Rebuilding without Assad: Sanctions, Stakeholders, and a Fragile Future

Assad is gone, but rebuilding Syria may take some time as the international community explores what to do about sanctions and the chilling effects that will deter some major donors from investing.

The departure of Bashar al-Assad from Syria ended over a decade of authoritarian rule that plunged the country into civil war and shattered its society. Yet, while Assad’s absence may signal the beginning of a new chapter in Syria’s long history, its challenges are far from over. The ruins left in the wake of the war demand a reconstruction and recovery effort of monumental proportions—estimated at least $250 billion. Getting to the reconstruction phase, however, remains complicated by U.S. sanctions, regional rivalries, and the competing ambitions of third-party donors like the Gulf Cooperation Council (GCC) states and China.

As the United States reassesses its role in a post-Assad Syria, several questions at the heart of its policy remain unresolved. Will sanctions evolve to address the realities of reconstruction? How can Washington balance accountability for the past with the necessity of rebuilding the future? And what role will regional and global actors play in shaping Syria’s recovery?

U.S. sanctions on Syria are among the most extensive and far-reaching in modern history, evolving from targeted measures in the late 1970s to the comprehensive restrictions that define today’s policy. Initially aimed at curbing terrorism and deterring Syrian interference in Lebanon, these sanctions expanded dramatically after 2011, when Assad’s brutal crackdown on civilian protests turned into a full-scale civil war. The Caesar Syria Civilian Protection Act of 2020 epitomized this shift. By introducing secondary sanctions, it extended Washington’s reach to any foreign entities supporting Assad’s regime, particularly in sectors like energy and construction. The goal was clear: isolate Assad, choke off his regime’s economic lifelines, and signal unwavering U.S. support for accountability.

Read more from Karam Shaar’s great work on this topic.

While these measures succeeded in limiting Assad’s access to global financial networks, they also deepened Syria’s economic collapse. Inflation soared, infrastructure crumbled, and millions of Syrians became dependent on humanitarian aid. With Assad gone, the U.S. must now grapple with the unintended consequences of these sanctions and the role they will play in shaping Syria’s future.

The departure of Assad creates a rare opportunity to recalibrate U.S. policy. Many sanctions remain tied to the Assad regime and its enablers, but their continued application risks obstructing reconstruction efforts and alienating Syria’s new leadership. Syrian organizations that long championed sanctions against Assad have now begun lobbying the U.S. government to lift them now that he is gone. Why? Rebuilding Syria will require an estimated $250 billion, and the country cannot undertake this task alone. International investment, regional collaboration, and sustained humanitarian aid are essential. Yet, sanctions remain a barrier. U.S. policymakers face a dilemma: maintaining sanctions to preserve leverage risks prolonging Syria’s instability, but lifting them without safeguards could enable corruption and entrench malign actors in the reconstruction process. A phased approach—linking sanctions relief to measurable reforms like governance improvements and human rights protections—is likely to be the path forward. This allows the U.S. to balance accountability for the new government with the longer-term imperative for recovery.

In a significant development, the U.S. Treasury has issued General License 24, a new temporary exemption allowing specific transactions with Syrian governing institutions, particularly in the energy sector, telecommunications, and personal remittances. This six-month license is designed to ensure that U.S. sanctions do not impede essential services and humanitarian efforts, marking a distinct shift in the U.S. approach. These changes are still tethered to the need for accountability, but this specific measure reflects a recognition that Syria’s reconstruction requires a more diverse set of international donors. Key donors, which the U.S. is likely to encourage to participate in reconstruction—like GCC countries, the EU, and others—are unlikely to engage unless the chilling effect of sanctions is reduced or removed. The new U.S. general license creates a more nuanced policy framework, allowing for specific, limited engagement with Syria’s new leadership while maintaining leverage over key political and governance reforms. General License 24, while temporary, offers a glimpse into potential flexibility in U.S. sanctions policy providing a bridge between maintaining pressure and facilitating Syria’s recovery.

