Canada should reduce Syria sanctions to align with U.S. and Britain, experts say

Globe and Mail

15-05-2025

Canada should scale back its sanctions on Syria now that the United States is promising to scrap them entirely and other major allies are reducing them, international trade experts say.
John Boscariol, head of McCarthy Tétrault's international trade and investment law group, said Canada could end up among the countries with the toughest sanctions still in place on Syria if the United States eliminates its sanctions, as President Donald Trump said earlier this week he would do.
'When our close allies like the U.K. and the U.S. are relaxing sanctions against a target country, it absolutely makes sense for Canada to be going down that same path,' he said.
International trade lawyer Lawrence Herman agreed. 'Canada should co-ordinate with its closest allies on Syrian sanctions, so that we are in step with the international consensus to help rebuild Syria and the Syrian economy.'
Foreign Affairs Minister Anita Anand declined comment Wednesday on Syria, noting as she exited a cabinet meeting that it was her first full day in a new portfolio.
Syria is trying to rebuild after former dictator Bashar al-Assad fled the war-torn country last November and was granted asylum in Russia.
Mr. Trump announced this week that he would order the lifting of sanctions on Syria at the behest of Saudi Arabia's crown prince, a major U.S. policy shift ahead of his Wednesday meeting with Syria's new President, Ahmed al-Sharaa, a former militant who severed ties with al-Qaeda in 2016.
The decision is expected to have an almost immediate effect on the ability of humanitarian groups to bring money and supplies into the country, although a full removal of sanctions will require action by the U.S. Congress and the revival of dormant financial links with Syria.
Mr. Trump's pledge was announced despite deep Israeli suspicion of Mr. Sharaa's administration. Israeli officials have continued to describe Mr. Sharaa as a jihadist.
Britain said in April that it would support efforts to rebuild Syria's financial system by removing sanctions to encourage investments in financial services, energy production and other sectors. A notice posted online by the British finance ministry said the Syrian Interior Ministry, Defence Ministry and General Intelligence Directorate were among 12 entities no longer subject to asset freezes.
Michael Nesbitt, a University of Calgary law professor who previously worked in the federal government's sanctions division, said the change in government in Syria should give rise to a re-evaluation of sanctions.
'We had sanctions against Syria, including because there was a grave threat to international peace and security with the ongoing conflict there,' he said. 'If Canada determines that there's been a change in that status, then it should be sitting down to think about whether to change the sanctions regime.'
Ottawa in March announced that it would temporarily ease existing sanctions on Syria for a period of six months 'to support democratization, stabilization, and the delivery of aid to and within Syria during this period of transition.'
Mr. Boscariol said the general permit issued by Canada allows certain transactions, 'if they were humanitarian or related to the stabilization of Syria, to proceed.'
But otherwise, he said, Canada maintains a 'fairly aggressive financial services ban in place, which essentially prohibits providing financial services to, or for the benefit of, any person in Syria,' he said.
Mr. Boscariol said one challenge that the United States and Canada will face is that the organization Mr. Sharaa led, Hayat Tahrir al-Sham, is listed as a terrorist entity by both Washington and Ottawa.
Aid groups said the mere sign that the White House intends to alter course will be enough to produce some change for the country, pointing to the rapid rise in value for the Syrian pound.
As one example, those working in Syria have often encountered issues related to 'over-compliance,' in which fear of consequences has kept institutions from engaging even in work that is technically legal.
Companies and banks have balked at measures such as financing humanitarian shipments, 'because the sanctions are so complicated and the costs of getting it wrong are so high,' said Joel Veldkamp, director for public advocacy at Christian Solidarity International, a religious human-rights organization.
'Since the Treasury Department will presumably no longer be pursuing these cases, that problem should get much better relatively quickly.'
Mr. Trump, too, can act unilaterally to cancel a national emergency declared by George W. Bush in 2004, which was used to back a series of sanctions.
Congress, however, will need to act to overturn the 2019 Caesar Act, which imposed broad sanctions on the Assad regime and those doing business with key sectors of the country.
As change happens, humanitarian groups and people sending home remittance money are likely to be the first to test new pathways into the country, said Joude Badra, a financial technology executive who has written on Syrian economic reconstruction.
'Syrians abroad, some friendly governments, development finance institutions and risk-taking business people will lead the way,' he said.
But the broader sweep of foreign investment needed in the country is likely to take time, given the need for companies to assess the feasibility of any new projects and gauge comfort with the investment environment in a country, much of whose leadership has been drawn from the ranks of Islamic militant groups.
Bankers will need to make their own decisions.
'Syrian banks and their correspondent banks across the world need to re-engage and activate old dormant or frozen accounts,' Mr. Badra said. 'This part may be faster for some Middle Eastern banks that are shareholders in Syrian banks or are servicing humanitarian transfers already.'
What it means is 'it will likely take a bit of time before we see actual money flowing in,' he said.
Still, the shift has raised hopes among groups who have worked in Syria, and witnessed the toll taken by sanctions.
'This announcement marks a potentially transformative moment for millions of Syrians who have endured more than 13 years of economic hardship, conflict and displacement,' Mathieu Rouquette, Mercy Corps country director for Syria, said in a statement.
'With fewer restrictions on financial transactions and imports, we can more effectively support Syrians to restore livelihoods, revive small businesses and strengthen local markets,' he said.
'This moment offers a real opportunity to shift from a heavy reliance on aid toward long-term resilience.'
Removing obstacles to the movement of money and goods is, of course, only one element of what is needed in a country that has been deeply impoverished.
'It's a cash issue. There's really no cash to be able to rebuild the infrastructure in Syria,' said Mufaddal Hamadeh, a Chicago hematologist and oncologist who is president of the Syrian American Medical Society.
But, he said, change in U.S. policy should open the way for other countries to help. 'Countries like Qatar and the Gulf countries will be able to provide free assistance to Syria without fear of conflicting with the U.S. sanctions,' he said.
It is also likely to bolster Syria's nascent government, by giving it new legitimacy at home.
'I have no reason but to feel elated, with an optimism that is sky-high,' he said. 'And that is how Syrian people are feeling today.'
With a report from Reuters