Following the fall of the Assad regime in December 2024, Syria’s transition faces a critical inflection point. While international sanctions were initially designed to constrain a repressive regime, they now constitute a major obstacle to the country’s recovery and long-term stability. This policy paper interrogates the structural effects of sanctions—both formal and informal—on Syria’s economy, institutions, and prospects for peacebuilding.

The paper outlines how unilateral sanctions by the US, EU, and UK, compounded by the indirect implications of UN Security Council Resolutions and the pervasive “chilling effect” of overcompliance, have entrenched a state of economic paralysis. Beyond restricting access to financial systems, trade, and investment, sanctions have accelerated institutional decay, weakened governance, and deepened Syria’s dependence on informal networks and militia-based economies. Even sectors not explicitly sanctioned have been sidelined by risk-averse international actors.

Despite the issuance of humanitarian exemptions and licenses, these measures remain inadequate. They fail to account for the broader requirements of recovery, including infrastructure rehabilitation, essential services, and livelihoods. The paper argues that the continuation of Assad-era sanctions—absent a recalibration—risks reproducing the very war economy dynamics they sought to dismantle, while derailing efforts to rebuild a coherent and legitimate state.

A more pragmatic approach is urgently needed. The paper calls for a phased and context-sensitive sanctions strategy that balances the political imperatives of accountability with the practical necessities of stabilization. This includes: expanding exemptions to support early recovery and local development; reducing overcompliance through clearer guidance and financial risk-sharing mechanisms; and safeguarding civil society and local governance actors as essential pillars of resilience and reform.

Finally, the paper stresses the mutual responsibilities of both international actors and Syrian transitional authorities. While sanctions relief must be met with tangible reforms in governance, financial transparency, and regulatory compliance, international stakeholders must move beyond punitive logic and engage constructively with Syria’s recovery trajectory. Without such recalibration, the transition risks becoming hollow, prolonging societal fragmentation and delaying durable peace.