Introduction
Following the fall of the Assad regime on December 8, 2024, European powers began to reassess their sanctions policies concerning Syria. They issued official statements and conducted visits affirming support for a peaceful transitional process, while emphasising and prioritising human rights and civil liberties. In the wake of Assad’s fall, US and Western sanctions on Syria became a central to political discussions across Europe and the United States, and played a hand in shaping the immediate direction of Syrian foreign policy.
These sanctions continue to help define the contours of Syria’s crucial next phase. Maintaining them would likely detain Syria in a state of economic and political instability, thwarting early recovery efforts and delaying the onset of reconstruction. The issue of European sanctions is especially complex, given the differing positions among European states regarding the new Syrian government. This divergence is expected to influence both the pace of repealing sanctions and the nature of any future European support for Syria.
This paper examines European stances in the period shortly before Assad’s fall and analyzes how countries across the continent responded to the regime’s collapse and the rise of the new government, particularly through sanctions and economic support. It explores the impact of lifting European sanctions on Syria – both current and anticipated – and outlines possible future scenarios based on the varying approaches of European countries towards the new Syrian leadership, in coordination with existing US sanctions.
I. Europe and the Assad Regime Prior to Its Fall
At the beginning of 2024, the European position remained firmly opposed to normalising relations with the Assad regime, adhering to the “three no’s”. The three no’s were: no lifting of sanctions, no political normalisation, and no reconstruction – unless a political transition was achieved in accordance with UN Security Council Resolution 2254.[1] On the thirteenth anniversary of the Syrian revolution, France, Germany, and the United Kingdom issued a joint statement condemning the continued bombing of civilians and calling for its immediate cessation.[2] They also denounced the Assad regime’s involvement in the Captagon trade, which had become a major source of funding for its army, militias, and repressive surveillance apparatus. However, by the third quarter of 2024, a limited divergence between some European countries began to emerge. Italy re-engaged politically with the Assad regime by reopening its embassy in Damascus in September 2024. This move was justified as part of the Italian government’s “Mattei Plan,” aimed at containing Russian influence in Syria and addressing irregular migration to Europe.[3]
An examination of European positions on the Assad regime reveals that the first signs of a shift toward reestablishing political relations appeared in July 2024 with the launch of the “Non-Paper Document” initiative. This proposal, put forward by a group of EU member states, namely Austria, Croatia, Cyprus, the Czech Republic, Greece, Italy, Slovakia, and Slovenia, was submitted to the EU High Representative for Foreign Affairs and Security Policy, Josep Borrell. It called for a reassessment of the EU’s approach to Syria and included several key recommendations, most notably the establishment of diplomatic relations with the Assad regime through the appointment of a European Special Envoy for Syria.
Operation Deterrence of Aggression struck at a relatively favourable moment for Assad, coinciding with growing efforts to improve relations between his regime and certain European countries, including the proposed appointment of a European envoy to Damascus. Many European nations were facing economic strain due to ongoing financial support for Ukraine in its war with Russia, which they view as a critical front line against Russian aggression. Meanwhile, resolving the refugee crisis had become an urgent priority for Europe – even if it meant walking back previous statements and sanctions against Assad and initiating previously unpalatable diplomatic engagement with his regime.
II. The Future of European Sanctions post-Assad
European states generally welcomed Assad’s fall, and countries including Germany, France, Spain, and the United Kingdom spoke out to emphasise the importance of a peaceful transition process and the rejection of extremism. Italy, however, adopted a more cautious stance. In a speech before the Italian parliament, Prime Minister Giorgia Meloni pledged that full normalisation with Syria would not occur until it proved its ability to protect and include minority groups in the life of the country.[4]
Despite the divergence between European countries facing the new government in Damascus, the EU has taken new steps to suspend, mitigate, or cancel prior sanctions against Syria. These actions, either initiated by the EU or the United Kingdom, represent a significant shift in policy. The following categories outline these steps, alongside an explanation of their potential impact on the situation in Syria, particularly in light of ongoing US sanctions that show little immediate sign of relenting.
