations on May 23rd, it was called General License 25, that authorized most activities that had been otherwise prohibited by the Syria sanctions regulations. But rescinding the regulations themselves is really a much more permanent and significant actions since the earlier general license had several carve outs and it could always have been revoked. This is really as opposed to an exception to the regulations, which was the general license, it's the removal of the regulations in their entirety. In effect, what the US has done is really replaced this comprehensive Syria sanctions program, which prohibited most commercial activity involving Syria with a new narrowly targeted program, which is called the Promoting Accountability for Assad and Regional Stabilization Sanctions, or PAARSS, because everything in Washington needs an acronym. And so we have this new, much more narrowly tailored targeted sanctions program that is in place.
(04:37):
The president's executive order went even further and went beyond what we call kind of primary sanctions, which are those sanctions that require a US nexus or touch point. The order also directed the Secretary of State to continue to review whether it's appropriate to waive so-called secondary sanctions provisions under a statute called the Caesar Act.
(04:59):
Those provisions authorized the president to sanction foreign persons that engaged in certain activities involving the government of Syria or other sanctioned persons. The Secretary of State had issued a waiver, 180 day waiver of the Caesar Act sanctions when OFAC issued General License 25. They did this at the same time, and we expect that waiver to be renewed in light of the directive in the June 30th executive order. The executive order did more, it also waived the requirements to impose certain export controls related to Syria and directed the Secretary of State to re-examine terrorism related designations of the governing group in Syria, HTS, and its leader President al-Sharaa, as well as Syria's designation as a state sponsor of terrorism. So just to sum up, the order is really far-reaching and is clearly designed to relax virtually all of the restrictions the United States previously maintained on activities relating to Syria.
Andrew Good (06:00):
Got it. That's very helpful background. I'm wondering if you could spend a little bit on the scope of the new PAARSS program, which is out there, and who remains subjects to US sanctions at this point in Syria?
Eytan Fisch (06:12):
Yeah, so it really is a targeted, a limited sanctions program that does two things. First, it's really intended to allow Syria to engage with the global economy while maintaining sanctions on the most egregious actors. That really includes, or it's focused on former President Bashar al-Assad, his family, their associates, as well as certain Syria-related persons that were designated under the Iran Counterterrorism and other sanctions programs. So it keeps sanctions on a limited set of individuals and entities while allowing Syria more broadly to reengage with the world.
Andrew Good (06:53):
Got it. That's helpful. And how does the executive order in this shift impact US export controls on Syria? Have there been any changes there yet?
Eytan Fisch (07:02):
Yeah, so the United States has historically had pretty comprehensive export controls with respect to Syria that mirrored the OFAC Syria-related sanctions. These export controls impose a licensing requirement for the exportation or re-exportation to Syria of all items subject to the export administration regulations other than certain food and medicine, and there's a general policy of denial for license applications. The June 30th executive order revoked an earlier executive order that prohibited the exportation of certain goods to Syria and waived the requirement to impose export controls on Syria under certain legislation. There's a final rule in the works from the Commerce Department's Bureau of Industry and Security that's designed to relax Syria export controls consistent with what was called for in the executive order. That final rule was submitted to the Office of Management and Budget for the inter-agency review process on July 8th. So our expectation is that that final rule will likely be issued in the next 30 to 60 days.
Andrew Good (08:09):
And you also mentioned that the executive order directed the Secretary of State to take a look at certain terrorism related designations for HTS and others. Could you explain that review in a little bit more detail?
Eytan Fisch (08:23):
Sure. So, yeah, that's exactly right. The executive order directs the Secretary of State to re-examine the earlier designations of HTS as a foreign terrorist organization, both HTS and President al-Sharaa as specially designated global terrorists and Syria itself as a state sponsor of terrorism. So just as a brief reminder for the audience, HTS is the militant group that played a significant role in toppling the Assad regime and whose members now occupy a significant of high-ranking positions within the Syrian government, including the presidency. On July 7th, Secretary of State, Marco Rubio, announced that the State Department had rescinded HTS's designation, though no action has yet been taken with respect to President al-Sharaa or the state sponsor of terrorism designation. Our expectation is that those remaining designations will be reversed in short order, but they haven't happened yet.
