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LONDON: Ahead of the Syrian Arab Republic’s national dialogue held in Damascus on Feb. 25, the EU made an important gesture of goodwill by agreeing to lift a portion of the sanctions imposed on the now-deposed Bashar Assad regime.

However, the full and sustained lifting of all sanctions on Syria is yet to be assured, as Western leaders are currently not convinced that an inclusive administration — willing to implement much-needed reforms — is on the cards.

The EU announced on Feb. 24 that it has suspended restrictions on Syria’s oil, gas, electricity, and transport sectors with immediate effect, while also easing its ban on banking ties to allow transactions for humanitarian aid, reconstruction, energy, and transport.

In addition, five financial entities — the Industrial Bank, Popular Credit Bank, Saving Bank, Agricultural Cooperative Bank, and Syrian Arab Airlines — have been removed from the asset freeze list, allowing funds to reach Syria’s central bank.

The decision came a day before Syria’s interim government launched its national dialogue, where President Ahmad Al-Sharaa, who was appointed in December to lead until March 1, pledged to form an inclusive transitional government.

Al-Sharaa and his armed group, Hayat Tahrir Al-Sham, which overthrew the Assad regime on Dec. 8 following a lightning offensive from its stronghold in Idlib, touted the forum as a crucial step toward democracy and reconstruction.

Although critics said preparations for the event had been rushed, it attracted around 600 delegates and marked an important step toward drafting a new constitution, the reform of institutions, and a road map for the economy.

For these aims to succeed, however, rights groups and experts have called for sanctions on Syria, especially US restrictions, to be lifted as a vital prerequisite for economic, social, and political recovery.

“Lifting sanctions is crucial at this moment to promote a stable and peaceful political transition in Syria,” Nanar Hawach, senior Syria analyst at the International Crisis Group, told Arab News.

Ibrahim Al-Assil, a senior fellow at the Middle East Institute, likewise stressed that “rebuilding Syria’s middle class is essential for any meaningful political transition” — a goal that cannot be achieved without first lifting sanctions.

“Economic devastation limits Syrians’ ability to engage in the political transition,” Al-Assil told Arab News.

Emphasizing that sanctions have “severely damaged” Syria’s economy and “crippled society’s ability to function,” Al-Assil warned that “prolonging sanctions risks undermining the country’s fragile transition and could doom efforts to establish a stable and inclusive future.

“Syrians need support, not continued economic restrictions, to move forward,” he added.

Likewise, the New York-based monitor Human Rights Watch has warned that Western sanctions are “hindering reconstruction efforts and exacerbating the suffering of millions of Syrians struggling to access critical rights, including to electricity and an adequate standard of living.”

In a statement in February, the monitor said more than half of Syrians lacked access to nutritious food, while at least 16.5 million were in need of humanitarian aid.

“It’s very difficult to say how bad the situation is,” Karam Shaar, a senior fellow at the New Lines Institute for Strategy and Policy, told Arab News.

“Without either lifting sanctions or being provided with an injection of funding from abroad, as Qatar has promised, the situation could implode at any moment.”

Concerns over continued US sanctions recently led Qatar to delay pledged funds to support Syria’s public sector, which had been promised a 400 percent pay raise.

The EU has likewise been cautious, saying in its Feb. 24 statement that the continuation of sanctions relief hinges on the interim government’s performance. The bloc warned that sanctions could be reinstated if Syria’s new authorities do not implement reforms.

“If everything does not go right, then we are also ready to put the sanctions back,” said the EU’s top diplomat, Kaja Kallas. She said that “any kind of government needs to be all-inclusive and take into account all the different groups that are in Syria.”

And while a technocratic government was not established as expected on March 1, Al-Sharaa announced on March 2 the creation of a seven-member committee to draft a temporary constitution.

“Syria’s new leader faces the formidable challenge of navigating the expectations of both liberal and ultraconservative factions,” Syrian-Canadian analyst Camille Otrakji told Arab News.

“While Al-Sharaa’s personal leanings align with the conservatives, he cannot afford to dismiss the strong recommendations from his Western and moderate Arab interlocutors.

“Thus far, however, his response has been largely symbolic — appointing Christian representatives to committees and inviting minority groups to dialogue sessions,” he added, stressing that “symbolic gestures will not suffice.”

Media reports suggest the government’s formation could be delayed until the last week of March or beyond, potentially postponing decisions to ease more sanctions.

Aid agencies and economists warn that further delays in lifting sanctions could do more harm than good, particularly during this critical transition.

“Rather than take a ‘wait and see’ attitude toward lifting the sanctions, which may squander today’s long-awaited opportunity for a new Syria, Western governments should lift the sanctions now, conditioned on Syria continuing in a rights-respecting direction,” Kenneth Roth, former executive director of Human Rights Watch, told Arab News.

“While there has been some easing of sanctions, particularly for humanitarian aid, the continuing sanctions are a big impediment to economic progress.”

Roth, author of “Righting Wrongs,” which opens with a chapter on Syria’s Idlib, cautioned that “while we celebrate the demise of the brutal Assad regime, Syria remains in a precarious position.”

Echoing Roth’s concerns, Syrian economic adviser Humam Aljazaeri also said the restrictions should be lifted sooner rather than later.

“We understand the position of the international community to attach the lifting of sanctions to political progress — especially to cross towards representative government — but at some point, it might just be too late,” he told Arab News.

