Introduction:
The recent vote by the US House of Representatives to repeal the Caesar Act within the 2026 National Defense Authorization Act represents a historic turning point in the relationship between Washington and Damascus.
This move comes after a year of radical changes in the Syrian landscape, including the overthrow of Bashar al-Assad’s regime and the formation of a transitional government led by Ahmed al-Sharaa.
However, the repeal process is not absolute; rather, it is a conditional and contingent process linked to Damascus fulfilling a set of political, security, and economic requirements over a four-year period.
This paper seeks to analyze the new Syrian government’s ability to meet these requirements, with a particular focus on the economic and political dimensions.
The study is based on an analysis of the current context, initial achievements, and deep structural challenges that will determine the extent to which Syria succeeds in seizing the opportunity presented by the lifting of sanctions to transition from a besieged and isolated economy to an open economy capable of reconstruction and integration into the global financial and trade systems.
The Economic Perspective: Between Recovery Opportunities and Structural Obstacles
The lifting of the Caesar Act sanctions is contingent upon enhancing financial transparency and combating money laundering and the financing of terrorism. Fulfilling this condition represents a gateway to economic recovery, but it also reveals the magnitude of the challenges.
Opportunities and Gains of Lifting Sanctions:
The lifting of sanctions is expected to lead to immediate and medium-term positive transformations for the Syrian economy, most notably:
- Reintegration into the Global Financial System: This will allow the Syrian banking system to reconnect to the SWIFT global network, facilitating financial transfers, importing essential goods, and opening the door to external financing.
- Stimulation of Investment and Financing: The removal of the threat of secondary sanctions is expected to attract foreign investment, with initial agreements and memoranda of understanding valued at approximately $28 billion. Lifting the sanctions will also enable Syria to resume dealings with international financial institutions such as the IMF and the World Bank.
- Revival of Productive Sectors: Lifting the embargo will allow industrial and agricultural sectors access to modern technology, spare parts, and equipment, enabling the reactivation of stalled facilities.
The transport, aviation, and oil and gas sectors will also see significant improvement.
Structural Challenges and Requirements:
Despite these opportunities, the path to genuine recovery is fraught with structural challenges that complicate meeting US requirements:
- The banking system crisis and lack of transparency: The banking sector suffers from the effects of prolonged isolation, weak official financial data, and inherited governance and corruption problems.
Therefore, building a transparent financial system requires fundamental reform, including central bank independence, streamlined regulations, and the establishment of rigorous anti-corruption oversight mechanisms. - Import dependence and weak production: The economy continues to suffer from a structural trade deficit due to weak exports and heavy reliance on imports, while production capacity remains low.
- Limited impact of lifting sanctions without internal reform: Experts warn that lifting sanctions alone, without accompanying institutional reforms, may not achieve the desired results and could turn the opportunity into a “missed opportunity,” perpetuating the cycle of marginalization and corruption.
Investments require a stable legislative environment and sound physical and legal infrastructure.
Economic Opportunities and Challenges of Lifting Sanctions:
- Opportunity: Reintegration into the global financial system.
- Related Challenge: The need to reform the banking system and build financial transparency to combat money laundering (a key US requirement).
- Opportunity: Attracting foreign direct investment.
- Related Challenge: The need to modernize laws, ensure stability, and combat corruption to create an attractive environment.
- Opportunity: Revitalization of productive sectors (industry, agriculture).
- Related Challenge: Weak infrastructure and the country’s structural dependence on imports.
Political Aspects: Requirements with Sovereignty and Security Dimensions:
The political and security requirements associated with lifting the Caesar Act focus on sensitive issues that directly affect Syrian sovereignty and internal affairs, requiring the new government to achieve complex balances.
Key Requirements and Implementation Capacity Assessment:
- Combating Terrorism and Removing Foreign Fighters: Syria is required to continue the fight against ISIS and remove foreign fighters from sensitive positions. The government has demonstrated both will and management in this regard through joint security operations with the United States against ISIS cells and internal operations against remnants of the former regime involved in drug trafficking. However, the issue of “foreign fighters,” particularly those linked to former allies, remains a complex one requiring a long-term solution.
- Guaranteeing Minority Rights and Representation: The law stipulates respect for the rights of ethnic and religious groups and guarantees their fair representation in government institutions. Initial steps in this direction were taken through the recent parliamentary elections, which saw the entry of Kurdish, Turkmen, and religious minority representatives into parliament. However, translating this formal representation into genuine power-sharing and effective protection of rights remains a significant challenge.
- Implementing internal political agreements (the March 10 agreement with the SDF): Progress in implementing the agreement, under which the Syrian Democratic Forces (SDF) recognized the territorial integrity of Syria and the current government, is a prerequisite. The biggest obstacle remains the lack of a clear mechanism for integrating the SDF into the Syrian army, which renders the agreement fragile and susceptible to collapse with shifting regional balances of power.
- Refraining from unilateral military operations against neighboring countries (including Israel): This condition imposes restrictions on Syria’s military sovereignty and indirectly assigns it a role in protecting Israel’s security, despite ongoing Israeli attacks on Syrian territory. This condition also limits the freedom of movement of the Syrian military and reflects American political dominance over regional security matters.
The Nature of the Process and the Monitoring Mechanism:
The complexity of this process lies in its being a “conditional suspension,” not a complete and irreversible lifting of sanctions.
By law, the White House must submit periodic reports every 180 days for four years, while retaining the right to reimpose sanctions if it deems that Syria has failed to meet the conditions during two consecutive reporting periods.
This mechanism makes investment and economic recovery contingent on continued political progress, creating an atmosphere of uncertainty that may deter some investors.
Conclusion and Recommendations:
Evidence suggests that the new Syrian government has made significant initial progress on both the economic and political fronts, qualifying it to begin the process of lifting sanctions.
It has restored some security stability in major cities, improved basic services such as electricity, and opened channels of communication with the international community.
Furthermore, the political will of the United States, under the Trump administration, to support this process appears evident.
However, the structural challenges remain significant, and the prospects for economic success hinge on fundamental institutional reforms. The success of the political process depends on the regime’s ability to integrate the various components of Syrian society and establish its control over the entire national territory, particularly through resolving the issue of the Syrian Democratic Forces (SDF).
Therefore, we believe that the conditional and phased nature of lifting sanctions makes them a continuous tool of pressure in the hands of Washington.
Based on this analysis, the Research and Studies Department of the Political Bureau of the Syrian Future Movement offers the following recommendations:
- For the Syrian government: Treat the lifting of sanctions as a “pressure opportunity” for internal reform. Direct efforts should be focused on achievable technical reforms that align with US conditions and the national interest, such as accelerating financial sector reform and enacting anti-corruption and anti-money laundering laws.
- For the international community and investors: Given that Syrian recovery is a long-term process, support should be phased and linked to tangible achievements on the ground in the areas of governance and transparency, while acknowledging the risks stemming from the fragility of the political process and the periodic monitoring mechanism.
- For researchers, observers, and civil society: Monitoring performance indicators in periodic US reports, which will be an important public document for assessing progress, and tracking the volume and flow of foreign direct investment will be a practical measure of the international economic community’s confidence in the stability of this trajectory.
Ultimately, the repeal of the Caesar Act opens a window of hope for the Syrian people to escape the burden of collective sanctions, but it presents the new government with a difficult test in reconciling the demands of economic openness and reconstruction on the one hand, and the necessities of political reform and building institutions characterized by integrity and inclusivity on the other.
