The US recently issued far-reaching, immediate sanctions relief for Syria as part of a wider global push to remove sanctions on the country, according to a statement by the US Treasury Department published on Saturday. The move — which includes a waiver for the Caesar Syria Civilian Protection Act — is expected to unlock new avenues for investors after over 14 years of civil war and sanctions turned the Syrian market into a dead zone for investment and development.

EnterpriseAM Logistics sat down with Mark Nakhla (LinkedIn), Chief Research Officer of Kharon — a US-based data and technology firm that advises businesses on a range of sanctions and compliance risks — to get a sense of what this push means for businesses mulling an entry into the Syrian market, the landscape in terms of risks and benefits, and what precautions they can take to protect their commercial interests.

The tides are turning: Syria is emerging as a “frontier for investment” after suffering from a decade of sanctions, Nakhla told EnterpriseAM. The lifting of restraints over the weekend on all sectors in the country represents “a significant and monumental shift” which gives non-US entities more capacity to operate, Nakhla said, pointing also to the pause on secondary sanctions under the Caesar Act.

Widening reach: What’s new about this round of sanctions relief is how far-reaching they are. Unlike previous, narrow measures that focused on humanitarian logistics, the new measures are opening avenues for commercial activities including port operations, oil and gas, and development and manufacturing. Other sectors previously out of reach, such as ins. and logistics, are now also in the mix, Nakhla added.

Some red lines remain: Both the US and the EU have left in place some restrictions on Assad regime-sanctioned persons and entities. Businesses are still required to avoid dealings with Syrian companies in which a sanctioned entity owns 50% or more, according to US rules, and EU sanctions on 300 affiliates to the Assad regime are still in place, Nakhla said.

First-mover benefits and risks: The easing of sanctions presents investors with high-reward, first-mover benefits in various sectors, and this window is “measured in weeks and months, not years,” Nakhla told us. This means that investors need to move quickly to secure contracts in the country, but it also comes with risk when the trajectory is uncertain.

Recent port concessions are a case in point: French shipping giant CMA CGM and UAE’s DP World moved quickly to secure port concessions for the country’s top ports earlier this month. CMA CGM will invest USD 260 mn in Latakia Port as part of a 30-year concession, whereas DP World has committed USD 800 mn for Tartus port and logistics zone developments. Both agreements were finalized before the US formalized sanctions relief.

One possibility that investors should be worried about is the risk of “snapback,” where sanctions could be reimposed, Nakhla said. While the EU’s relief package earlier this year did not include snapback clauses, the volatile political context in Syria makes the trajectory for long-lasting sanctions relief uncertain for the time being. The current administration in

Another main challenge for businesses lies in navigating the residual sanctions — largely those still imposed on the deeply entrenched economic networks associated with the Assad regime. “We’re talking about a jurisdiction that’s been under control by the Assad government for almost half a century with a very robust and significant economic and patronage network,” Nakhla explained, “nothing went in, nothing went out without it touching that network for decades.”

What does that mean for investors? Businesses will need to practice an exceptionally high degree of due diligence. “Understanding and managing your customer, your customer’s customer, doing that deep dive to really separate risk from opportunities [is] very critical here,” Nakhla said.

Rapid changes occurring on the risk landscape — whether compliance or political risks — also mean investors need to embrace a “live risk radar,” Nakhla added. This means that businesses should be on the lookout for day-to-day data on the latest “sanctions risks, security conditions, and political signals” to enable them to make quick and well-informed decisions.

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