Lebanon is once again caught between a rock and a hard place as the US adds more painful measures to penalize any country or individuals who knowingly conduct financial activities that benefit the Syrian regime.
Better known as Caesar Syria Civilian Protection Act, this law which was signed by US President Donald Trump, aims to tighten the economic and financial sanctions against any country and companies that have direct business ties with the Syrian government.
Lebanon, which has long joint borders with Syria, has diplomatic ties with Damascus but the business activities between the two countries dramatically diminished due to the closure of borders in the past few months.
Lebanon buys electricity from Syria but there is no other form of significant direct business links between the two governments.
However, Lebanese industrialists, farmers and merchants see Syria as a vital route to ship locally made goods to Iraq and Gulf states.
In addition, a number of Lebanese investors opened factories and companies in Syria before the outbreak of the civil war in the country.
The US say that it adopted this law, that will become effective in June 17, after a Syrian government defector released thousands of photos and documents that proves the torture of prisoners and activists by the regime of President Bashar Assad.
The interesting part of this law is that it tries to target individuals allegedly responsible for financially supporting the Syrian regime, Russia or Iran in military activities.
According to this bill, the US will apply sanctions against any foreign person who knowingly provides significant financial, material, or technological support to, or knowingly engages in a significant transaction with the Syrian government (including any entity owned or controlled by the Syrian government) or a senior political figure of the Syrian government.
It also applies to a foreign person that is a military contractor, mercenary, or a paramilitary force knowingly operating in a military capacity inside Syria for or on behalf of the Syrian government, the Government of the Russian Federation, or the Government of Iran; or a foreign person subject to sanctions pursuant to the International Emergency Economic Powers Act.
The new act will also compel the Lebanese government to tighten measures to prevent the smuggling of fuel oil and wheat to Syria through the illegal crossing points since Washington strongly believes that Assad’s regime benefits from this smuggling to boost its revenues that have drastically dropped as a result of US sanctions.
Paul Morcos, attorney of law and legal consultant, told The Daily Star that Lebanon is obliged to abide by the US law.
“Lebanon has to comply with this law or suffer more consequences,” he added.
Morcos explained that this law is part of economic sanctions applied by the U.S. administration to tighten the noose on the Syrian regime and all parties that deal with Damascus.
“There were existing sanctions against Syria and the new law is nothing new. This law aims to enhance these sanctions against persons engaged in certain activities related to assisting the Syrian government through business relations,” he noted.
A number of Lebanese banks were opening subsidiaries in Syria before the start of the war in this country.
Most of these banks are now not conducting normal operations in Syria and have drastically reduced the operations in light of the crisis there.
Lebanese banks will definitely refrain from conducting any direct or indirect transactions with the Syrian central bank or with the Syrian government to avoid U.S. sanctions.
Washington says Caesar Act is certain to send a clear message to the Assad regime’s political and economic backers in Lebanon, but some analysts say the effects of its provisions may be less forceful.
While it is likely to dissuade businesses from deepening their relationship with Assad’s sphere, Lebanese firms and political actors that already do business with the regime are unlikely to turn their backs on their connections in Syria at this stage.
Morcos argues that the new US act targets substantial contracts with the Syrian government, noting that any Lebanese or foreign firm that conducts business with Damascus will no longer be able to do business with Washington.
He stressed that Caesar Act will surely restrict any Lebanese contracting company to sign contracts with the Syrian government as part of efforts to rebuild the war-torn country.
Habib Zoghbi, an economist and president of Harvard Business school graduates in Lebanon, said that US will only target the big companies that conduct substantial amount of business with Syria.
“I don’t think the US will bother itself with small businesses by Lebanese merchants who ship their goods through Syria as long as these revenues do not end [up in] the hands of the Syrian government,” Zoghbi said.
He added that based on this law, Lebanon will no longer be able to buy electricity from Syria.
“Lebanon’s energy minister will be penalized by the US if he signs a new contract with Syria to buy electricity,” Zoghbi said.
Louis Hobeika, an economist and professor of business and finance at NDU, also said that the US may overlook small business activities between Lebanese merchants and Syrian firms.
(Osama Habib- The Daily Star)
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