With Caesar sanctions off, now Syria can rebuild

Steven Sahiounie, journalist and political commentator

On December 10, the U.S. House of Representatives approved a massive defense bill known as the National Defense Authorization Act (NDAA), authorizing a record $901 billion in annual military spending. The bill also includes the repeal of the Caesar Syria Civilian Protection Act of 2019, signaling a major shift in U.S. policy toward Syria and generating widespread anticipation in Syria’s political and economic circles.

The repeal of the Caesar Act — one of the harshest measures imposed on Syrians for many years—has sparked significant optimism in Syria, as the law had long constrained economic recovery and international engagement. The repeal has far-reaching implications for Syria’s future reconstruction, investment climate, and reintegration into the global economy.

A Long-Awaited Legislative Shift

The Caesar Act was among the most consequential measures imposed by Washington against Syria’s former regime and its allies, particularly due to its secondary sanctions, which allowed the United States to penalize foreign individuals and institutions engaging with Syrian entities already under U.S. sanctions.

In May, during a meeting in Saudi Arabia with Syria’s interim president, Ahmad al-Sharaa, U.S. President Donald Trump announced his intention to lift all sanctions on Syria. While his administration temporarily suspended some restrictions, the permanent repeal of the Caesar Act required congressional legislation.

The NDAA is expected to receive final approval before the end of the year following a vote in the U.S. Senate, after which President Trump is expected to sign it into law. In parallel, another bill was submitted to Congress in November 2025 proposing the repeal of the Syria Accountability and Lebanese Sovereignty Restoration Act of 2003 and the Syrian Human Rights Act of 2012, which are expected to be debated early next year.

Repealing the Caesar Act and the Path to Reconstruction

The House of Representatives recently advanced a decisive vote to repeal the Caesar Act, a pivotal and long-awaited step to remove a significant barrier to reviving Syria’s economy. Experts say the repeal lays the foundation for economic recovery and opens the door to a new phase of reconstruction.

What Is the Caesar Act?

The Caesar Syria Civilian Protection Act of 2019 authorizes sanctions against any government or private entity that provides support to Syria’s former regime or its affiliated entities, or contributes to Syria’s reconstruction.

The law empowers the U.S. president to impose sanctions on any company or individual investing in Syria’s energy, aviation, construction, or engineering sectors, as well as those providing loans to the former regime (Article 102).

It also opened the door to targeting the Central Bank of Syria, subject to a U.S. Treasury report determining whether there were “reasonable grounds” to believe the bank was primarily involved in money laundering (Article 101). In December 2020, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) formally designated the Syrian Central Bank, despite it already being effectively restricted under Executive Order 13582.

Impact of Sanctions on the Syrian Economy

The Caesar Act were the strictest sanctions Syria had ever faced. The law prevented Syrian banks from dealing with international financial institutions, disrupted imports and exports, and imposed sweeping restrictions on economic activity related to Syria.

Experts and activists have long stressed that ordinary Syrians suffered the most, as sanctions restricted access to essential goods and deterred major international companies from entering the Syrian market. Lifting the law represents a critical turning point and provides the economic foundation for reconstruction and the return of global firms.

Immediate Market Reactions and Economic Expectations

Syrian officials and economic experts described the House’s approval of the repeal as a major milestone on the road to economic recovery and reintegration into the global financial system.

Economists noted that the impact of repealing the Caesar Act is expected to become tangible in the medium term, affecting income levels, exchange rates, trade, and overall living conditions.

Following the announcement, the Syrian pound appreciated by approximately 6 percent against the U.S. dollar, reflecting optimism in currency markets. Experts anticipate a parallel decline in the prices of essential goods, which could stimulate commercial activity.

Psychology Versus Structural Change

Economic researchers have emphasized that in the short term, psychological factors are likely to outweigh actual structural economic improvements. Some described the repeal as a political signal rather than an immediate economic transformation.

The reduced fear associated with sanctions may prompt individuals and institutions to ease their demand for foreign currency, contributing to short-term exchange rate gains. However, this optimism is inherently temporary, as it is not yet supported by increased production or improved market fundamentals.

Reconstruction and International Investment

Repealing the Caesar Act could open the door to large-scale investments from Gulf countries, the United States, Europe, and China. Global oil and gas companies and major Gulf institutions had previously hesitated to enter Syria due to sanctions but may now return decisively.

Energy experts point to expected progress in rebuilding infrastructure and expanding oil and gas exploration in both the Eastern Mediterranean and inland Syrian regions once restrictions are lifted.

Economic experts predict an increase in imports that would boost competition, create supply surpluses, and lower prices for some consumer goods. With expected growth in exports, financial transactions, and employment opportunities.

Banking Sector and Global Financial Reintegration

Lifting sanctions would allow Syrian financial institutions to reconnect with international banking systems such as SWIFT, restoring cross-border transactions, and international payment companies such as Visa could resume operations in Syria.

Economic and banking experts emphasize that reconnecting Syrian banks to global financial networks would facilitate imports, exports, and capital flows. However, Syrian banks must modernize internal systems, improve transparency, and comply with international anti–money laundering and counterterrorism financing standards.

Experts agreed that one of the most significant benefits of repealing the Caesar Act is the reduction of insurance, compliance, and legal costs that had discouraged companies from operating in Syria. This shift could encourage medium-sized projects in renewable energy, services, and light infrastructure.

Medium-Term Outlook and Job Creation

The effects of lifting sanctions would likely materialize over one to two years, through improved purchasing power, exchange rate stability, and lower inflation. Reconstruction projects and new investments could generate thousands of jobs in construction, industry, and services.

The repeal of the Caesar Act is a watershed moment in Syria’s economic history, laying the foundation for comprehensive reconstruction and the rebuilding of state institutions and society.

International Political Support

U.S. President Donald Trump worked closely with Saudi Crown Prince Mohammed bin Salman and Turkish President Recep Tayyip Erdoğan to push Congress toward repealing the sanctions, framing the move as both an economic and humanitarian necessity.

Lifting the Caesar Act represents a beacon of hope for Syrians, promising renewed investment, job creation, higher wages, and an end to decades of economic isolation. While challenges remain, the repeal marks the beginning of a gradual, but potentially transformative reintegration of Syria into regional and global economic systems.

Steven Sahiounie is a two-time award-winning journalist.