Washington is considering the removal of key economic sanctions against Syria, a decision that could have significant implications not only for Syria’s devastated economy but also for security dynamics across the Middle East. The Caesar Act—enacted in 2020 and robustly enforced through 2022—was originally designed to isolate the Assad regime, impose costs for human rights abuses, and restrict Iranian and Russian entrenchment. These broad sanctions severely limited Syria’s access to global markets and stifled internal reconstruction, impacting both regime officials and ordinary citizens.
As the Syrian conflict enters its second decade, economic stagnation and humanitarian suffering have intensified. United Nations and independent humanitarian organizations estimate that around 90% of Syrians now live below the poverty line, with infrastructure, agriculture, and healthcare in disarray. International efforts to deliver aid often stumble over legal and financial barriers erected by the Caesar Act, which punishes not only direct engagement with the Assad regime but also many forms of third-party trade and reconstruction aid. The Assad government, underpinned by direct Iranian and Russian support, remains deeply entrenched, leveraging domestic security services and international patronage while facing a society hollowed by conflict, corruption, and displacement.
Policymakers in the United States are divided over the next steps. Some contend that sanctions have largely succeeded in isolating the regime and denying Iran strategic depth, particularly along the sensitive borders with Israel and Jordan. Others argue that unyielding sanctions deliver diminishing returns and disproportionately harm civilians rather than regime elites or their Iranian backers. Ongoing debate within the US administration, as well as among European partners and regional stakeholders including Israel and Jordan, reflects this tension.
If Washington moves to ease or lift significant sanctions, experts project that the initial result will be an influx of foreign direct investment, especially from Gulf states and European firms historically involved in Syrian infrastructure and energy projects. Access to foreign currency, the reopening of crucial trade routes, and restoration of cross-border commerce could rapidly accelerate the pace of economic stabilization. Many Syrian entrepreneurs, humanitarian organizations, and private investors—hamstrung for years by international financial restrictions—would once again be able to operate, potentially alleviating the humanitarian crisis that has driven millions of Syrians into hardship or exile.
For Israel, the calculus is complex. Syria remains a principal battleground between Iran’s Islamic Revolutionary Guard Corps (IRGC) and its proxy Hezbollah, and the Israeli Defense Forces have regularly launched pre-emptive strikes on Iranian-linked targets in Syrian territory to disrupt weapons transfers and encroachment near the Golan Heights. While economic stability in Syria could reduce incentives for refugees and criminal activity along Israel’s northern border, Israeli officials are cautious that any unmonitored investment or financial windfall for the regime could bolster Iranian and Hezbollah influence. Israeli Prime Minister Benjamin Netanyahu and Minister of Defense Israel Katz have repeatedly stressed that legitimate international engagement with Damascus must be strictly conditioned on curbing Iran’s military presence in Syria and dismantling the logistical networks facilitating arms transfers to terrorist organizations.
Known as a key node in the Iranian axis of resistance, Syria serves as a corridor for the movement of IRGC personnel, weapons, and funding to Hezbollah in Lebanon as well as to other Iranian-backed militias in Iraq and the Golan Heights. Hamas, responsible for the October 7, 2023, massacre—where terrorists murdered, raped, and kidnapped hundreds of Israeli civilians—remains ideologically and practically aligned with these efforts. Israel’s response to this atrocity underscored the state’s determination to assert its right to self-defense under international law and to counter Iranian-sponsored terrorism on all fronts.
Diplomatic overtures from Arab states, cautious backing from selective European capitals, and Washington’s review of sanctions policy coincide with broader regional realignments. The Abraham Accords, normalizing relations between Israel and several Sunni Gulf countries, have shifted the context of alliances, particularly with shared concerns over the destabilizing influence of Iran and its proxies. A stable, more economically open Syria could indirectly foster conditions for incremental dialogue—though not full normalization—between Syria and Israel, perhaps on technical issues such as water management, narcotics control, or border security. Any movement on this front would likely be phased, closely monitored, and dependent on verifiable Syrian steps to limit Tehran’s role on its soil.
US officials stress that any removal or relaxation of sanctions will proceed only in coordination with allies. Israel, Jordan, the UAE, and European Union members remain engaged in extensive consultations to ensure that humanitarian gains in Syria are balanced against the continued need for regional security and the imperative to contain the IRGC’s ambitions. Congressional leaders in Washington and policy experts caution that ramping down sanctions without rigorous oversight could reinforce the position of the Assad regime and inadvertently empower Iran, undermining more than a decade of joint US-Israeli efforts to contain Tehran’s regional ambitions.
The question of accountability remains central. Human rights groups, opposition figures, and Western diplomats agree that untrammeled investment into regime-controlled Syria risks perpetuating patterns of corruption and state repression. Proposals on the table include meticulously targeted relief—focused on critical infrastructure, food security, and medical supplies—paired with robust transparency measures, enforcement of international humanitarian law, and strict exclusion of entities linked to sanctioned officials or Iran’s military apparatus.
Russia’s role also looms large. Moscow, a principal backer of Assad, would likely interpret any easing of US sanctions as validation of its interventionist strategy and seek to capitalize by deepening its own trade, military, and energy links. Western officials emphasize that any policy shift will adhere to United Nations Security Council resolutions calling explicitly for a political transition and the withdrawal of all non-Syrian forces—notably the IRGC and other Iranian militants—as prerequisites for full normalization.
The potential reopening of Syria to global commerce must be paired with intensified vigilance against terrorist financing, weapons proliferation, and malign external influence. The US, Israel, and allied states are expected to continue close intelligence cooperation and joint operations to preempt threats not only from IRGC elements but also from remnants of ISIS, al-Qaeda affiliates, and other extremist groups that have thrived in Syria’s security vacuum.
While lifting or relaxing the Caesar Act could mark a turning point for Syria’s economy and offer unprecedented humanitarian relief, the path forward is fraught with risks and will demand persistent, unified monitoring by the US, Israel, and their partners. The ultimate aim remains clear: to deprive Iran and its proxies of strategic depth, buttress Israel’s security and regional stability, and lay the groundwork for a future Syria that can participate constructively in the international community and, potentially, explore avenues of peaceful coexistence—even incremental commerce—with Israel. Only by fusing diplomatic resolve with rigorous security safeguards can the West help chart a sustainable course out of chaos for Syria and enhance collective security in the greater Middle East.
