Middle East Intelligence Bulletin
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May 2004 

American Sanctions on Syria: A Diplomatic Masterstroke?
by Gary C. Gambill


After months of internal deliberations, on May 11 the Bush administration issued an executive order imposing a range of new economic sanctions on Syria. Western media reports have almost invariably portrayed the White House action as a largely symbolic gesture that is likely to be ineffective in changing the behavior of Syrian President Bashar Assad. However, the reality is more complex. However, while the new sanctions regime is limited in scope, it marks a definitive departure in American policy from constructive engagement to deterrence and, in light of the historical path dependency of US decision-making in the Middle East, carries a very credible threat of further sanctions. Moreover, shifts in American policy toward Syria historically have a significant impact on Syria's relations with Europe. Indeed, the Bush administration's Syria initiative has already begun to strain its relations with the world at large.


Until March 2003, American policy toward Syria closely adhered to the State Department's doctrine of constructive engagement, a diplomatic principle inspired by the use of American military and economic aid to facilitate Egypt's defection from the Soviet bloc and acceptance of peace with Israel in the 1970s. Parallel American efforts to woo Syria with economic aid after the 1973 Yom Kippur War never bore fruit (Syrian President Hafez Assad not only refused to negotiate with Israel, but actively tried to sabotage Egypt's move toward peace). However, the logic (or illogic) of constructive engagement - that offering sizable and tangible carrots in return for good behavior is more effective than sanctioning bad behavior - remained imbedded in official American thinking about Syria.

Over the next three decades, constructive engagement morphed into appeasement (constructive engagement's ugly cousin). Damascus was given two of the most handsome carrots ever delivered by the United States - tacit recognition of its lucrative control over Lebanon and freedom to illegally import Iraqi oil at cut-rate prices, earning the regime over $1 billion annually (American officials objected shortly after Bush came to office, but soon stopped complaining about the illicit trade, which at any rate could have been brought to a halt by air strikes on the Iraqi side of the Syrian-Iraqi oil pipeline). But these carrots were not given in return for good behavior. They were given in spite of its refusal to compromise with Israel, end its support for terrorist groups, or halt its strategic realignment with Iraq in the waning years of Saddam Hussein's reign.

While American appeasement of Syria began in the mid-1980s, European appeasement came later - in 1990, Britain hadn't yet restored diplomatic relations with Syria and the French navy was on the verge of a military showdown with Damascus. Although European appeasement evolved much further (Syrian President Bashar Assad has paid state visits to London, Berlin and Paris since he assumed power four years ago), the two have been mutually reinforcing. It is not a coincidence that an abortive reduction in American appeasement of Syria (e.g. US officials began explicitly referring to the Syrian presence in Lebanon by name) following the failure of the Clinton-Assad summit in March 2000 coincided (not coincidentally) with a brief hardening of French policy toward Damascus (both countries returned to constructive engagement following the late Hafez Assad's death in June 2000).

The Bush administration's abandonment of constructive engagement has been a gradual process that took off during the first week of the US-led invasion of Iraq in March 2003, when US officials publicly denounced Syria's provision of military equipment to Saddam Hussein. American officials knew about the arms transfers long before the start of the war - for over a year, quiet American diplomacy and promises of post-war economic payoffs had failed to persuade Assad to end his covert rearmament of the Iraqis. Once the fighting began, however, it became apparent that Syrian-supplied weapons (most notably, Kornet anti-tank missiles) were costing American lives. Moreover, Assad increased his support for the Iraqi war effort by allowing thousands of "volunteers" to cross into Iraq. Syria's leading government-appointed religious official, Ahmad Kaftaro, issued a fatwa calling on Muslims to carry out suicide operations against "the belligerent American, British and Zionist invaders."[1]

Although the impact of Syrian intervention in Iraq during and after the war on US military casualties is difficult to quantify, it has been substantial and continuing - at least a dozen American soldiers have died since March trying to stop terrorist infiltration from Syria. Above all else, it is Syria's involvement in Iraq that has driven nails in the coffin of American constructive engagement - its logic disappeared years ago, but the respectability of this doctrine endured until American soldiers began paying the price for it.