Andrew Good (09:21):
And Jonathan, shifting from the US to the European perspective and the UK perspective, how does the lifting of sanctions on Syria by the United States align with similar actions that have been taken by the EU and the UK over the last couple of months?
Jonathan Benson (09:38):
Thanks, Andrew. Yeah, it's a similar picture from a UK and EU perspective with both the EU and the UK responding to the same geopolitical realities as the US We signaled on this side of the Atlantic earlier this year that there would be a willingness to relax sanctions on Syria, and the EU gave effect to that pledge and lifted the majority of its restrictive measures against Syria in May just a few weeks ago, following a slight loosening of the sanctions earlier in the year. Similarly, the UK delisted a significant number of Syrian individuals and entities in March, 2025 before engaging in broader sanctions relief in late April. Now, as with the US similar picture in terms of the president and HTS, so HTS remains designated and subject to an asset freeze in both the UK and the EU and Syrian President al-Sharaa remains an asset freeze target. HTS is a prescribed organization under the UK's counterterrorism legislation in addition to the specific sanctions related restrictions.
Now, the UK government has very clearly signaled that HTS terrorist prescription doesn't stop it from talking to HTS regarding political transition. And the UK's Foreign Commonwealth and Development office has also been clear in saying that although some members of the new Syrian government have a historic association with HTS, the two entities are distinct and that the UK is lifting sanctions to ensure that the Syrian government has the resources and access necessary to provide economic and social security assurances to the Syrian people and not in support of HTS. And I've quoted there from the Foreign Commonwealth and Development Office in that regard. So the UK is making a clear distinction between the government of Syria and HTS, similar music of course, coming out of the European Union. And what this means is that in most contexts, the continued targeting of HTS and President al-Sharaa by the EU and the UK with asset freezing sanctions won't have an impact on commercial actors looking to re-enter the Syrian market.
Andrew Good (11:57):
Thanks for that overview. Are there activities or transactions that remain prohibited despite the lifting of these sanctions by the EU and UK? And really specifically, what types of risks should companies be aware of from a UK and an EU perspective as they're considering re-engagement with Syria?
Jonathan Benson (12:19):
Yeah, so again, a similar picture to the US picture in terms of the fact that most of the sanctions have gone, but not all of them. So the EU's sectoral sanctions on Syria, so that's trade and finance-related measures are now targeted on certain fundamentally security-related issues. So the remaining sanctions primarily focus on military, internal repression, internet or telephone monitoring or interception items, as well as cultural property goods. The remaining asset-freeze targets are predominantly persons connected to the Assad regime, chemical weapons programs, human rights abuses, and the illicit drugs trade. Similarly, in the UK, hundreds of individuals and dozens of entities remain directly targeted with EU asset-freezing sanctions and other trade financial restrictions remain in effect. As with EU, the remaining UK trade sanctions focus on items connected to chemical and biological weapons, military items, communication interception, monitoring items, internal repression items, as well as certain luxury goods.
(13:31):
There are also certain specific UK restrictions associated with the supply and delivery of gold, precious metals or diamonds to or from the governing authority of Syria. Associated services prohibitions attach of course to all of these trade-related prohibitions. The UK also continues to maintain restrictions associated with public bonds and public bonds guaranteed by the Assad regime. There have been no indications that the EU or the UK will lift these remaining restrictions in the near term. It's therefore key that companies continue to conduct careful due diligence when considering what business to do in Syria given the remaining EU, UK, and other international sanctions targeting that country.
Andrew Good (14:19):
Thanks, Jonathan. So to wrap up our discussion on Syria, while certain actions involving Syria may now be permitted under US, EU and UK sanctions regimes, it's important for companies considering re-entering the Syrian market to be mindful of any representations that they may have to make to third parties like insurers or banks, stating that they would not engage in business involving Syria. Companies should ensure they're not violating any contractual commitments to these third parties, even if the Syria sanctioned landscape has shifted. It's also worth emphasizing that despite the recent moves to lift some sanctions on Syria, companies should remain vigilant and continue to monitor any changes to the sanctioned regime, particularly if the political situation in Syria deteriorates. Outside of the recent changes to sanctions, what does the current enforcement look like in the US, UK and EU?
