United States Terminates Syria Sanctions Program and Initiates Other Relief

On June 30, 2025, President Trump issued an Executive Order (EO) titled “Providing for the Revocation of Syria Sanctions.” Building on actions the U.S. Department of the Treasury and U.S. Department of State took in May (which we discussed in our June 2025 Advisory), the new EO goes to even greater lengths to afford Syria relief from economically punishing sanctions. Among other things, the EO terminates the Syria sanctions program for nearly all actors in the country, permits the easing of certain export controls, and directs the Secretary of State to revisit certain designations with significant legal and practical consequences. The Secretary of State subsequently canceled the Foreign Terrorist Organization (FTO) designation of Hay’at Tahrir al-Sham (HTS), the principal armed group led by now-interim President Ahmed al-Sharaa, which toppled the Bashar al-Assad regime. This U.S. policy shift comes as a result of the Trump administration’s conclusion that lifting in large part U.S. sanctions would help to stabilize Syria after a brutal 13-year civil war.

Background

The complex web of U.S. sanctions against Syria dates back to 1979. Applicable sanctions ranged from targeting the country as a whole (such as prohibitions on the provision of services, arms embargoes, and restrictions on most dual-use good exports), to targeting the government and its institutions and entities (such as restrictions on transacting with the Syrian Central Bank), whereas others targeted particular persons (such as former President Assad and key affiliates on the basis of the Assad regime’s human rights abuses, acts of terrorism, and political repression). The historical sanctions on Syria, implemented by the Syrian Sanctions Regulations (SySR), 31 C.F.R. Part 542, were imposed pursuant to a variety of executive orders, legislation from Congress, or a combination of both. As a result of the variety of sanctions involving Syria, whether and how any particular sanction may be rolled back depends on the authority under which that sanction was imposed.

Relief Measures

The EO institutes various relief measures for Syria. First, it effectively terminates the SySR, as of July 1, 2025, by terminating the national emergency and revoking various EOs that formed the basis of the SySR. Concurrent with termination of the program, the Office of Foreign Assets Control (OFAC) removed 518 individuals and entities from the Specially Designated Nationals (SDN) List who had been sanctioned under the SySR.¹ Accordingly, all property and interests in property of such individuals and entities are now unblocked. Although the termination of the SySR renders much of General License (GL) 25² superfluous, GL 25 may still be relied upon insofar as it authorizes some transactions that remain prohibited under other sanctions programs. According to Secretary of the Treasury Scott Bessent, termination of the SySR “will help provide the opportunity to reconnect Syria’s economy with global commerce and rebuild the country’s infrastructure.” However, it is important to note that OFAC may continue to pursue pending or future investigations and enforcement actions related to apparent violations of the SySR that occurred prior to termination of that program on July 1, 2025.

Second, the EO instructs Secretary of State Marco Rubio — who already waived secondary sanctions imposed by Congress in the Caesar Syria Civilian Protection Act of 2019 (Caesar Act) on May 23, 2025 for a 180-day period — to consider continued suspension of those secondary sanctions. The Caesar Act requires the U.S. executive branch to sanction non-U.S. individuals and companies that engage in certain types of business — including reconstruction — with Syria, its government, and individually sanctioned entities in Syria. Although waivers may not exceed 180 days, they are renewable. Congress will have to pass new legislation to formally terminate the Caesar Act’s secondary sanctions.

Third, the EO permits the relaxation of export controls on dual-use goods regulated by the U.S. Department of Commerce’s Export Administration Regulations (EAR). Currently, nearly all items subject to the EAR, except for certain food and medicine, require a license to be sent to Syria. The Department of Commerce is now permitted to ease these restrictions, although EAR restrictions still remain. For restrictions under the EAR to be lifted, the Department of Commerce will have to amend the EAR. In addition, restrictions on exports of defense articles controlled under the International Traffic in Arms Regulations, including with respect to the arms embargo on Syria, remain in effect.

Fourth, the EO also lifts restrictions — effective 20 days after the Secretary of State issues a requisite waiver determination to Congress — on the provision of U.S. government foreign assistance, credit, credit guarantees, and other financial assistance to Syria, as well as the extension of loans, credit, and other financial services by U.S. financial institutions to Syria (provided no involved party remains on the SDN List). On May 23, 2025, the Department of the Treasury’s Financial Crimes Enforcement Network issued exceptive relief to permit U.S. financial institutions to maintain correspondent accounts for the Commercial Bank of Syria.

Fifth, the EO instructs the Secretary of State to reconsider various restrictive designations, including Syria’s designation as a State Sponsor of Terrorism, HTS’ designation as a Foreign Terrorist Organization, and HTS’ and interim President al-Sharaa’s designations as Specially Designated Global Terrorists. These designations, although distinct, generally serve to identify and sanction entities involved in terrorism, as well as stigmatize and diplomatically and financially isolate them. Reconsideration of designations, and delisting, would further open the door for economic relations and development. Indeed, Secretary Rubio has already moved to lift the FTO designation from HTS. In addition, the Secretary of State is tasked with exploring avenues at the United Nations to provide additional sanctions relief.

Conclusion

The administration in constructing the EO and eliminating or waiving other Syrian sanctions goes to great lengths to provide interim President al-Sharaa and his government with the boost they need to reconstruct Syria and jumpstart its economy. However, if the new Syrian government does not live up to the expectations of the United States, the Trump administration can reimpose certain or all of these restrictions. Indeed, according to a fact sheet issued alongside the EO, the U.S. government intends to monitor Syria’s progress on key U.S. priorities, including “taking concrete steps toward normalizing ties with Israel, addressing foreign terrorists, deporting Palestinian terrorists and banning Palestinian terrorist groups, helping the United States prevent a resurgence of ISIS, and assuming responsibility for ISIS detention centers in northeast Syria.” The Trump administration has also previously underscored the importance of ensuring the security of Syria’s religious and ethnic minorities. U.S. persons resuming business or other activities involving Syria should be aware of the potential for sanctions to be reimposed; include contractual or other protections that will enable termination of those renewed activities if the situation changes; and maintain vigilance in order to comply with continued export control restrictions and with new OFAC designations under Executive Order 13894, as amended by the Executive Order of June 30, 2025.

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© Arnold & Porter Kaye Scholer LLP 2025 All Rights Reserved. This Advisory is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.