Significantly, the flurry of bellicose American complaints about Syrian weapons shipments to Saddam Hussein during the US-led invasion did not explicitly accuse the Syrian government of knowingly permitting arms to flow across its border. Defense Secretary Donald Rumsfeld warned fiery press briefing that the United States "consider[s] such trafficking as hostile acts and will hold the Syrian government accountable," but demurred when asked whether the shipments were state-sponsored, replying curtly that "they control their border." A few days later, at the peak of the crisis, Secretary of State Colin Powell warned Damascus not to continue "direct support . . . for the dying regime of Saddam Hussein,"[2] but this was followed by media statements from unnamed (presumably State Department) officials calling Powell's admonition "a pre-emptive warning" and denying that credible evidence of Syrian governmental involvement existed.[3] Over the next year, terrorist infiltration into Iraq from Syria was frequently condemned as "unacceptable," but never as intentional - hopes of a Syrian turnabout did not die easily in Washington and US officials wanted to give Assad a face-saving exit.

If the young Syrian dictator had backed down in Iraq last April, all of his transgressions would likely have been forgiven, but he did not. Outrage toward Damascus boiled over and an American consensus reemerged in support of more comprehensive demands, including an end to Syria's sponsorship of terrorist groups such as Hamas, Islamic Jihad, and Hezbollah (and, to a lesser extent, its occupation of Lebanon and WMD development), and more punitive US reprisals. In signing the Syria Accountability and Lebanese Sovereignty Restoration Act (SALSA) late last year, President Bush signaled definitively that his administration had shifted gears.

The Syrians may not have gotten the message, but the Europeans sure did. Syria's association agreement with the European Union (EU), which was all but signed, abruptly hit a snag - Britain, Germany, and the Netherlands withdrew their support for the text, insisting that it must contain a Syrian pledge not to develop WMD. Even French President Jacques Chirac was unwilling to support Syria's refusal to include the WMD clause.

The reaction of France to escalating American pressure on Syria over the past year is revealing. Although France had been a stalwart supporter of Syrian hegemony in Lebanon since the mid-1990s, Chirac was outraged by Assad's refusal to support the economic recovery policies of his close friend, Lebanese Prime Minister Rafiq Hariri, following the November 2002 Paris-II donor conference. Significantly, on the eve of Powell's stormy May 2003 visit to Damascus, French Foreign Minister Dominique De Villepin shocked Assad by publicly calling for a Syrian withdrawal from Lebanon. Seeking to capitalize on Syrian isolation, French officials pressed Damascus to "give the Lebanese more breathing space with respect to their political decisions," notes Randa Takieddine, the Paris bureau chief of the London-based Arabic daily Al-Hayat, but "Syria disregarded all French messages."[4]

The Sanctions

Once Bush committed himself to implementing SALSA, a major debate erupted within the administration over which sanctions to apply. The law calls for the president to ban dual use exports and choose two of six a la carte sanctions: banning all exports (other than food and medicine) to Syria; prohibiting US businesses from investing or operating in Syria; restricting the freedom of movement of Syrian diplomats in the United States; prohibiting Syrian airlines from entering American airspace; downgrading diplomatic contacts with Syria; or freezing Syrian assets in the country.

In the end, the administration chose a sanctions regime that exceeded these minimal requirements. Specifically, President Bush's executive order does the following:

  1. Prohibits the export of military and dual-use items to Syria, except as needed for national security purposes (a redundant provision, as such exports are already banned because Syria is on the State Department's list of state terrorism sponsors).

  2. Prohibits the export and re-export to Syria of most goods, excluding food and medicine. Bush is expected to exercise partial waivers of this ban, allowing the Department of Commerce to license exports of certain goods, such as telecom equipment (so as to promote the "free flow of information" in Syria).