Eytan Fisch (15:20):
Yeah, I'm happy to take that from the US side. I think it's fair to say that the sanctions enforcement under the Trump administration is still taking shape. OFAC has announced several big ticket enforcement actions in the first half of the year, although those actions would have resulted from investigations that were initiated during the Biden administration or even during the first Trump administration. OFAC was fairly quiet overall during the first five months of the new Trump administration, but we've now seen five enforcement actions announced since mid-June. Looking forward, the current administration has made clear that it intends to focus enforcement efforts on certain domestic priorities, namely immigration and drug and human trafficking, and on key US national security concerns, most notably cartels, transnational criminal organizations and foreign terrorist organizations. So there's clearly more to come, but the focus may be a little bit different from what we've seen in recent years.
Jonathan Benson (16:23):
And from a UK and EU perspective, both jurisdictions have continued to expand their sanctions regimes, particularly in relation to Russia over the first half of this year. Obviously, that is in distinction to the position in the US, and both jurisdictions are making efforts to increase the levels of enforcement and also to make it easier to enforce breaches of sanctions. Just to take a couple of examples from the UK, in May at the UK's Office of Financial Sanctions Implementation, better known as OFSI, published its first-ever monetary penalty for an information-related offense linked to the UK's financial sanctions regulations.
(17:06):
And in April there was another first with two individuals being sentenced to terms of imprisonment for breaches of Russia-linked financial sanctions. In terms of the EU, many EU member states are busy working to ensure that they comply with the new EU Harmonization Directive, which sets out certain common definitions of criminal offenses in the sanctions space and penalties for breaches of EU sanctions law. There are a very significant number of investigations going on across the member states in relation to sanctions violations or alleged sanctions violations, I should probably say. And clearly some of those will come to fruition in the near to medium term with more investigations expected to be opened in the years ahead. So there is a clear trend emerging in both the EU and the UK. Sanctions enforcement is on the rise, and companies will clearly need to calibrate their conduct and reassess their business risk in the light of that fact.
Andrew Good (18:14):
All right, thanks Eytan, and thanks Jonathan for joining. Before we wrap up, I wanted to touch on the broader picture with respect to just generally global coordination on sanctions policy. Eytan, has the Trump administration's approach to sanctions changed the dynamic of US coordination on sanctions policy with the EU and the UK?
Eytan Fisch (18:35):
I think it has and it hasn't, Andrew. In some respects, the Trump administration appears to be taking a more unilateral approach. For example, that seems to be evident in the US decision not to join the EU, and the UK's coordinated Russia actions, their sanctions package in May. After the G7 Summit in Canada, president Trump said he was content to let Europe do it first when it came to additional sanctions against Russia. But just this week, following a lack of movement on the Russia-Ukraine negotiations, president Trump announced that the US would resume supplying weapons to Ukraine and threatened to impose a hundred percent tariff on Russian imports as well as so-called secondary tariffs if Russia and Ukraine could not arrive at a peace deal within 50 days. So yes, we're seeing some divergence, but it also is a bit of a moving target. That said, there are still areas of clear coordination between the US, UK, and EU.
(19:34):
Syria is an example where all three jurisdictions have really aligned, at least with respect to the fact that sanctions should be relaxed, though it's not clear how much actual coordination there was from a policy or process standpoint. The jurisdictions have also remained aligned operationally, at least at present. For example, the OFAC-OFSI enhanced partnership is ongoing. The US continues to maintain a close working relationship with the EU and several member state authorities. And the US and Switzerland, for example, also announced in May of this year a memorandum of understanding between OFAC and SECO. That's the Swiss State Secretariat for Economic Affairs, which is designed to improve information sharing and coordination and other aspects of sanctions implementation and enforcement. This SECO-OFAC MOU is similar to the MOU that, for example, OFAC and OFSI signed in October of 2024. So again, there appear to be some changes, but there is still operational alignment in many respects.
Andrew Good (20:37):
Thanks, Eytan. Clearly there's a lot to watch in this space going forward. Eytan and Jonathan, thanks again for joining us and breaking down this exciting new set of developments. That's the end of our episode today for the Ounce Prevention Podcast. We hope you can join us next time, but in the meantime, stay vigilant, stay compliant, and join us when we are back online with our fourth episode. Till then, goodbye.
Voiceover (21:08):
Thank you for joining us for today's episode of an Ounce of Prevention. If you like what you're hearing, be sure to subscribe in your favorite podcast app so you don't miss any future conversations. Additional information about Skadden can be found at Skadden.com.
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