On May 23, 2025, the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) issued General License No. 25 under the Syrian Sanctions Regulations, marking a measured but far-reaching reconfiguration of U.S. economic policy toward Syria. Acting in close coordination with the Department of State’s issuance of a national security waiver under Section 7425 of the Caesar Syria Civilian Protection Act of 2019 (“Caesar Act”), the new license authorizes a broad spectrum of previously prohibited activities, including new investment in Syrian organizations and the export of services to the Syrian population. These measures follow substantial changes in Syria’s political leadership and the emergence of a governing authority that U.S. officials have deemed sufficiently distinct from the prior regime to warrant a fundamental reassessment of sanctions policy. While not a wholesale lifting of sanctions, General License No. 25 represents the most substantial relaxation of U.S. measures targeting Syria in more than a decade.

The scope of the license is intentionally broad, reflecting the Treasury Department’s intent to support Syria’s economic stabilization while safeguarding against the misuse of U.S. financial channels and resources. Pursuant to its terms, U.S. persons are now authorized to engage in transactions that would otherwise be prohibited under 31 C.F.R. Part 542, provided such transactions do not involve persons whose property and interests in property remain blocked under other authorities. Specifically, the license excludes from its scope any dealings with individuals or entities sanctioned under counterterrorism programs, counter-narcotics provisions, and designations related to the proliferation of weapons of mass destruction. OFAC has expressly excluded any transaction that would directly or indirectly benefit parties affiliated with Iran’s Islamic Revolutionary Guard Corps, Lebanese Hizballah, or other entities known to support terrorist activity or systemic human rights violations. In this respect, General License No. 25 preserves the core prohibitions of the Syrian sanctions framework while recalibrating its application to reflect changed political circumstances on the ground.

General License No. 25 further authorizes U.S. persons to engage in transactions involving the new Government of Syria, marking a significant departure from the previous categorical prohibition on dealings with the Syrian state. This authorization extends to both the central government and sub-national authorities, so long as those entities are not designated under other sanctions authorities outside the scope of the Syrian Sanctions Regulations. The license thus enables lawful engagement with the country’s emerging political institutions while preserving restrictions on residual elements of the former regime that remain subject to blocking measures. This distinction allows U.S. persons to participate in reconstruction and governance-related efforts without conferring legitimacy or material benefit on parties that continue to pose a risk to U.S. foreign policy and national security interests.

Separately, the annex to General License No. 25 identifies specific individuals and entities whose property and interests in property remain blocked under the Syrian Sanctions Regulations but with whom transactions are now explicitly authorized under the terms of the license. These persons remain on OFAC’s Specially Designated Nationals and Blocked Persons (“SDN”) List but are carved out for the limited purpose of facilitating otherwise prohibited activity as authorized by the general license. Accordingly, U.S. companies and financial institutions must implement rigorous compliance protocols to distinguish between permissibly engaged parties and those that remain off-limits. Significantly, the license does not relieve U.S. persons of their broader obligations under OFAC’s regulations, including prohibitions on facilitation, evasion, or the use of indirect arrangements to obscure dealings with restricted parties.

The Department of State’s Caesar Act waiver complements OFAC’s license by removing certain secondary sanctions risks that might otherwise deter foreign firms from reengaging with the Syrian market. The waiver effectively suspends the application of sanctions that would have been mandatory under the Caesar Act for foreign persons engaging in significant transactions involving the reconstruction of Syria’s energy sector or infrastructure. Importantly, this waiver is not indefinite in duration and is conditioned on ongoing assessments of the Syrian government’s adherence to specific human rights, governance, and counterterrorism commitments. The Department of State has stated unequivocally that the waiver may be revoked at any time should the new governing authorities deviate from these core expectations. Thus, the relaxation of sanctions does not represent an unconditional endorsement of Syria’s political transformation but rather an attempt to create policy space for constructive engagement without undermining residual leverage.

The broader policy rationale behind these developments appears to be rooted in a pragmatic reassessment of Syria’s transitional environment. The new license is intended to facilitate the delivery of essential services, attract foreign direct investment, and restore basic economic functionality across a country that has been systematically hollowed out by war, corruption, and economic isolation. In practical terms, this could mean renewed opportunities in sectors such as energy, telecommunications, agriculture, transportation, and potable water infrastructure—each of which remains critical to Syria’s long-term recovery. Nonetheless, U.S. officials have emphasized that the license is not a blanket authorization for all economic activity and that transactions must continue to be assessed in light of the residual risks associated with dealing in high-risk jurisdictions.

For stakeholders contemplating reentry into the Syrian market, General License No. 25 provides a framework that enables engagement without the need for specific OFAC licensing, but that engagement must be structured around a robust compliance apparatus. This includes continuous screening of counterparties, careful vetting of financial intermediaries, and ongoing monitoring of developments that could affect the permissibility of proposed transactions. Entities operating in sectors historically dominated by Assad-aligned interests will need to exercise heightened caution, particularly where there is residual overlap between public sector authorities and designated persons. Moreover, because the license does not override export controls administered by the U.S. Department of Commerce or other federal agencies, firms must still consider the applicability of other regulatory frameworks, including the Export Administration Regulations (“EAR”) and end-use or end-user-based restrictions.