Sanctions already lifted or eased by the EU involve the following sectors:
Transport and Energy: On February 24, 2025, the European Union suspended sanctions across Syria’s energy sector, including oil, gas, electricity, and transportation. However, despite the suspension of EU sanctions, US sanction regimes continue to impede the recovery of this vital sector. A temporary US exemption issued in January 2025 covering the energy sector for a period of six months has proven largely ineffective. The brief period of this exemption cannot provide sufficient time for recovery, nor does it provide incentive for companies or countries to invest in such a technically complex sector. When comparing the European sanctions relief with the temporary US exemption for the energy and transport sectors,[5] as shown in Table 1, it becomes clear that the easing of European sanctions will remain hamstrung unless the US shifts from temporary exemptions to fully lifting sanctions on key economic sectors and state institutions.
Table 1
| Energy Sector | ||
| Item | The Position of European Countries Following the Lifting of Sanctions | The Position of the United States Following the Temporary Exemption |
| Oil imports and exports | Freely allowed | Imports permitted only to meet energy needs |
| Import of oil and energy equipment | Totally permitted | Allowed only on humanitarian terms not specified in detail |
| Dealing with the Syrian Ministry of Oil | Totally permitted to initiate new government contracts. | Limited to infrastructure support only |
| Use of the Central Bank (in relation to oil) | Fully lifted | Only partially permitted on humanitarian grounds |
| Foreign investments in the energy sector | Generally permitted | Only non-US companies permitted |
| Transportation Sector | ||
| Item | The Position of European Countries Following the Lifting of Sanctions | The Position of the United States Following the Temporary Exemption |
| Importing aircraft spare parts | Totally permitted | Conditionally permitted |
| Foreign investment in the transportation sector | Generally permitted | Only non-US companies permitted |
The temporary US exemption does not provide a genuine operational space for Syria’s energy and transportation sectors, even with the lifting of European sanctions. These sectors require the establishment of infrastructure that cannot be completed in a short period. As a result, Syrian companies are unable to begin operations due to the uncertainty surrounding the renewal of the exemption or the potential removal of sanctions from these sectors. Therefore, without the complete lifting of US sanctions, there will be no meaningful technical reform or real reactivation of the energy and oil sectors.
Financial Services: On February 24, 2025, the European Union removed several Syrian economic entities from its financial sanctions list, including the Industrial Bank, the Popular Credit Bank, the Agricultural Cooperative Bank, and Syrian Airlines. Despite ongoing US sanctions, the European move has created the following opportunities:
- Syrian Airlines: In theory, removing Syrian Airlines from the sanctions list would allow it to land at European airports for both civilian and commercial flights. As shown in the following figure, this would also enable Syrian Airlines to engage in various transactions with European companies in the civil and commercial aviation sectors.
| Permitted transactions for Syrian Airlines after the lifting of European sanctions | |
| Purchasing new aircraft spare parts from European companies | Concluding maintenance and insurance contracts with European companies |
| Leasing aircraft from European countries to modernise Syria’s air fleet | Shipping medical and food supplies directly to and from Syria via Syrian Airlines |
However, Syrian Airlines faces an internal challenge; it currently owns only two aircraft which do not meet the landing standards required at European airports. As a result, even with the lifting of sanctions, it remains difficult for Syrian Airlines to operate direct flights between Syria and European countries. This issue is more technical than political, however, and is unrelated to the sanctions themselves.[6]
- Banks Removed from Financial Sanctions Lists: This European decision will help partially reintegrate these banks into the global financial system. In theory, these banks can implement several measures, as shown in the following figure.
| Permitted transactions for banks removed from European sanctions lists | ||||
| 1 | 2 | 3 | 4 | 5 |
| Opening accounts in euros exclusively in European banks | Making euro money transfers via SWIFT in Europe | Receiving payments and transfers from Syrians in Europe or European companies | Syrian traders and importers may use local banks that have been removed from sanctions lists to process their payments | Officially transferring money to and from Europe through these banks |
However, the SWIFT system presents a practical challenge for these banks, even if they are removed from the European sanctions lists,[7] due to ongoing US sanctions. SWIFT is a critical component of the global financial transfer system, and despite being headquartered in Belgium, the US exerts significant influence over the system. As a result, banks removed from European financial sanctions lists will still be subject to US sanctions, and international banks will likely avoid working with them to prevent facing US sanctions themselves (the chilling effect).
