Enab Baladi – Wasim al-Adawi

Syria has recently taken important steps toward reintegrating its financial institutions into the international system, most notably meetings in Washington held by Syria’s Minister of Finance, Mohammed Yosr Bernieh, and Central Bank Governor Abdul Qader Hasriyeh with officials from the International Monetary Fund, the World Bank, the US Department of the Treasury, the Federal Reserve, JPMorgan Chase, and many bodies affiliated with the Fund and the Bank.

The discussions focused on updating fiscal and tax policies, strengthening governance and institutional credibility, and ensuring a transparent, investor-friendly environment after years of sanctions and financial isolation.

They also examined mechanisms for phased connectivity with the global financial system via SWIFT and regional Arab platforms such as Buna, to pilot safe transfers with Syria before a full opening.

UN and US officials stressed during the Washington meetings the importance of implementing compliance and governance standards to demonstrate to international partners Syria’s seriousness in adhering to global norms, thereby enabling Syrian banks to restore correspondent relationships and gradually open US dollar accounts.

This financial opening suggests the possibility of a gradual return to ties with global financial institutions, especially after the easing of US sanctions and White House statements signaling the intention to repeal the Caesar Act in the future.

Even so, experts note that progress still depends on upgrading digital and financial infrastructure and enabling banks to conduct safe and transparent transfers.

Governance and rebuilding trust

According to talks disclosed by the US–Syrian Business Council, which neither Bernieh nor Hasriyeh publicized, senior executives at JPMorgan Chase discussed with the Syrian side the path of financial reform and plans to reintegrate Syrian financial institutions into the international banking system, update fiscal policies, rebuild institutional credibility, and enhance transparency in the banking and insurance sectors to attract foreign investment. The talks also covered reviewing and updating tax frameworks in line with international standards.

Syrian financial management and bank auditing expert Dr. Ali Mohammad views the move as a positive step toward stronger governance, even if it has not yet reached full implementation. He considers that having a clear regulatory framework, such as Central Bank Decision 489 of 2009 on governance, provides a solid foundation for forming boards of directors and internal oversight and risk committees in banks, insurance companies, and financial institutions in general.

Dr. Mohammad told Enab Baladi that boosting transparency and publishing annual governance reports will gradually improve Syrian institutions’ ability to attract international partners and allow investors to gauge the seriousness of compliance with global financial and administrative standards.

Decision 489 of 2009 serves as the governance manual for Syrian conventional and Islamic banks, laying out standards and principles for sound governance. Key provisions include:

• Defining the powers of the board of directors, qualifying its members, and requiring committees such as nominations and remuneration, alongside procedures to ensure governance is applied.
• Setting the organizational structure for governance, including boards and committees, with clear lines of authority.
• Requiring that board members have appropriate qualifications and the capacity to make decisions that protect the bank.
• Emphasizing the board’s role in applying governance principles.
• Allowing private banks to reduce the minimum number of annual board meetings to four, subject to Central Bank approval.
• Establishing a primary reference for membership criteria and other governance aspects in Syrian banks.

Compliance and combating money laundering and terrorist financing

Meetings with IMF and World Bank officials also covered strengthening compliance standards in Syrian financial institutions and banks for AML and CTF obligations and ensuring Syria’s full adherence to commitments to international financial bodies. This is an essential condition for rebuilding international banking relationships.

Dr. Mohammad said the participation of a high-level Syrian delegation reflects to some extent the government’s desire to rebuild confidence among foreign correspondent banks. Syrian financial institutions, he added, continue to apply AML and CTF decisions, but still need to upgrade electronic systems and train staff on the latest protocols.

Executive instructions for Law 28 of 2001 set out obligations for licensed banks in Syria to meet core compliance standards, most notably:

• Building provisions for nonperforming loans with ratios that vary according to collateral type such as real estate, securities, or vehicles.
• Applying international accounting standards in all transactions.
• Complying with instructions issued by the Central Bank of Syria and the Anti-Money Laundering and Counter-Terrorist Financing Authority.
• Adopting strict integrity and transparency policies, including gift acceptance and disclosure policies aligned with the highest international standards.
• Using up-to-date technology in domestic and cross-border operations.

International transfers, SWIFT, and regional platforms

Since US and European sanctions began to ease early this year, serious discussion has begun about bringing Syria back to the SWIFT network after more than a decade of disconnection. Efforts have focused on testing phased linkages with global banks while relying on regional platforms such as Buna to conduct clearing and settlement in Gulf and Arab currencies as a transitional stage before a full reopening.

According to Dr. Mohammad, this gradualism allows Syrian banks to test internal controls, demonstrate adherence to international and regional standards, and practice real risk management before resuming direct US dollar dealings with global correspondent banks.

He believes using regional platforms will give Syrian banks hands-on experience before a full opening. This transitional phase is necessary to convince international partners that Syria can execute financial transfers safely and transparently.

Sanctions and opening to the US economy

In recent months, the US Treasury announced the easing of most sanctions regulations on Syria while keeping some individual restrictions. This created the possibility of the Central Bank of Syria opening an account at the US Federal Reserve, contingent on meeting stringent security, technical, and accounting benchmarks.

Allowing the Syrian Central Bank to apply for a Federal Reserve account reflects Washington’s desire to reintegrate Syria gradually into the international financial system and restore confidence among investors and correspondent banks while maintaining oversight to ensure full compliance.

Dr. Ali Mohammad affirmed that lifting sanctions is important but not sufficient. It must be accompanied by strong governance and compliance guarantees, including upgraded electronic systems, transaction monitoring, and staff training on international standards.

Linking the Central Bank to the Federal Reserve would be a transformational step that restores part of Syria’s credit standing, he said, but it will not produce immediate capital inflows. Time and patience are required. Improvements in the investment climate and the opening of international accounts will be gradual and could take up to two years before international transfers become routine and stable.

Following a recent meeting in Washington between US Chamber of Commerce President and CEO Suzanne Clark and Minister Mohammed Yosr Bernieh, the Chamber’s Executive Vice President John Murphy sent a letter to the US Senate and House calling for the full and permanent repeal of the Caesar Syria Civilian Protection Act, arguing that after the fall of the Assad regime and the formation of Syria’s new government the law no longer serves its purpose.

Investment and restoring international banking ties

The Syrian meetings in Washington also addressed stimulating foreign direct investment, especially in critical sectors such as energy, infrastructure, agriculture, and finance, to accelerate domestic recovery. They discussed providing legislative and legal guarantees for investors to secure a stable and safe environment.

The meeting with JPMorgan Chase was exploratory rather than a direct financial agreement. Dr. Mohammad noted that investment banks evaluate risk and the quality of the investment environment before committing funds. He expects the next phase of recovery and development to be gradual, beginning with financing small and medium projects before scaling up to larger ones to offset infrastructure losses and strengthen productive capacity.

Syria is proceeding on a measured path toward financial openness, he said, prioritizing governance, compliance, and the development of payment and transfer systems before a full reopening to global correspondent banks.

Dr. Ali Mohammad concluded that confidence-building is the most important phase and will determine the pace of opening. Syria has a rare opportunity to rebuild its international financial standing if it commits rigorously to transparency, governance, and compliance.