US Sanctions on Syrian Regime and its Impact on Lebanon

The Caesar Act, a new package of sanctions against the Syrian regime and those who assist it and its businesses, came into force on June 17. Within hours, it had targeted Asma al-Assad, the wife of the president, and dozens of other individuals and groups.

As a firm supporter of the Syrian regime, the Iranian government will likely also be targeted by the act, which will be in force for a period of at least five years. 

What is the Caesar Act and Who Will it Target?

The Caesar Act, or the Caesar Syria Civilian Protection Act, places sanctions on the entire Syrian regime for war crimes committed against the Syrian people. The act includes financial, banking, and economic sanctions aimed at reconstruction, energy production, infrastructure, and maintenance of military vehicles.

According to the official website of the United States Congress, the act authorizes the monitoring of the Central Bank of Syria for money laundering, while also allowing the US Secretary of the Treasury, within 90 days of its entry into force, to determine whether there is reasonable cause to believe that the Syrian Central Bank is a financial institution of major interest regarding money laundering activities.

If this is the case, it is up to the Secretary of the Treasury, in coordination with the relevant federal bodies, to impose the punitive measures stipulated in Section 5318 of US law.

Under the act, the US president has the right to impose sanctions on the following: Any foreign person providing financial or technical support to the Syrian regime; those that enter into contracts with it; the Syrian government; any official institutions or entities controlled by the Syrian government; any high-level political figure within the regime; and any foreign person contracted by the regime militarily or as a mercenary, or as a paramilitary force operating within Syria on behalf of, or to represent, the Syrian government. This also applies to the Russian and Iranian governments or any person primarily affected by US sanctions as a result of Russia and Iran's support for the Al-Asad regime, and further includes equipment related to the operation of aircraft and anyone providing construction or engineering services to the Syrian government.

Implications for Lebanon

Iran-backed Hezbollah has been involved in the war in Syria since the beginning, and still provides support to the Al-Asad regime at all military and financial levels. So will Lebanon encounter ts share of the Caesar act sanctions?

In an interview with IranWire, Dr. Tariq Shandab, an international law expert, said the law will affect any Lebanese individual who has supported the Syrian regime, whether through oil, fuel, equipment, or weapons, in connection with the Hezbollah militia.

Shandab pointed out that human rights organizations have highlighted the former foreign minister, Gebran Bassil, in addition to a number of his fellow ministers in the previous government, as individuals who supported the Syrian regime by providing it with aircraft fuel, and said their names appear on the sanctions list covered under the act. 

From an economic perspective, says Professor Jassem Ajaqah,  a former consultant to the minister of the economy, the legal text is open to interpretation, and the sanctions could be limited to individuals who deal directly with the Syrian government, or it could affect anyone who deals with the Syrian state in any way.

In an interview with IranWire, Ajaqah said that the extent of the repercussions on the Lebanese economy would be determined by how strict the United States is in its implementation and application of the law. It was clear, he said, that many Lebanese companies are invested in the Syrian market, especially within the field of reconstruction, which presents huge financial potential. So for them and so many other businesses, the situation is serious, with Ajaqah anticipating that the sanctions will put a stop to all kinds of cooperation with the Syrian government.

Lawyer and human rights activist Anwar Al-Bunni said he expected Lebanon to be the spearhead in the fight against the Syrian regime, especially as it is now the only lifeline it has. As the first round of sanctions was implemented from June 17 onward, he said, individuals with links to both the Syrian regime and Lebanon would begin to be affected and targeted. 

Al-Bunni also said that Minister Gibran Bassil and the Free Patriotic Movement he leads are still under scrutiny. In the event that the US administration proves that these individuals funded regime activities, they could be subject to sanctions. 

Al-Bunni also said that some branches of Lebanese banks in Syria have closed due to fears that they will be subject to the Caesar Act, especially since high-ranking figures from within the Syrian regime have deposited funds — money they stole from the Syrian people — into these banks in order to smuggle it abroad. If such banks continue operations in Syria, they will be subject to sanctions, and if this happens, the businesses of these figures will be cut off from most parts of the world, leading to their bankruptcy.

How will the Political Class Cope With the Repercussions of the Caesar Act? 

"There is no other solution except for the Lebanese to stand in solidarity together to wisely confront the repercussions of the Caesar Act on Lebanon,” member of parliament and Future Parliamentary Bloc member Walid Al-Barini told IranWire when asked about how the already-exhausted Lebanese economy would deal with the repercussions of the Caesar Act.

While some Lebanese domestic news websites have published photographic evidence of Hezbollah allegedly smuggling a car full of dollars across legitimate borders into Syria, Al-Barini said Hezbollah should show control in the current environment, demonstrating collective awareness and putting the interests of Lebanon first. He also indicated there were many senior Lebanese political figures who had voiced surprise that Bashar Al-Assad still remains in power in Syria.

The economic situation in Lebanon continues to deteriorate since the dollar reached its highest levels on June 15, with the black market exchange rate reaching nearly 7,000 Lebanese pounds (LBP) to the dollar, the highest exchange rate since the establishment of the state of Lebanon. On the same day, Lebanon's cities witnessed confrontations between protesters, including people from the Amal Movement and Hezbollah, and security forces, resulting in the complete closure of most main roads. The protesters' demands focused on finding a solution to the hefty rise in the dollar, while Amal and Hezbollah supporters demanding the dismissal of the governor of Banque du Liban, Riad Salameh, who is backed by the Future Movement and 14 March forces that oppose the Iranian project, were limited. 

During an OTV television interview, the US Ambassador to Lebanon Dorothy Shea announced that US sanctions would have an impact on Hezbollah and its supporters, noting that Riad Salameh had the confidence of the international financial community. She also pointed out that the United States has worked closely with Riad Salameh over the years and that it would be wrong to demonize any person or institution, or to make them a scapegoat for Lebanon's economic collapse, which she said was the result of decades of corruption and poor financial management.