Hawach of the International Crisis Group warned that without easing economic and trade restrictions, the country risks renewed fighting.

“After more than a decade of conflict, the new leadership faces daunting challenges in rebuilding institutions and stabilizing the economy,” he said. “If Syria has any chance of succeeding, it needs sanctions relief, otherwise, the country risks falling into renewed cycles of violence and conflict.”

Noting that while “European efforts to ease sanctions are a step in the right direction,” Al-Assil of the Middle East Institute said “US sanctions remain the most significant obstacle.

“Without their removal, other governments and financial institutions will hesitate to engage with Syria,” he said.

Syria has been under Western sanctions for more than four decades, with the most severe imposed after the Assad regime’s crackdown on anti-government protests in 2011 and later the reported use of chemical weapons against civilians.

These sanctions included broad restrictions on trade, financial transactions, and key industries, in addition to targeted asset freezes and travel bans.

The strictest sanctions are enforced by the US, banning almost all trade and financial transactions with Damascus, except for limited humanitarian aid. The Caesar Act, introduced in 2019, extended these restrictions to foreign companies doing business with the ousted regime.

After more than 13 years of civil war, some 90 percent of the population has been driven below the poverty line. The fighting damaged schools, hospitals, roads, water systems, and power grids, crippling public services and sending the economy into freefall.

Even after Assad’s 24-year rule collapsed on Dec. 8, the bulk of US, EU, and UK sanctions have remained in place, hobbling the postwar recovery.

On Jan. 6, the US Treasury issued Syria General License No. 24 (GL 24), allowing transactions with the transitional Syrian government, easing restrictions on energy-related transactions within Syria, and permitting transactions necessary for processing personal remittances.

GL 24, set to expire July 7, 2025, may be extended as the US government monitors the evolving situation in Syria, the Treasury said in a client alert on Feb. 27.

“What would be the most important, in my opinion, is re-enabling financial transactions with Syria,” said Shaar of the New Lines Institute. “At the moment, we’ve seen GL 24 from the US. We’ve seen suspensions and carve-outs from the EU.

“However, none of them is sufficient to replug the Syrian banking sector into the rest of the world. And I think this is the main vein.”

Otrakji is skeptical about any significant easing of US sanctions happening soon. “Any major rollback remains improbable in the near term,” he said.

“Historical precedent suggests that sanctions, once in place, tend to endure — those imposed on Iraq after its 1990 invasion of Kuwait remained largely intact for two decades, with only partial relief granted in 2010 and further easing in 2013.”

Despite concerns that linking sanctions relief to the interim government’s performance may be counterproductive, Western officials want to see the HTS-led administration follow through on promises of inclusive governance and protections for all Syrian ethnic and religious groups.

Many Alawites, Christians, Druze, and Kurds fear for their future amid reports of reprisals and sectarian killings since the HTS and its allies seized power.

“Al-Sharaa has been saying many inclusive, rights-respecting things,” said former Human Rights Watch chief Roth. “However, we all know that he has an extremist background and that there are many jihadists within the HTS rebel force that toppled Assad.”

HTS, which evolved from the Nusra Front, is designated a terrorist group under UN Security Council Resolution 2254, adopted in 2015. Formerly affiliated with Al-Qaeda, the group later broke ties with the extremists and Al-Sharaa has since advocated coexistence.

“The question is which way Al-Sharaa proceeds,” Roth said. “His ability to resist extremist pressure will depend significantly on whether he can deliver basic economic improvements to the long-suffering Syrian people, but the continuing sanctions, meant for Assad, not the new government, stand in the way.”

While US-led sanctions were aimed at preventing the ousted regime from committing human rights violations, they worsened conditions for ordinary Syrians. And their continuation after Assad’s fall has only deepened the crisis.

Prior to Assad’s downfall, support from his political allies — mainly Iran and Russia — provided some sustenance to the war-devastated nation. But a shift in this dynamic over the past three months may have created a vacuum, making the swift lifting of Western sanctions all the more critical.

“Before its fall, the regime was reliant on a network of traders, cronies, and political support of its allies to evade sanctions,” Syrian economic adviser Aljazaeri said, explaining that “this enabled the government to sustain some kind of economic stability, not least through the continuous flow of energy resources.

“Although this stability was increasingly compromised by growing corruption and failed economic policies, especially after 2019, it nonetheless helped sustain the status quo.”

He added: “Today, in the absence of such network and cronies, whether to sustain the flow of money or commodities, not least energy resources (and wheat), and despite the wide political support of the current administration, the economy and subsequently the social and political stability is put at growing risk of fragmentation.

“Against this backdrop, lifting sanctions, even gradually, but substantially though, is absolutely critical to achieving some balance.”

Hawach of the International Crisis Group also believes easing sanctions is vital for Syria’s recovery and helping its population overcome a decade of economic devastation.

He said: “Easing these restrictions would not only boost economic recovery and reduce the reliance on the informal economy, but also strengthen governance, providing Syrians with better living conditions and more opportunities.

“For the Syrian people, lifting sanctions would mean tangible improvements in their daily lives.”

Although analyst Otrakji agrees that lifting sanctions is crucial for Syria’s recovery, he stressed that it alone “will not be enough to reconstruct the damaged country and its society.

“The new administration in Damascus must take the first decisive move — but doing so carries significant risks,” he said, adding that any failed attempt to chart a new course will “expose deep divisions among Syrians, who remain polarized and bitter after 14 years of conflict.”