Syria’s reconstruction will not occur in a geopolitical vacuum, and other states are also likely to pursue opportunities in the new Syrian economy. The GCC states and China, with their strategic interests and economic resources, are poised to play particularly outsized roles in shaping Syria’s recovery.

For the GCC, Syria’s reconstruction represents both a strategic opportunity. Over the years, GCC countries have alternated between supporting Syrian opposition groups and engaging diplomatically with Assad. Now, reconstruction may be a means for them to assert influence, counterbalance Iran, and showcase their leadership in the region. Gulf leaders are particularly eager to dilute Tehran’s entrenched role in Syria by exploring investment in infrastructure, energy, and technology projects that align with their broader economic diversification agendas. However, U.S. sanctions complicate any such ambition. The Caesar Act’s secondary sanctions create legal and financial risks for Gulf companies, deterring many from committing to large-scale projects. Even where exemptions exist, overcompliance remains a persistent fear, forcing GCC states to navigate a delicate balance between asserting regional leadership and maintaining strong ties with their Western allies.

Meanwhile, China sees Syria’s reconstruction as a long-term opportunity to build its regional economic footprint and foster trust with the new government. This role is constrained by U.S. sanctions. China has strong relationships with key regional players—Turkey, Iran, and Saudi Arabia—which positions it to be an important player in rebuilding Syria. China’s mediation in the Saudi-Iran rapprochement in 2023 shows its ability to manage competing parties in a manner which could be beneficial for its own interests in backing reconstruction efforts. Syria already joined the Belt and Road Initiative (BRI) during the Assad regime, and it is unlikely that the new government will sever these ties. Unlike Iran and Russia, whose engagement has been primarily military, China’s focus in Syria is more on long-term economic cooperation and development.

However, U.S. sanctions, particularly the Caesar Act, make it difficult for China to engage fully in reconstruction without risking secondary sanctions. If China can navigate these restrictions, it could still play a role in Syria’s rebuilding, but its involvement will likely be measured and depend on how the situation evolves with the new Syrian government and the broader geopolitical dynamics. The U.S. is no doubt aware of the role its sanctions play in limiting the range of actors who can immediately jump into Syria’s economy.

Who should engage in reconstruction in the near term?

Entities that can operate within the constraints of existing sanctions and have the capability to ensure transparency and accountability should be empowered and enabled to begin rebuilding. Collaborative initiatives under UN auspices are essential to creating a framework that reduces the risks of corruption and sanctions violations, ensuring that reconstruction efforts are both effective and compliant with international norms.

Humanitarian aid, healthcare, and education are also critical areas of focus for early recovery since they provide immediate relief to Syria’s population and help stabilize the situation on the ground, while avoiding the legal and political challenges that could arise from larger-scale infrastructure projects.

Additionally, empowering Syria’s neighbors—Jordan, Iraq, Lebanon, and Turkey—to take a more active role in the reconstruction process is crucial. These countries have a direct stake in Syria’s stability and can help facilitate regional cooperation over the long term. By creating a regional framework for reconstruction, responsibilities and risks can be shared more equitably, fostering greater collaboration, and reduce the burden on any one nation or actor. This approach not only helps address immediate needs but also lays the groundwork for long-term peace and stability in the region.

Finally, the Trump administration’s approach to Syria remains unclear. It is likely that they will not seek active involvement in Syria’s transition, except to ensure that Syria does not become a launching pad for national and regional security threats. This means that the U.S. approach to Syria will remain heavily focused on security concerns. The administration may maintain some form of sanctions to ensure that Syria’s new authorities evolve in a way that mitigates the more hardline elements of groups like HTS (and others). However, the GCC countries are likely to increase diplomatic pressure on the U.S. to lift these sanctions. If the GCC moves to invest in Syria, China and other international actors will likely follow suit.