SWIFT may still refuse to allow Syrian banks to use its system under US pressure, as it has with certain Iranian banks. International banks and companies typically avoid dealing with US-sanctioned entities to steer clear of any potential conflict with the US Treasury Department (OFAC). However, some limited transactions can still be conducted by US-sanctioned banks and non-EU-sanctioned banks, as shown in the following table:
| Example | Able to use SWIFT? |
| A bank that has been removed from European sanctions but remains under US sanctions | Partially/ Under strict conditions |
| Humanitarian transfers in non-dollar currencies | Technically possible |
| Private transfers in US dollars | Totally forbidden |
| Dealing with major European banks | Often reluctant |
| Small banks in Eastern Europe that do not deal in dollars | May accept, with conditions varying from one bank to another |
As a practical example, if a company in Syria wants to purchase agricultural equipment from a European country, say Germany, the transaction would typically involve the following general:
Example: A Syrian company inside Syria wishing to purchase agricultural equipment from a German company. The steps to be followed to conclude the deal are:
- Commercial agreement: Signing a contract with a German company to purchase agricultural equipment. Payment is made exclusively in euros.
- Contacting a European intermediary bank. Slovenia, Cyprus and Austria are often considered leaders in intermediary banks for such transactions.
- The Syrian company opens an account in the Agricultural Cooperative Bank, with the transaction value or its equivalent calculated in Syrian pounds.
The intermediary bank does the following:
- Ensures that the reason for the transaction does not have any dual civilian and military use.
- Ensures that the Syrian bank that will transfer the funds is not on the European sanctions list.
- Confirms the final destination of the equipment coming from Germany.
Funds are transferred from the Syrian bank to the European intermediary bank.
Trade: The European Union introduced an exception allowing the export of “luxury” goods to Syria, while emphasizing the implementation of a monitoring mechanism to ensure that the suspension of sanctions is not used to violate human rights.[8]
Sanctions Lifted or Eased by the United Kingdom:
After the United Kingdom’s exit from the European Union in 2017, it began managing its own international sanctions independently – though often in parallel with EU measures. On March 6, 2025, the British government announced the lifting of asset freezes on the Central Bank of Syria, the Commercial Bank of Syria, and five other key banks. It also lifted sanctions on the Baniyas and Homs refineries, nine additional oil and energy-related institutions, the Cotton Marketing Organization, the General Organization for Tobacco, and Syrian Airlines. However, as with the EU measures, these British sanctions adjustments will have little real impact as long as US sanctions remain in place.
III. Future Scenarios for European and American Sanctions
While US sanctions policies typically hinge on reaching comprehensive agreements with the sanctioned country, reserving the full removal of sanctions as a final diplomatic step, European policy tends to favour a gradual easing of sanctions, aligned with incremental improvements in relations. This divergence in approach gives rise to the following potential scenarios:
- Complete Lifting of European and American Sanctions:
This scenario, considered the most favourable for the Syrian people, will only materialise if the transitional Syrian government successfully leads a comprehensive political process and gains widespread international recognition. This depends on the government’s commitment to domestic political and constitutional reforms, the development of a consensus framework with the Syrian Democratic Forces (SDF) to guide implementation, and its external efforts to fully neutralise the activities of Iran and other groups that threaten European and American security.
Additionally, the scenario would involve reaching an understanding with the United States regarding the ongoing Israeli incursions into southern Syria, potentially through an agreement prohibiting the presence of heavy weapons in the region. The process would begin with the removal of official Syrian institutions from the US Specially Designated Nationals (SDN) sanctions list.[9] This path would likely be accompanied by Western economic overtures, including joint European-American initiatives including infrastructure development programmes and the full reintegration of the Syrian banking sector into the global financial system.
