Syria Regulations Relief Implemented
After waiting for months for significant action on sanctions relief--specifically export control relief-- towards Syria, the Commerce Department has finally taken action. If you’ve been following this story, you’ll remember that in June of this year, President Trump issued Executive Order 14312 as part of his effort to reduce sanctions against Syria. At the time he said: “The United States is committed to supporting a Syria that is stable, unified, and at peace with itself and its neighbors.” Rather quickly after that announcement, we saw changes in our sanctions stance towards Syria in certain governmental agencies, primarily from the Treasury Department and OFAC. The release of General License 25 authorized transactions previously prohibited by the Syrian Sanctions Regulation and at the time several entities were removed from various sanctions list as well, such as the Specially Designated Nationals list.
Back in July, we at AEC took a look at where Commerce was in the process of reducing sanctions, and found they had not yet made their move yet. At the time we speculated that changes would be coming soon, and the delay was likely due to the fact that the regulations, required reports, and other considerations were still being drafted for approval. But finally, after months of waiting, we finally have BIS/EAR regulation changes in regards to Syria. The iron curtain of embargo has been pulled back an inch, and we now can catch a glimpse of where U.S. policy towards Syria is headed.
What we see from these new regulations is a combination of expected changes and enlightening direction. First of all, we have opened up the export of EAR99 items to Syria without a license: “As a result of today’s rule, U.S.-origin goods, software, and technology that have purely civilian uses (i.e., those classified under BIS’s regulations as “EAR99”), as well as consumer communications devices and certain items related to civil aviation, can generally go to Syria without an export license.” Specifically, these exports are authorized through a newly created License Exception; License Exception Syria Peace and Prospertity or SPP. As usual these exports must abide by other requirements such as requirements for licenses based on end use and user including OFAC sanctioned parties. The relaxation of regulations on EAR99 items is what I would characterize as an expected change. By definition, EAR99 items are items of less concern for with little to no dual-use applications, which is why they are so loosely regulated. By allowing the export of these items, we open up a world of trade to Syria without risking sensitive technologies.
But the export controls relief does not end there. In addition to relaxing controls on EAR99 items, the Commerce Department has also opened up the path for technologies to exported to Syria that support the rebuilding of Syria from a foundational level. Specifically, license applications to Syria will now be viewed with a presumption of approval for the exports of “items on the CCL to Syria for commercial end uses that support economic and business development in Syria or that support the Syrian people, including through the improvement or maintenance of telecommunications, water supply and sanitation, power generation, aviation, or other civil services that support peace and prosperity in Syria.” Business development, telecommunications, water supply, sanitation, power generation, these are the building blocks needed in order to begin building a more secure society. By lessening restrictions in these areas, the administration is signaling that they are serious about offering assistance to rebuild Syria into a more stable nation. But it should be made clear; while restrictions are being eased against Syria, we have not opened the floodgates on our good will. We still view Syria with a level of caution and have placed them in almost a probationary category. This seems most evident in our new Syria licensing policy where we maintain that license applications that do not meet the previously stated conditions will be reviewed on a case-by-case basis to “determine whether the items will be used in a manner consistent with U.S. national security and foreign policy interests, including to promote peace and prosperity in Syria.”
This should be of no surprise. Lessening sanctions against an embargoed country is not something done every day, especially when it comes to export controls. The fact that the administration is taking such a cautious approach is not only understandable but wise in many ways. Indeed, part of the reasoning provided by the Executive Orders that preceded these changes was that the United States was committed to supporting a Syria that was “stable, unified, and at peace with itself and its neighbors.” Should any of these factors change for the worse, it is highly likely that the United States’ support for Syria will likewise change. The future will reveal the result of the relief of export controls. Should Syria begin to prosper into a peaceful and stable state, we might well see even more relief intended for them. Should they devolve instead into a nation similar to what we are used to historically, the relieved sanctions will likely return in force.