  3. Prohibits commercial air services between the United States and Syria by Syria-owned and controlled aircraft. Aircraft owned or chartered by the Syrian government would still be allowed to enter American airspace for official business.

  4. Freezes assets and property of individuals "who are determined by the Secretary of the Treasury, in consultation with the Secretary of State, to be or to have been directing or otherwise significantly contributing to" Syria's sponsorship of terrorist organizations, development of WMD, occupation of Lebanon, or efforts to undermine stability in Iraq; and prohibits US citizens from engaging in financial transactions with them.[5]

  5. Requires that US financial institutions (banks, mutual funds, etc.) severe correspondent accounts with the state-owned Commercial Bank of Syria (CBS) and its Beirut-based subsidiary, the Syrian Lebanese Commercial Bank.

Thus, Bush's executive order applied the mandatory provision of SALSA (#1 in the above list), two optional SALSA sanctions (#2 and #3), and a weakened version of a third SALSA sanction (#4), as well as a fifth provision mandated by the USA Patriot Act (#5). While this package exceeded SALSA's requirements, the two ala carte sanctions selected by Bush were arguably not the strongest of the six - US exports to Syria amounted to only $214 million last year,[6] while Syria's national airline does not even fly to the United States.

According to US officials, two of the three other possible sanctions - downgrading US-Syrian diplomatic ties and imposing travel restrictions on Syrian diplomats in the United States - were rejected because the administration did not want to diminish official contacts with Damascus, but European influence was also a factor - EU countries want Syria pressured, but not isolated.

Bush's executive order did not ban American investments in Syria, which are estimated at around $600 million and are mainly concentrated in its oil and gas sector. However, the export ban functions as a de facto restriction on US investment in Syria. American companies that currently do business in Syria, such as ConocoPhillips and Chevron, will be unable to transport their own equipment into the country (unless the President introduces specific waivers allowing this) , substantially increasing their operating costs. Indeed, some officials say that the new sanctions regime is designed to ease American businesses out of Syria gradually. "We're giving them a chance to cut back on their investments and get out. They are put on notice," one administration official explained.[7] By paving the way for an eventual investment ban, the export ban adds credibility to Bush's warning that "additional sanctions may be imposed should the Syrian government fail to adopt a more constructive approach to relations with its neighbors, weapons of mass destruction, and terrorism."[8]

However, the most striking and powerful aspect of Bush's executive order is the language he used to justify it. In a letter to Congress that accompanied his May 11 announcement, Bush declared that "Syria's support for terrorism, its military presence in Lebanon, its pursuit of weapons of mass destruction, and its actions to undermine US and international efforts with respect to the stabilization and reconstruction of Iraq" are "sufficiently grave to constitute a threat to the national security, foreign policy, and economy of the United States."[9] This was the first time that the White House or any cabinet-level Bush administration official has publicly accused the Syrians of intentionally undermining the United States in Iraq (as opposed to being "unhelpful" or "out of step" with reality).

The administration's new parameters for describing Syrian behavior were also evident in a statement released by the Treasury Department in conjunction with the executive order. The statement said that CBS had been used as "a conduit for the laundering of proceeds generated from the illicit sale of Iraqi oil," and that "numerous transactions that may be indicative of terrorist financing and money laundering have been transferred through CBS, including two accounts at CBS that reference a reputed financier for Osama bin Laden."[10] The suggestion that Syria has laundered money for al-Qaeda represents an unprecedented level of candor in discussing Syrian links to terrorism.


Within hours of Bush's announcement, Syrian Prime Minister Muhammad Naji al-Otari told reporters in Damascus that the sanctions "will not have any effect on Syria" and called on Washington to "reverse its decision and not provoke problems between the two countries."[11] However, Syrian denials appeared to mask considerable apprehension about the domestic political fallout. At the very same news conference, Otari declared that his country has "a strong, solid, and capable economy" and announced the "discovery of new gas fields."[12] This "discovery" may in fact be legitimate, but if so it would appear that the Syrians withheld the announcement until the Bush administration unveiled its sanctions. Shortly thereafter, Assad sought to give public confidence another boost by increasing public sector salaries.