- Lifting European Sanctions While US Sanctions Remain in Place:
This scenario highlights the differing positions of the United States and European countries over Syria, their differing sanction strategies into sharp relief. While European countries have adopted a gradual approach that emphasizes political engagement as a pathway to change, the United States continues to use sanctions as a means to apply pressure until all of its – still vaguely defined – conditions are met. In this scenario, the European Union will lift most or all of its economic and financial sanctions on Syria and resume trade relations, while Washington maintains its sanctions on Damascus, particularly those targeting the banking sector and dollar transactions. As a result, the Syrian economy would remain constrained, limiting the effectiveness of the European measures. Although Syria could experience some relief from the easing of European sanctions, US restrictions would continue to hinder any meaningful early recovery or reconstruction efforts.
- Continued European and American Sanctions:
In this scenario, both European and American sanctions remain in place, reflecting ongoing internal political fragmentation in Syria, the failure to establish a functional Syrian army, and continued armed factionalism, all of which contribute to heightened security instability. France, having differed from other European nations in March 2025 regarding the lifting of sanctions, may seize upon these developments, especially following its call for sanctions in response to events on the Syrian coast.[10] In the face of such instability, the new transitional government could lose European support. Some German officials have indicated that their decisions could be reversed at any time,[11] with the European Union potentially reverting to sanctions as leverage for political change. This scenario would result in Syria’s continued political and economic isolation, driving the country deeper into stagnation and economic collapse, while preventing any meaningful early recovery or reconstruction efforts.
Conclusion
The Syrian transitional government must pursue two key but distinct paths. The first is internal; focusing on expanding political participation and restructuring the army and security forces. Doing so will help address factionalism and improve discipline within the ranks, especially given the ongoing attempts by remnants of the Assad regime to destabilise the country’s security.
The second is external; working to understand and align European and American demands with Syria’s sovereignty and national interests, in order to develop a national strategy that promotes positive relations with neighbouring and Western countries.
Any setbacks in foreign relations or internal failures to cultivate political inclusion in the near future will likely give sceptical Western countries greater leverage when sanctions relief is being debated, increasing their influence. And all the while, official US voices are expected to continue opposing the removal of sanctions on the current government in Damascus.
[1] Syria: Statement on behalf of High Representative/Vice-President Josep Borrell at the EP debate on the situation in the country, European Union, 27 FRB 2024 https://bit.ly/4iENUZu
[2] Syria – 13th anniversary of the Syrian uprising – Joint Statement by the Foreign Ministries of France, Germany, the United Kingdom and the United States of America (15 March 2024), French Ministry of Foreign Affairs, 15 March 2024 https://bit.ly/41UvFbi
[3] Why Italy reopened its embassy in Syria and why the rest of the west should follow, Institute of New EUROPE, 23 SEP 2024 https://bit.ly/422eRzc
[4] Italy ready to engage with Syria after fall of Assad regime, says premier, Anadolu Agency, 17 DEC 2024 https://bit.ly/4kTUtZv
[5] Zabad, Yaman, “US Sanctions on Syria: Between the Heavy Legacy and Future Scenarios.” Harmoon Center for Contemporary Studies, February 5, 2025. Accessed April 5, 2025. https://bit.ly/4hKFej9.
[6] Interview with the director of the Syrian Airlines office in Damascus, March 28, 2025.
[7] SWIFT, which stands for The Society for Worldwide Interbank Financial Telecommunications, is an international network for transferring money between banks worldwide. While the United States does not control SWIFT, it exerts significant influence over it.
[8] Syria: EU suspends restrictive measures on key economic sectors, European Council, 24 FEB 2024 https://bit.ly/4isD2hb
[9] SDN stands for the Specially Designated Nationals and Blocked Persons List. It is a list of individuals and entities sanctioned by the United States, managed by the Department of the Treasury’s Office of Foreign Assets Control (OFAC). The SDN list functions as a U.S. blacklist, targeting individuals and entities identified as terrorists, as well as officials and beneficiaries of authoritarian regimes.
[10] “French Foreign Minister: ‘I proposed sanctions on those involved in attacks on Alawites in Syria,’” Asharq Al-Awsat, March 17, 2025, viewed March 24, 2025, link: https://bit.ly/4iYyeQx
[11] From a session held by the Harmoon Center for Studies in collaboration with the German Orient Institute, attended by German officials on March 12, 2025.
