US must renew sanction enforcement on Syria’s Assad

Assad is reportedly bombing hospitals again. He understands there will be no American airstrikes if he resists the temptation to use chemical weapons. Yet the U.S. can hold Assad accountable for his atrocities by exploiting his economic vulnerability, thereby raising the price Iran must pay to keep Assad in power. With Tehran’s currency imploding and protesters rebuilding momentum, the clerical regime may find that bankrolling Damascus is no longer affordable.

The U.S. and EU imposed tough sanctions on Syria after the war began in 2011, yet enforcement wavered while Assad learned to exploit an array of loopholes. Now is the time to put Damascus back in a financial chokehold by going after three critical targets: Assad’s new oligarchs, his supply of oil, and his access to the global financial system.

{mosads}With old associates restrained by sanctions, Assad has found new men to oversee conglomerates that help finance the cash-strapped regime; two of them stand out as key targets for the Treasury Department.

The first is Samer Foz, a little-known grain merchant who built a sprawling corporate empire during the war. In March, Foz made headlines by purchasing a Saudi prince’s stake in the Damascus Four Seasons Hotel. This puts Foz in the same arena as Syria’s Ministry of Tourism, whose minister is under EU sanctions. Foz reportedly also has a business connection with the sanctioned oligarch Muhammad Hamsho, as well as Damascus Cham Holding, a government entity.

Another obvious target is Husam Katerji, a member of parliament and a reported militia boss from Aleppo, who also rose swiftly during the war — the banner on his Facebook page shows him shaking hands with Assad. Last year, a Reuters investigation documented Katerji’s role transporting wheat from ISIS-held territory to areas under Assad’s control, an enterprise that could only possible with ISIS consent. In March, Syrian opposition media reported that Katerji orchestrates the sale and transport of oil from areas under Syrian Kurdish control to those held by Assad.

The Syrian Kurds have played an indispensable role in the war on ISIS, yet some Kurdish targets should be on Treasury’s radar because they appear to be selling substantial amounts of oil to Assad. Given how important the Kurds remain to our efforts in Syria, the White House and Pentagon should raise the issue directly with Syrian Kurdish leaders, whom the U.S. should encourage to sell their oil to other customers, such as the Kurds in Iraq.

Iranian oil tankers should also come into the crosshairs. They provide Assad with substantial amounts of oil that he can either resell at a profit to desperate Syrians or use to fuel military operations. Last week, the website Tanker Trackers published data showing that a tanker, the “Sea Shark,” made five round trips from Iran to Syria over the past year, transporting a total of 4.7 million barrels of Iranian crude. The ship’s movements are visible because international law requires the use of transponders that broadcast a vessel’s location — although the “Sea Shark,” Tanker Trackers reports, illegally turned off its transponders while approaching the Syrian coastline.

The U.S. and EU have experience in disrupting this kind of illicit trade by sanctioning the ships, front companies, ports, and shipping executives responsible. However, it is essential to update and enforce these sanctions, since Tehran and Damascus have shown that they will constantly seek new ways to obfuscate and evade them. The U.S. could also lean on Egypt — or have the Saudis lean on Egypt — to prevent Syria-bound tankers from passing through the Suez Canal.

Banks should be another prime target of the economic campaign against Assad. In the early days of the war, the U.S. and EU targeted all of Syria’s state-owned banks, yet sanctioning a bank is not the same as shutting it off from the outside world. For example, the Syrian Lebanese Commercial Bank (SLCB) continues to operate openly in neighboring Lebanon. In February, a senior Treasury official went to Lebanon to press the central bank to shut down SLCB, but it has not done so. The U.S. should now issue an ultimatum: Either Beirut shuts down the bank or faces punitive measures.

Finally, the U.S. should ask the Society for Worldwide Interbank Financial Telecommunication (SWIFT) to expel all state sponsors of terrorism — Syria included — from their network, which connects more than 11,000 banks across the globe. When the U.S. and EU compelled SWIFT to disconnect Iran in 2012, the damage was extensive. According to a study by my colleagues Mark Dubowitz and Annie Fixler, Iran’s expulsion from SWIFT “applied greater pressure on the Iranian leadership than anything in the previous decades.”

No financial punishment can deliver true justice for Assad. What he deserves is to face prosecution. Yet by depriving Assad of funding and fuel, the U.S. and EU can limit his ability to carry out new atrocities, while adding to the pressure on Assad’s patrons in Tehran, whose own citizens are also demanding justice.

David Adesnik is the director of research at the Foundation for Defense of Democracies.