However, if the Syrians were hoping for European pressure to taper off after Bush's executive order, they were sorely mistaken. On May 23, Assad was forced to postpone the trial of seven Kurdish political activists until late June after diplomats from the EU, French and Dutch embassies arrived at the courthouse to observe the proceedings (they were turned away by police).[13] A few days later, the regime panicked and seized the passport of a Syrian human rights activist scheduled to attend a May 26 parliamentary hearing in Denmark on the plight of Syrian Kurds. Also on May 26, EU member states agreed after five months of deliberation to insert an anti-WMD clause in the association agreement with Syria. Although the clause appears to be less explicit than the one proposed by Britain, Germany and the Netherlands (according to one report, it obliges Syria to "move towards meeting its full existing obligations" under international disarmament and non-proliferation treaties to which it is already a signatory), it essentially imposes the same restrictions.[14]

The reaction of Syrian officials to the EU decision bore an uncanny resemblance to their anti-American rhetoric, with newly-appointed Defense Minister Hassan Turkmani proclaiming that "Syria does not accept foreign dictates."[15] Notwithstanding such bombastic declarations in Damascus, EU officials predict that the Syrian government will accept the clause in order to avoid appearing internationally isolated in the wake of the American sanctions.[16] In the face of this unexpected European pressure, Syrian officials abruptly stopped dismissing the impact of US sanctions and began expressing concern about the economic ramifications to Western (but, significantly, not Syrian) media outlets. Economy Minister Ghassan Rifai, for instance, said on May 28 that the sanctions are "not a good sign" at a time when Syria needs to attract foreign investment and that they "will have a negative impact" on its economy.[17]

In light of continuing talk in America and Europe about a "trans-Atlantic divide" in Middle East policy, it is ironic that the strongest aspect of the new sanctions regime would seem to be the Bush administration's coordination with EU governments in drafting it. The Europeans may object in principle to unilateral American sanctions on Syria, but once the Bush administration pledged to implement SALSA they moved quickly to reinforce US pressure - had the sanctions been too tough, they might have hesitated to do so.


  [1] Agence France Presse, 27 March 2003.
  [2] Colin Powell, remarks before the American-Israel Public Affairs Committee, 30 March 2003.
  [3] Newsday (New York), 3 April 2003; The Financial Times, 1 April 2003.
  [4] Al-Hayat (London), 12 May 2004.
  [5] Executive Order Blocking Property of Certain Persons and Prohibiting the Export of Certain Goods to Syria, 11 May 2004.
  [6] Syria exported $259 million worth of goods to the US in 2003. See "Bush bans most exports to Syria, oil flow could be slowed," The Associated Press, 12 May 2004.
  [7] "US sanctions on Syria hit exports," The Jerusalem Post, 12 May 2004.
  [8] Statement by the President, 11 May 2004.
  [9] President Bush's Message to Congress On Syria Sanctions, 11 May 2004.
  [10] US Treasury Department, Treasury Designates Commercial Bank of Syria as Financial Institution of Primary Money Laundering Concern, 11 May 2004.
  [11] "President Imposes Sanctions on Syria; Nation Accused of Backing Terrorism," The Washington Post, 12 May 2004.
  [12] Al-Thawra (Damascus), 12 May 2004.
  [13] "Syrian Court Postpones trial of Kurdish political activists," Deutsche Presse-Agentur, 23 May 2004.
  [14] "EU agrees deal, plans renewed talks with Damascus," Deutsche Presse-Agentur, 26 May 2004.
  [15] "Syria says refuses dictates, WMD stance unchanged," Reuters, 30 May 2004.
  [16] "Syria says refuses dictates, WMD stance unchanged," Reuters, 30 May 2004.
  [17] "Syrian minister admits US sanctions will hurt," Agence France Presse, 29 May 2004.

2004 Middle East Intelligence Bulletin. All rights reserved.

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